What changed in this filing

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Item 9A. Controls and Procedures

2023-02-15 compared with 2022-02-03 · 851 added, 827 removed, 2029 unchanged (45% of the section changed)

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Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of December 31, 2021.

the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of December 31, 2022.

Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that:

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Our management is responsible for establishing and maintaining adequate internal control over our financial reporting.

Internal control over financial

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

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

Our internal control over financial reporting includes those policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

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• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

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The effectiveness of our internal control over financial reporting as of December 31, 2022, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their attestation report, which is included herein.

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OTHER INFORMATION

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Not Applicable.

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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The response to this item is incorporated by reference from the discussion responsive thereto in the section entitled “ Proposal 2 - Ratification of the Selection of our Independent Registered Public Accounting Firm ” contained in the proxy statement for our 2023 annual meeting of stockholders.

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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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Not applicable.

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EXHIBIT INDEX

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Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on September 1, 2015.

10.2 Credit Agreement, dated as of January 28, 2020, among Biogen Inc., Bank of America, N.A., as administrative agent, swing ling lender and the L/C issuer, and the other lenders party thereto.

10.2 Credit Agreement, dated as of January 28, 2020, among Biogen Inc., Bank of America, N.A., as administrative agent, swing line lender and the L/C issuer, and the other lenders party thereto.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on February 3, 2020.

10.3+ Amendment to Credit Agreement, dated as of February 7, 2023, by and among Biogen Inc., Bank of America, N.A., as administrative agent, swing line lender and the L&C issuer, and the other lenders party thereto.

10.4† Second Amended and Restated Collaboration Agreement between Biogen Idec Inc.

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Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

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10.11* Form of cash-settled performance unit award agreement under the Biogen Inc.

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Filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

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10.12* Form of performance stock units award agreement (cash-settled) under the Biogen Inc.

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Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.

10.20+ Form of nonqualified stock option award agreement under Biogen Inc.

2017 Omnibus Equity Plan.

10.21* Biogen Idec Inc.

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Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.

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10.37* Form of indemnification agreement for directors and executive officers.

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Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on December 19, 2016.

10.39* Letter regarding employment arrangement of Michel Vounatsos dated May 2, 2022.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on May 3, 2022.

10.40* Employment Agreement, dated November 10, 2022, by and between Biogen Inc.

and Christopher A.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on November 10, 2022.

10.41* Letter regarding employment arrangement of Michael McDonnell dated July 16, 2020.

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Filed as Exhibit 10.58 to our Annual Report on Form 10-K for the year ended December 31, 2009.

10.39* Letter regarding employment arrangement of Alfred W.

Sandrock, Jr.

dated May 7, 2013.

Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

10.40* Letter regarding employment arrangement of Alfred Sandrock dated October 19, 2015.

Filed as Exhibit 10.37 to our Annual Report on Form 10-K for the year ended December 31, 2015.

10.43* Letter regarding employment arrangement of Chirfi Guindo dated October 12, 2017.

Filed as Exhibit 10.41 to our Annual Report on Form 10-K for the year ended December 31, 2020.

10.42* Letter regarding employment arrangement of Jeffrey Capello dated November 14, 2017.

Filed as Exhibit 10.31 to our Annual Report on Form 10-K for the year ended December 31, 2017.

10.43* Separation Agreement between Biogen Inc.

and Jeffrey Capello dated July 16, 2020.

Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.

10.44 Joint Venture Agreement, dated December 6, 2011, by and between Samsung BioLogics Co., Ltd.

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Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

10.45+ Amended and Restated Collaboration Agreement, dated October 22, 2017, between Biogen MA Inc.

and Eisai Co., LTD.

10.46+ First Amendment to Amended and Restated Collaboration Agreement, dated March 13, 2022, between Biogen MA Inc.

and Eisai Co., LTD.

21+ Subsidiaries.

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++ Furnished herewith.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

/ S / M ICHEL V OUNATSOS

Michel Vounatsos

/ S / C HRISTOPHER A.

Christopher A.

Chief Executive Officer

February 15, 2023

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name Capacity Date

/ S / M ICHEL V OUNATSOS

/ S / C HRISTOPHER A.

Director and Chief Executive Officer (principal executive officer) February 15, 2023

Michel Vounatsos

Christopher A.

/ S / M ICHAEL R.

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Director February 15, 2023

/ S / N ANCY L.

Director February 3, 2022

/ S / J ESUS B.

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Director February 15, 2023

/ S / B RIAN S.

Director February 3, 2022

/ S / E RIC K.

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Director February 15, 2023

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Report of Independent Registered Public Accounting Firm (PCAOB ID 238) F-78

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Restructuring charges 131.1 — —

Total cost and expense 8,141.0 8,894.5 7,335.3

Income from operations 2,840.7 4,550.1 7,042.6

Gain on sale of building ( 503.7 ) — —

Other (income) expense, net ( 108.2 ) 1,095.5 ( 497.4 )

Total cost and expense 6,581.6 9,236.5 8,397.1

Income before income tax expense and equity in loss of investee, net of tax 3,591.8 1,745.2 5,047.5

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See accompanying notes to these consolidated financial statements.

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Total other comprehensive income (loss), net of tax ( 58.2 ) 192.3 ( 163.8 )

Comprehensive income attributable to Biogen Inc.

Comprehensive income (loss) attributable to Biogen Inc.

2,988.7 1,748.4 3,836.8

Comprehensive income (loss) attributable to noncontrolling interests, net of tax ( 85.3 ) 172.1 60.9

Comprehensive income $ 1,920.5 $ 3,897.7 $ 5,993.3

Comprehensive income (loss) $ 2,903.4 $ 1,920.5 $ 3,897.7

See accompanying notes to these consolidated financial statements.

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See accompanying notes to these consolidated financial statements.

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(Gain) loss on equity method investment ( 2.6 ) ( 34.9 ) ( 3.3 )

Gain on sale of equity interest in Samsung Bioepis ( 1,505.4 ) — —

Gain on sale of building ( 503.7 ) — —

Other 208.2 202.2 104.6

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Other changes in operating assets and liabilities, net ( 92.0 ) ( 144.5 ) ( 137.1 )

Net cash flow provided by operating activities 3,639.9 4,229.8 7,078.6

Net cash flow provided by (used in) operating activities 1,384.3 3,639.9 4,229.8

Cash flow from investing activities:

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Purchases of marketable securities ( 3,448.5 ) ( 3,808.7 ) ( 6,397.7 )

Contingent consideration paid related to Fumapharm AG acquisition — — ( 300.0 )

Acquisition of Nightstar Therapeutics plc, net of cash acquired — — ( 744.4 )

Proceeds from sale of equity interest in Samsung Bioepis 990.3 — —

Proceeds from sale of building 582.6 — —

Purchase of Sangamo Therapeutics, Inc.

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Other 24.4 12.9 ( 26.9 )

Net cash flow (used in) provided by investing activities ( 563.7 ) ( 608.6 ) 470.5

Net cash flow provided by (used in) investing activities 1,576.6 ( 563.7 ) ( 608.6 )

Cash flow from financing activities:

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Other ( 5.6 ) ( 21.1 ) 14.6

Net cash flow used in financing activities ( 2,086.2 ) ( 5,272.7 ) ( 5,860.4 )

Net cash flow provided by (used in) financing activities ( 1,747.3 ) ( 2,086.2 ) ( 5,272.7 )

Net increase (decrease) in cash and cash equivalents 1,213.6 990.0 ( 1,651.5 )

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See accompanying notes to these consolidated financial statements.

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See accompanying notes to these consolidated financial statements.

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Retirement of common stock pursuant to the 2020 Share Repurchase Program, at cost — — ( 6.0 ) — ( 231.9 ) — ( 1,568.1 ) 6.0 1,800.0 — — —

Repurchase of common stock pursuant to the December 2019 Share Repurchase Program, at cost — — — — — — — ( 16.7 ) ( 5,000.0 ) ( 5,000.0 ) — ( 5,000.0 )

Retirement of common stock pursuant to the December 2019 Share Repurchase Program, at cost — — ( 16.7 ) — ( 121.3 ) — ( 4,878.7 ) 16.7 5,000.0 — — —

Repurchase of common stock pursuant to the March 2019 Share Repurchase Program, at cost — — — — — — — ( 4.1 ) ( 1,279.1 ) ( 1,279.1 ) — ( 1,279.1 )

Retirement of common stock pursuant to the March 2019 Share Repurchase Program, at cost — — ( 4.1 ) — ( 71.0 ) — ( 1,208.1 ) 4.1 1,279.1 — — —

Issuance of common stock under stock option and stock purchase plans — — 0.2 — 54.4 — — — — 54.4 — 54.4

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See accompanying notes to these consolidated financial statements.

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Other comprehensive income (loss), net of tax — — — — — ( 163.8 ) — — — ( 163.8 ) 1.0 ( 162.8 )

Distribution to noncontrolling interest — — — — — — — — — — ( 75.0 ) ( 75.0 )

Capital contribution from noncontrolling interest — — — — — — — — — — 4.0 4.0

Repurchase of common stock pursuant to the March 2019 Share Repurchase Program, at cost — — — — — — — ( 14.7 ) ( 3,720.9 ) ( 3,720.9 ) — ( 3,720.9 )

Retirement of common stock pursuant to the March 2019 Share Repurchase Program, at cost — — ( 14.7 ) — ( 121.5 ) — ( 3,599.4 ) 14.7 3,720.9 — — —

Repurchase of common stock pursuant to the 2020 Share Repurchase Program, at cost — — — — — — — ( 1.6 ) ( 400.0 ) ( 400.0 ) — ( 400.0 )

Retirement of common stock pursuant to the 2020 Share Repurchase Program, at cost — — ( 1.6 ) — ( 60.8 ) — ( 339.2 ) 1.6 400.0 — — —

Repurchase of common stock pursuant to the December 2019 Share Repurchase Program, at cost — — — — — — — ( 16.7 ) ( 5,000.0 ) ( 5,000.0 ) — ( 5,000.0 )

Retirement of common stock pursuant to the December 2019 Share Repurchase Program, at cost — — ( 16.7 ) — ( 121.3 ) — ( 4,878.7 ) 16.7 5,000.0 — — —

Repurchase of common stock pursuant to the March 2019 Share Repurchase Program, at cost — — — — — — — ( 4.1 ) ( 1,279.1 ) ( 1,279.1 ) — ( 1,279.1 )

Retirement of common stock pursuant to the March 2019 Share Repurchase Program, at cost — — ( 4.1 ) — ( 71.0 ) — ( 1,208.1 ) 4.1 1,279.1 — — —

Issuance of common stock under stock option and stock purchase plans — — 0.2 — 49.3 — — — — 49.3 — 49.3

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Compensation expense related to share-based payments — — — — 204.5 — — — — 204.5 — 204.5

Other — — — — ( 0.7 ) — — — — ( 0.7 ) — ( 0.7 )

Balance, December 31, 2020 — $ — 176.2 $ 0.1 $ — $ ( 299.0 ) $ 13,976.3 ( 23.8 ) $ ( 2,977.1 ) $ 10,700.3 $ ( 14.2 ) $ 10,686.1

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Business Overview

Biogen is a global biopharmaceutical company focused on discovering, developing and delivering worldwide innovative therapies for people living with serious neurological and neurodegenerative diseases as well as related therapeutic adjacencies.

We have a leading portfolio of medicines to treat multiple sclerosis (MS), have introduced the first approved treatment for spinal muscular atrophy (SMA) and are providing the first and only approved treatment to address a defining pathology of Alzheimer’s disease.

We also commercialize biosimilars of advanced biologics and focus on advancing our pipeline in neuroscience and specialized immunology.

Lastly, we are focused on accelerating our efforts in digital health to support our commercial and pipeline programs while also creating opportunities for potential digital therapeutics.

We support our drug discovery and development efforts through the commitment of significant resources to discovery, research and development programs and business development opportunities.

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 multiple sclerosis (MS), have introduced the first approved treatment for spinal muscular atrophy (SMA) and co-developed two treatments to address a defining pathology of Alzheimer’s disease.We are focused on advancing our pipeline in neurology, neuropsychiatry, specialized immunology and rare diseases.

We support our drug discovery and development efforts through internal research and development programs and external collaborations.

Our marketed products include TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA for the treatment of MS;

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and FUMADERM for the treatment of severe plaque psoriasis.

We also collaborate with Eisai Co., Ltd.

(Eisai) on the commercialization of LEQEMBI for the treatment of Alzheimer's disease, which was granted accelerated approval by the U.S.

Food and Drug Administration (FDA) in January 2023.

We have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia (CLL) and other conditions;

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OCREVUS for the treatment of primary progressive MS (PPMS) and relapsing MS (RMS);

and other potential anti-CD20 therapies, including mosunetuzumab, pursuant to our collaboration arrangements with Genentech, Inc.

LUNSUMIO (mosunetuzumab), which was granted accelerated approval in the U.S.

during the fourth quarter of 2022 for the treatment of relapsed or refractory follicular lymphoma;

glofitamab, an investigational bispecific antibody for the potential treatment of non-Hodgkin's lymphoma;

and have the option to add other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, Inc.

(Genentech), a wholly-owned member of the Roche Group.

For additional information on our collaboration arrangements with Genentech, please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

Our innovative drug development and commercialization activities are complemented by our biosimilar business that expands access to medicines and reduces the cost burden for healthcare systems.

Through our agreements with Samsung Bioepis Co., Ltd.

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

(Samsung BioLogics), we market and sell BENEPALI, an etanercept biosimilar referencing ENBREL, IMRALDI, an adalimumab biosimilar referencing HUMIRA, and FLIXABI, an infliximab biosimilar referencing REMICADE, in certain countries in Europe.

We have also secured the exclusive rights to commercialize BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, which was approved in the U.S., the E.U.

during the third quarter of 2021.

For additional information on our collaboration arrangements with Samsung Bioepis, please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

In addition to continuing to invest in new potential innovation in MS and SMA we are advancing our mid-to-late stage programs including zuranolone for major depressive disorder (MDD) and postpartum depression (PPD), BIIB080 for Alzheimer's disease, tofersen for amyotrophic lateral sclerosis (ALS) and both litifilimab and dapirolizumab pegol for certain forms of lupus.

We also commercialize biosimilars of advanced biologics including BENEPALI, an etanercept biosimilar referencing ENBREL, IMRALDI, an adalimumab biosimilar referencing HUMIRA, and FLIXABI, an infliximab biosimilar referencing REMICADE, in certain countries in Europe, as well as BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, in the U.S.

We continue to develop potential biosimilar products including BIIB800, a proposed tocilizumab biosimilar referencing ACTEMRA, and SB15, a proposed aflibercept biosimilar referencing EYLEA.

For additional information on our collaboration arrangements, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.

Consolidation

Our consolidated financial statements reflect our financial statements, those of our wholly-owned subsidiaries and those of certain variable interest entities where we are the primary beneficiary.

Our consolidated financial statements reflect our financial statements, those of our wholly-owned subsidiaries and variable interest entities where we are the primary beneficiary.

For consolidated entities where we own or are exposed to less than 100.0 % of the economics, we record net income (loss) attributable to noncontrolling interests, net of tax in our consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties.

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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.

Use of Estimates

The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related

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disclosure of contingent assets and liabilities.

Use of Estimates

On an ongoing basis we evaluate our estimates, judgments and assumptions.

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The length of time and full extent to which the COVID-19 pandemic directly or indirectly impacts our business, results of operations and financial condition, including sales, expense, reserves and allowances, the supply chain, manufacturing, clinical trials, research and development costs and employee-related costs, depends on future developments that are highly uncertain, subject to change and are difficult to predict, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19 as well as the economic impact on local, regional, national and international customers and markets.

We have made estimates of the impact of the COVID-19 pandemic within our consolidated financial statements and there may be changes to those estimates in future periods.

Additionally, the ongoing geopolitical tensions related to the conflict in Ukraine, and the related sanctions and other penalties imposed, are creating substantial uncertainty in the global economy.

The extent and duration of the conflict, sanctions and resulting market disruptions are highly unpredictable.

We have made estimates of the impact of the COVID-19 pandemic and the ongoing geopolitical conflict in Ukraine within our consolidated financial statements and there may be changes to those estimates in future periods.

Revenue Recognition

We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.

We recognize revenue following the five-step model prescribed under the FASB Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers :

We recognize revenue following the five-step model prescribed under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers :

(i) identify contract(s) with a customer;

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Product Revenue

In the U.S., we sell our products primarily to wholesale distributors and specialty pharmacy providers.

In the U.S., we sell our products primarily to wholesale and specialty distributors and specialty pharmacies.

In other countries, we sell our products primarily to wholesale distributors, hospitals, pharmacies and other third-party distribution partners.

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The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenue recognized will not occur in a future period.

Actual amounts may ultimately differ from our estimates.

Actual amounts may ultimately differ from our

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If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

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We determine these reserves based on our historical experience, including the timing of customer payments.

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Contractual adjustments primarily relate to Medicaid and managed care rebates in the U.S., pharmacy rebates, co-payment (copay) assistance, Veterans Administration (VA) and Public Health Service (PHS) discounts, specialty pharmacy program fees and other governmental rebates or applicable allowances.

• Medicaid rebates relate to our estimated obligations to states under established reimbursement arrangements.

• Medicaid rebates:

relate to our estimated obligations to states under established reimbursement arrangements.

Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities in our consolidated balance sheets.

Our liability for Medicaid rebates consists of estimates for claims that a state will make for the current quarter, claims for prior quarters that have been estimated for which an invoice has not been received, invoices received for claims from the prior quarters that have not been paid and an estimate of potential claims that will be made for inventory that exists in the distribution channel at period end.

• Governmental rebates or chargebacks, including VA and PHS discounts, represent our estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices we charge to wholesalers which provide those products.

• Governmental rebates:

or chargebacks, including VA and PHS discounts, represent our estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices we charge to wholesalers which provide those products.

The wholesaler charges us for the difference between what the wholesaler pays for the products and the ultimate selling price to the qualified healthcare providers.

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Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider from the wholesaler, and we generally issue credits for such amounts within a few weeks of the wholesaler notifying us about the resale.

Our reserves for VA, PHS and chargebacks consist of amounts that we expect to issue for inventory that exists at the wholesalers that we expect will be sold to qualified healthcare providers and chargebacks that wholesalers have claimed for which we have not issued a credit.

• Managed care rebates represent our estimated obligations to third-parties, primarily pharmacy benefit managers.

Our reserves for VA, PHS and other chargebacks consist of amounts for inventory that exists at the wholesalers that we expect will be sold to qualified healthcare providers and chargebacks that wholesalers have claimed for which we have not issued a credit.

• Managed care rebates:

represent our estimated obligations to third-parties, primarily pharmacy benefit managers.

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The calculation of the accrual for these rebates is based on an estimate of the coverage patterns and the resulting applicable contractual rebate rate(s) to be earned over a contractual period.

• Copay assistance represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance.

• Copay assistance:

represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance.

The calculation of the accrual for copay is based on an estimate of claims and the cost per claim that we expect to receive associated with inventory that exists in the distribution channel at period end.

• Pharmacy rebates represent our estimated obligations resulting from contractual commitments to sell products to specific pharmacies.

• Pharmacy rebates:

represent our estimated obligations resulting from contractual commitments to sell products to specific pharmacies.

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The calculation of the accrual for these rebates is based on an estimate of the pharmacy’s buying or dispensing patterns and the resulting applicable contractual rebate rate(s) to be earned over the contractual period.

• Other governmental rebates, non-U.S.

• Other governmental rebates:

pharmaceutical taxes or applicable allowances primarily relate to mandatory rebates and discounts in international markets where government-sponsored healthcare systems are the primary payors for healthcare.

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In accordance with contractual terms, wholesalers are permitted to return product for reasons such as damaged or expired product.

The majority of wholesaler returns are due to product expiration.

Expired product return reserves are estimated through a comparison of historical return data to their related sales on a production lot basis.

Historical rates of return are determined for each product and are adjusted for known or expected changes in the marketplace specific to each product.

In addition to discounts, rebates and product returns, we also maintain certain customer service contracts with distributors and other customers in the distribution channel that provide us with inventory management, data and

The majority of

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distribution services, which are generally reflected as a reduction of revenue.

wholesaler returns are due to product expiration.

Expired product return reserves are estimated through a comparison of historical return data to their related sales on a production lot basis.

Historical rates of return are determined for each product and are adjusted for known or expected changes in the marketplace specific to each product.

To the extent we can demonstrate a separable benefit and fair value for these services we classify these payments in selling, general and administrative expense in our consolidated statements of income.

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for RITUXAN and GAZYVA;

(ii) other revenue from anti-CD20 therapeutic programs, which primarily consist of our share of pre-tax co-promotion profits on RITUXAN in Canada and royalty revenue on sales of OCREVUS.

(ii) royalty revenue on sales of OCREVUS;

(ii) other revenue from anti-CD20 therapeutic programs, which consists of our share of pre-tax co-promotion profits on RITUXAN in Canada.

Pre-tax co-promotion profits on RITUXAN and GAZYVA are calculated and paid to us by Genentech and the Roche Group.

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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.

In January 2022 we exercised our option with Genentech to participate in the joint development and commercialization of LUNSUMIO, which was later approved by the FDA in December 2022.

Under our collaboration with Genentech, we will be entitled to co-promotion operating profits and losses in the U.S.

for LUNSUMIO.

Prior to regulatory approval, we record our share of the expense incurred by the collaboration for the development of anti-CD20 products within research and development expense and pre-commercialization costs within selling, general and administrative expense in our consolidated statements of income.

After an anti-CD20 product is approved, we record our share of the development and sales and marketing expense related to that product as a reduction of our share of pre-tax profits in revenue from anti-CD20 therapeutic programs.

Accordingly, Biogen recorded its share of the expense incurred in connection with the development of LUNSUMIO within research and development expense and its share of pre-commercialization costs within selling, general and administrative expense through December 2022, when regulatory approval was granted by the FDA.

Beginning in January 2023, our share of any pre-tax profits and losses in the U.S.

for LUNSUMIO will be reflected as a component of revenue from anti-CD20 therapeutic programs within our consolidated statements of income.

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

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Other Revenue

Contract Manufacturing and Other Revenue

We record contract manufacturing and other revenue primarily from amounts earned under contract manufacturing agreements.

Revenue under contract manufacturing agreements is recognized when the customer obtains control of the product, which may occur at a point in time or over time depending on the terms and conditions of the agreement.

Royalty Revenue

We recognize royalty revenue related to sales by our licensees of products covered under patents that we own.

Royalty revenue reflects the royalties we receive from net sales on products related to patents that we have out-licensed, as well as royalty revenue on biosimilar products from our collaboration arrangements with Samsung Bioepis Co., Ltd.

(Samsung Bioepis).

These arrangements resulted from an exchange of a license and utilize the sales and usage based royalty exception.

Therefore, royalties received are recognized as the underlying sales occur.

Collaborative and Other Relationships

We have a number of significant collaborative and other third-party relationships for revenue and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates.

We also have a number of significant collaborative and other third-party relationships for revenue and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates.

Where we are the principal on sales transactions with third parties, we recognize revenue, cost of sales and operating expense on a gross basis in their respective lines in our consolidated statements of income.

Where we are not the principal on sales transactions with third-parties, we record our share of the revenue, cost of sales and operating expense on a net basis in collaborative and other relationships included in other revenue in our consolidated statements of income.

Our development and commercialization arrangements with Genentech and Samsung Bioepis represent collaborative arrangements as each party is an active participant in one or more joint operating activities and is exposed to significant risks and rewards of these arrangements.

These arrangements resulted from an exchange of a license and utilize the sales and usage based royalty exception.

Where we are not the principal on sales transactions with third parties, our share of the revenue, cost of sales and operating expense is recorded as a component of other revenue in our consolidated statements of income.

Our development and commercialization arrangements with Genentech, Eisai and Samsung Bioepis represent collaborative arrangements as each party is an active participant in one or more joint operating activities and is exposed to significant risks and rewards of these arrangements.

These arrangements resulted from an exchange of a license and utilize the sales and usage based royalty exception, as applicable.

Therefore, revenue relating to royalties or profit-sharing amounts received is recognized as the underlying sales occur.

For additional information on our collaboration arrangements with Genentech and Samsung Bioepis, please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

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Other Corporate Revenue

We record other corporate revenue primarily from amounts earned under contract manufacturing agreements.

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

Fair Value Measurements

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The majority of our financial assets have been classified as Level 2.

Our financial assets (which include our cash equivalents, marketable debt securities and certain of our marketable equity securities, derivative contracts and plan assets for deferred compensation) have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models.

Our financial assets (which typically include our cash equivalents, marketable debt securities and certain of our marketable equity securities, derivative contracts and plan assets for deferred compensation) have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models.

The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value.

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After completing our validation procedures, we did not adjust or override any fair value measurements provided by our pricing services as of December 31, 2022 and 2021.

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Other Assets and Liabilities

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We consider only those investments that are highly liquid, readily convertible to cash and that mature within three months from date of purchase to be cash equivalents.

As of December 31, 2021 and 2020, cash equivalents were comprised of money market funds, commercial paper, overnight reverse repurchase agreements and other debt securities with maturities less than 90 days from the date of purchase.

As of December 31, 2022 and 2021, cash equivalents were comprised of money market funds, commercial paper, overnight reverse repurchase agreements and other debt securities with maturities less than three months from the date of purchase.

Accounts Receivable

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We do not adjust our receivables for the effects of a significant financing component at contract inception if we expect to collect the receivables in one year or less from the time of sale.

In countries where we have experienced a pattern of payments extending beyond our contractual payment term and we expect to collect receivables greater than one year from the time of sale, we have assessed whether the customer has a significant financing component and discounted our receivables and reduced related revenue over the period of time that we estimate those amounts will be paid using the country’s market-based borrowing rate for such period.

The related receivables are classified at the time of sale as non-current assets.

We accrete interest

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income on these receivables, which is recorded as a component of other income (expense), net in our consolidated statements of income.

We provide reserves against accounts receivable for estimated losses that may result from a customer's inability to pay.

Amounts determined to be uncollectible are charged or written-off against the reserve.

Receivables from Samsung BioLogics

In April 2022 we completed the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics Co., Ltd (Samsung BioLogics), which resulted in a receivable of approximately $ 1.3 billion in cash to be deferred over two payments of approximately $ 812.5 million due at the first anniversary and approximately $ 437.5 million due at the second anniversary of the closing of this transaction.

The payments due to us from Samsung BioLogics have been recorded at their estimated fair values through the use of risk-adjusted discount rates.

For additional information on the accounting for the sale of our equity interest in Samsung Bioepis and these receivables, please read Note 3, Dispositions , to these consolidated financial statements.

Concentration of Credit Risk

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Realized gains and losses are reported in other (income) expense, net on a specific identification basis.

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Marketable Equity Securities and Venture Capital Funds

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We also invest in equity securities of companies whose securities are not publicly traded and where fair value is not readily available.

These investments are recorded using either the equity method of accounting or the cost minus impairment adjusted for changes in observable prices, depending on our ownership percentage and other factors that suggest we have significant influence.

These investments are recorded using either the equity method of accounting or the cost minus impairment adjusted for observable price changes, depending on our ownership percentage and other factors that suggest we have significant influence.

We monitor these investments to evaluate whether any increase or decline in their value has occurred, based on the implied value of recent company financings, public market prices of comparable companies and general market conditions.

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Unrealized losses on available-for-sale debt securities that are determined to be temporary, and not related to credit loss, are recorded, net of tax, in accumulated other comprehensive income (loss).

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For available-for-sale debt securities with unrealized losses, management performs an analysis to assess whether we intend to sell or whether we would more likely than not be required to sell the security before the expected recovery of the amortized cost basis.

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Capitalization of Inventory Costs

We capitalize inventory costs associated with our products prior to regulatory approval, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized.

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expected to be realized.

We consider numerous attributes in evaluating whether the costs to manufacture a particular product should be capitalized as an asset.

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Finally, we consider the reimbursement strategies that may prevail with respect to the product and assess the economic benefit that we are likely to realize.

We expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or significant delay of approval by necessary regulatory bodies.

We expense previously capitalized costs related to pre-approval inventory upon changes in such judgments, due to, among other potential factors, a denial or significant delay of approval by necessary regulatory bodies.

Obsolescence and Unmarketable Inventory

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Amounts written-down due to unmarketable inventory are charged to cost of sales in our consolidated statements of income.

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Property, Plant and Equipment

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Computer Software and Hardware 3 to 5 years

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When we dispose of property, plant and equipment, we remove the associated cost and accumulated depreciation from the related accounts in our consolidated balance sheets and include any resulting gain or loss in our consolidated statements of income.

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Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term.

When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that they will be exercised.

We use the implicit rate when readily determinable and use our incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the commencement date in determining the present value of the lease payments.

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We also have real estate lease agreements which are subleased to third-parties.

Operating leases for which we are the sublessor are included in accrued expense and other and other long-term liabilities in our consolidated

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balance sheets.

Operating leases for which we are the sublessor are included in accrued expense and other and other long-term liabilities in our consolidated balance sheets.

We recognize sublease income on a straight-line basis over the lease term in our consolidated statements of income.

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Amortization is recorded within amortization and impairment of acquired intangible assets in our consolidated statements of income.

Acquired and in-licensed rights and patents primarily relate to our acquisition of all remaining rights to TYSABRI from Elan Pharma International Ltd.

(Elan), an affiliate of Elan Corporation, plc.

Acquired and in-licensed rights and patents also include other amounts related to our other marketed products and programs acquired through business combinations.

Developed technology primarily relates to our AVONEX product, which was recorded in connection with the merger of Biogen, Inc.

and IDEC Pharmaceuticals Corporation in 2003.

We amortize the intangible assets related to our TYSABRI, AVONEX, SPINRAZA, VUMERITY and TECFIDERA (rest of world) products using the economic consumption method based on revenue generated from the products underlying the related intangible assets.

An analysis of the anticipated lifetime revenue of our TYSABRI, AVONEX, SPINRAZA, VUMERITY and TECFIDERA (rest of world) products is performed annually during our long-range planning cycle and whenever events or changes in circumstances would significantly affect the anticipated lifetime revenue of our TYSABRI, AVONEX, SPINRAZA, VUMERITY and TECFIDERA (rest of world) products.

We amortize the intangible assets related to our marketed products using the economic consumption method based on revenue generated from the products underlying the related intangible assets.

An analysis of the anticipated lifetime revenue of our marketed products is performed annually during our long-range planning cycle and whenever events or changes in circumstances would significantly affect anticipated lifetime revenue of the relevant products.

Intangible assets related to trademarks, trade names and IPR&D prior to commercialization are not amortized because they have indefinite lives;

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We review our intangible assets with indefinite lives for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

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Acquired In-process Research and Development (IPR&D)

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Additionally, the projections consider the relevant market sizes and growth factors, expected trends in technology and the nature and expected timing of new product introductions by us and our competitors.

The rates utilized to discount the net cash flow to their present value are commensurate with the stage of development of the projects and uncertainties in the economic estimates used in the projections.

The rates utilized to discount the net cash flow to present value are commensurate with the stage of development of the projects and uncertainties in the economic estimates used in the projections.

Upon the acquisition of IPR&D, we complete an assessment of whether our acquisition constitutes the purchase of a single asset or a group of assets.

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If the carrying value of our acquired IPR&D exceeds its fair value, then the intangible asset is written down to its fair value.

Changes in estimates and assumptions used in determining the fair value of our

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acquired IPR&D could result in an impairment.

Changes in estimates and assumptions used in determining the fair value of our acquired IPR&D could result in an impairment.

Impairments are recorded within amortization and impairment of acquired intangible assets in our consolidated statements of income.

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting.

Goodwill is not amortized, but is reviewed for impairment.

Goodwill is reviewed for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of the goodwill may not be recoverable.

Goodwill is not amortized, but is reviewed for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of the goodwill may not be recoverable.

We compare the fair value of our reporting unit to its carrying value.

If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of our reporting unit, we would record an impairment loss equal to the difference.

As described in Note 24, Segment Information, to these consolidated financial statements, we operate in one operating segment, which is our only reporting unit.

As described in Note 25, Segment Information, to these consolidated financial statements, we operate as one operating segment, which is our only reporting unit.

Impairment of Long-Lived Assets

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Changes in the fair value of our contingent consideration obligations are recognized in our consolidated statements of income.

Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flow and reserves associated with products upon commercialization, changes in the assumed achievement or timing of any cumulative sales-based and development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval.

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commercialization, changes in the assumed achievement or timing of any cumulative sales-based and development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval.

Discount rates in our valuation models represent a measure of the credit risk associated with settling the liability.

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We assess at inception and on an ongoing basis, whether the derivative instruments that are used in hedging transactions are highly effective in offsetting the changes in cash flow or fair values of the hedged items.

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the forward points portion of the derivative instruments used in a hedging transaction from the effectiveness test and record the fair value gain or loss related to this portion each period in our consolidated statements of income in the same line as the underlying hedged item.

We exclude the forward points portion of the derivative instruments used in a hedging transaction from the effectiveness test and record the fair value gain or loss related to this portion each period in our consolidated statements of income in the same line as the underlying hedged item.

If we determine that a forecasted transaction is no longer probable of occurring, we discontinue hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the contract is recognized in current earnings.

Net Investment Derivative Instruments

We are exposed to the impact of foreign exchange fluctuations on our investment in the equity of Samsung Bioepis, which is denominated in a currency other than the U.S.

dollar, and could adversely impact the U.S.

dollar value of this investment.

Using derivative instruments, we have hedged our net investment position to mitigate the effects of foreign exchange fluctuations.

We recognize these designated net investment hedges as either assets or liabilities, at fair value, in our consolidated balance sheets.

Desi gnated net investment hedges are recognized as either assets or liabilities, at fair value, in our consolidated balance sheets.

We hedge the changes in the spot exchange rate in accumulated other comprehensive income (loss) and exclude changes to the forward rate and amortize the forward points in other (income) expense, net in our consolidated statements of income over the term of the contract.

We classify the cash flow from these instruments in the same category as the cash flow from the hedged items.

Beginning in the second quarter of 2022 we no longer held net investment hedges as they were closed with the sale of our 49.9 % equity interest in Samsung Bioepis in April 2022.

For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to these consolidated financial statements.

For additional information on our derivative instruments and hedging activities, please read Note 10, Derivative Instruments , to these consolidated financial statements.

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Translation adjustments of these subsidiaries are included in other (income) expense, net in our consolidated statements of income.

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Royalty Cost of Sales

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Where awards are made with non-substantive vesting periods (for instance, where a portion of the award vests upon retirement eligibility), we estimate and recognize expense based on the period from the grant date to the date the employee becomes retirement eligible.

The fair values of our stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model.

The estimated fair values of the stock options are then expensed over the options' vesting periods.

The fair values of our MSUs are estimated using a lattice model with a Monte Carlo simulation.

We apply an accelerated attribution method to recognize share-based compensation expense over the applicable service period

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for our MSUs.

We apply an accelerated attribution method to recognize share-based compensation expense over the applicable service period for our MSUs.

The probability of actual shares expected to be earned is considered in the grant date valuation, therefore the expense is not adjusted to reflect the actual units earned.

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Research and development expense consists of expenses incurred in performing research and development activities, which include compensation and benefits, facilities and overhead expense, clinical trial expense and fees paid to contract research organizations (CROs), clinical supply and manufacturing expense, write-offs of inventory that was previously capitalized in anticipation of product launch and determined to no longer be realizable and other outside expense and upfront fees and milestones paid to third-party collaborators.

Research and development expense is expensed as incurred.

Research and development

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expense is expensed as incurred.

Upfront and milestone payments made to third-party collaborators are expensed as incurred up to the point of regulatory approval.

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We record payments received from our collaborative partners for their share of the development costs as a reduction of research and development expense, except as discussed in Note 19, Collaborative and Other Relationships, to these consolidated financial statements.

Because an initial indication has been approved for both RITUXAN and GAZYVA, expense incurred by Genentech in the ongoing development of RITUXAN and GAZYVA are not recorded as research and development expense, but rather reduce our share of profits recorded as a component of revenue from anti-CD20 therapeutic programs.

Expenses incurred by Genentech in the ongoing development of RITUXAN, GAZYVA and other products for which an initial indication has been approved are not recorded as research and development expense, but rather reduce our share of profits recorded as a component of revenue from anti-CD20 therapeutic programs.

For collaborations with commercialized products, if we are the principal, we record revenue and the corresponding operating costs in their respective line items in our consolidated statements of income.

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Advertising costs are expensed as incurred.

For the years ended December 31, 2021, 2020 and 2019, advertising costs totaled $ 98.7 million, $ 111.8 million and $ 79.2 million, respectively.

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For the years ended December 31, 2022, 2021 and 2020, advertising costs t otaled $ 54.1 million, $ 98.7 million and $ 111.8 million, respectively.

The provision for income taxes includes federal, state, local and foreign taxes.

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On a quarterly basis, we review the status of each significant matter and assess its potential financial exposure.

Significant judgment is required in both the determination of probability and as to whether an exposure is reasonably estimable.

Significant judgment is

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required in both the determination of probability and as to whether an exposure is reasonably estimable.

Because of uncertainties related to these matters, accruals are based only on the best information available at the time.

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Unless otherwise discussed below, we do not believe that the adoption of recently issued standards have or may have a material impact on our consolidated financial statements or disclosures.

In December 2019 the FASB issued Accounting Standards Update No.

Fair Value Measurements

In June 2022 the FASB issued Accounting Standards Update (ASU) No.

2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions .

This standard clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

This standard becomes effective for us on January 1, 2024.

We elected to early adopt this standard on a prospective basis during the third quarter of 2022.

Upon adoption, we recorded an immaterial amount in other (income) expense, net in our consolidated statements of income, as a result of removing the impact of the remaining contractual sale restrictions from the fair value measurement of certain shares in Sage Therapeutics, Inc.

In December 2019 the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

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This standard became effective for us on January 1, 2021, and did not have a material impact on our consolidated financial statements and related disclosures.

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BIIB118 Acquisition

In March 2020 we acquired BIIB118 (CK1 inhibitor) for the potential treatment of patients with behavioral and neurological symptoms across various psychiatric and neurological diseases from Pfizer Inc.

We are developing BIIB118 for the potential treatment of irregular sleep wake rhythm disorder in Parkinson’s disease and plan to develop BIIB118 for the potential treatment of sundowning in Alzheimer's disease.

In connection with this acquisition, we made an upfront payment of $ 75.0 million to Pfizer, which was accounted for as an asset acquisition and recorded as acquired IPR&D in our consolidated statements of income as BIIB118 has not yet reached technological feasibility.

We may also pay Pfizer up to $ 635.0 million in potential additional development and commercialization milestone payments as well as tiered royalties in the high single digits to sub-teens.

Acquisition of Nightstar Therapeutics plc

In June 2019 we completed our acquisition of all of the outstanding shares of Nightstar Therapeutics plc (NST), a clinical-stage gene therapy company focused on adeno-associated virus treatments for inherited retinal disorders.

As a result of this acquisition, we added two mid- to late-stage clinical assets, as well as preclinical programs, in ophthalmology.

These assets included BIIB111 (timrepigene emparvovec), for the potential treatment of choroideremia, and BIIB112 (cotoretigene toliparvovec), for the potential treatment of X-linked retinitis pigmentosa.

Under the terms of the acquisition, we paid NST shareholders $ 25.50 in cash for each issued and outstanding NST share, which totaled $ 847.6 million.

In addition, we paid $ 4.6 million in cash for equity compensation, which was attributable to pre-combination services and was reflected as a component of the total purchase price paid.

The fair value of equity compensation attributable to the post-combination service period was $ 26.2 million, of which $ 18.4 million was recognized as a charge to selling, general and administrative expense with the remaining $ 7.8 million as a charge to research and development expense in our consolidated statements of income.

These amounts were associated with the accelerated vesting of stock options previously granted to NST employees and were fully paid in cash as of June 30, 2019.

We funded this acquisition through available cash and accounted for it as an acquisition of a business.

We finalized purchase accounting for this acquisition in the fourth quarter of 2019.

The fair value of the IPR&D programs acquired was determined through a probability adjusted discounted cash flow analysis utilizing a discount rate of 12.5 %.

We recorded IPR&D assets for BIIB111 and BIIB112 at their initial fair values of $ 480.0 million and $ 220.0 million, respectively.

Some of the more significant assumptions utilized in our asset valuations included the estimated net cash flows for each year for each asset or product, including net revenue, cost of sales, research and development and other operating expense, the potential regulatory and commercial success risks, competitive trends impacting the asset and each cash flow stream as well as other factors.

These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 fair value measurements.

We recognized goodwill in relation to the fair value associated with NST workforce's expertise and early research in retinal disorders.

We also recognized goodwill in relation to the establishment of a deferred tax liability for the acquired IPR&D intangible assets, which have no tax basis.

This deferred tax liability is net of the related impacts on the deferred taxes for GILTI.

Goodwill that is tax deductible for GILTI purposes was approximately $ 60.9 million.

There is no remaining book value associated with either BIIB111 or BIIB112 as of December 31, 2021, as we have fully impaired both of these IPR&D assets.

For additional information, please read Note 6, Intangible Assets and Goodwill, to these consolidated financial statements.

Divestiture of Hillerød, Denmark Manufacturing Operations

In August 2019 we completed the sale of all of the outstanding shares of our subsidiary that owned our biologics manufacturing operations in Hillerød, Denmark to FUJIFILM Corporation (FUJIFILM).

Upon the closing of this transaction, we received approximately $ 881.9 million in cash, which may be adjusted based on other contractual terms, which are discussed below.

We determined that the operations disposed of in this transaction did not meet the criteria to be classified as discontinued operations under the applicable guidance.

In 2022 we discontinued further development of BIIB118 based on the decision by management as part of its strategic review process.

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As part of this transaction, we provided FUJIFILM with certain minimum batch production commitment guarantees.

There is a risk that the minimum contractual batch production commitments will not be met.

Based upon current estimates we do not expect to incur an adverse commitment obligation associated with such guarantees.

We may further adjust this estimate based upon changes in business conditions, which may result in the increase or reduction of this adverse commitment obligation in subsequent periods.

We also may be obligated to indemnify FUJIFILM for liabilities that existed relating to certain business activities incurred prior to the closing of this transaction.

In addition, we may earn certain contingent payments based on future manufacturing activities at the Hillerød facility.

For the disposition of a business, our policy is to recognize contingent consideration when the consideration is realizable.

We currently believe the probability of earning these payments is remote and therefore we did not include these contingent payments in our calculation of the fair value of the operations.

As part of this transaction, we entered into certain manufacturing services agreements with FUJIFILM pursuant to which FUJIFILM will use the Hillerød facility to produce commercial products for us, such as TYSABRI, as well as other third-party products.

For the year ended December 31, 2019, we recognized a total net loss of approximately $ 124.2 million related to the transaction in our consolidated statements of income.

This loss included a pre-tax loss of $ 55.3 million, which was recorded in loss on divestiture of Hillerød, Denmark manufacturing operations.

The loss recognized was based on exchange rates and business conditions on the closing date of this transaction, and included costs to sell our Hillerød, Denmark manufacturing operations of approximately $ 11.2 million and our estimate of the fair value of adverse commitments of approximately $ 74.0 million, primarily associated with the guarantee of future minimum batch production at the Hillerød facility.

We also recorded a tax expense of $ 68.9 million related to this transaction.

During the year ended December 31, 2020, we reduced our estimate of the fair value of the adverse commitment associated with the guarantee of future batch production by approximately $ 62.0 million based on our current manufacturing forecasts.

Additionally, we recorded a reduction to our pre-tax loss of approximately $ 30.5 million due to a refund of interest paid associated with a tax matter.

Our estimate of the fair value of the adverse commitments is a Level 3 measurement and is based on forecasted batch production at the Hillerød facility.

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.

Under the terms of this transaction, we received approximately $ 1.0 billion in cash at closing and expect to receive approximately $ 1.3 billion in cash to be deferred over two payments of approximately $ 812.5 million due at the first anniversary and approximately $ 437.5 million due at the second anniversary of the closing of this transaction.

Prior to the sale, the carrying value of our investment in Samsung Bioepis totaled $ 581.6 million.

For the year ended December 31, 2022, we recognized a pre-tax gain of approximately $ 1.5 billion related to this transaction, which was recorded in other (income) expense, net in our consolidated statements of income.

This pre-tax gain included reclassifications from accumulated other comprehensive income (loss) to net income of approximately $ 58.9 million in cumulative translation losses, partially offset by approximately $ 57.0 million in gains resulting from the termination of our net investment hedge.

We have concluded that the divestment of Samsung Bioepis does not meet the criteria to be reported as discontinued operations in our consolidated financial statements, as our decision to divest this business does not represent a strategic shift that will have a major effect on our operations and financial results.

We elected the fair value option and measured the payments due to us from Samsung BioLogics at fair value.

As of December 31, 2022, the estimated fair values of the first and second payments using risk-adjusted discount rates of 5.7 % and 5.9 % , respectively, were approximately $ 798.8 million and $ 405.4 million , respectively.

These payments have been classified as level 3 measurements and are reflected in other current assets and investments and other assets, respectively, in our consolidated balance sheets.

For the year ended December 31, 2022, we recognized a gain of approximately $ 10.7 million and a loss of approximately $ 1.4 million to reflect the changes in fair value related to our first and second payments, respectively.

These changes were recorded in other (income) expense, net in our consolidated statements of income.

As part of this transaction, we are also eligible to receive up to an additional $ 50.0 million upon the achievement of certain commercial milestones.

Our policy for contingent payments of this nature is to recognize the payments in the period that they become realizable, which is generally the same period in which the payments are earned.

If any payments due to us remain outstanding after the second anniversary of the closing of this transaction, we may elect to receive shares of Samsung BioLogics common stock at a 5.0 % discount in lieu of a cash payment for the remaining amount due.

Currently, we believe that the likelihood of Samsung BioLogics failing to make timely payments to us for the amounts due is remote.

Additionally, for the year ended December 31, 2022 , we recorded a discrete tax expense of approximately $ 257.9 million related to this transaction, which is reflected in income tax (benefit) expense in our consolidated statements of income.

Restructuring

2022 Cost Saving Initiatives

In December 2021 and May 2022 we announced our plans to implement a series of cost-reduction measures during 2022.

These savings are being achieved through a number of initiatives, including reductions to our workforce, the substantial elimination of our commercial ADUHELM infrastructure, the consolidation of certain real estate locations and operating efficiency gains across our selling, general and administrative and research and development functions.

Under these initiatives, we estimate we will incur total restructuring charges of approximately $ 131.0 million, primarily related to severance.

These amounts were substantially incurred during 2022.

As of December 31, 2022, approximately $ 35.9 million remained in our restructuring reserve and payments are expected to be made through 2026.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the year ended December 31, 2022, we recognized approximately $ 131.1 million of net pre-tax restructuring charges related to our 2022 cost saving initiatives, of which approximately $ 112.6 million consisted of employee severance costs.

These costs were recorded in restructuring charges in our consolidated statements of income.

Our restructuring reserve is included in accrued expense and other in our consolidated balance sheets.

In September 2022 we entered into an agreement to partially terminate a portion of our lease located at 300 Binney Street, Cambridge, MA (300 Binney Street), as well as to reduce the lease term for the majority of the remaining space.

This resulted in a gain of approximately $ 5.3 million, which was recorded within restructuring charges in our consolidated statements of income for the year ended December 31, 2022.

For additional information on our 300 Binney Street lease modification, please read Note 12, Leases , to these consolidated financial statements.

Following an evaluation of our current capacity needs, in March 2022 we ceased using a patient services office space in Durham, NC.

Our decision to cease use of the facility resulted in the immediate expense of certain leasehold improvements and other assets at this facility.

As a result, we recognized approximately $ 10.4 million of accelerated depreciation expense, which was recorded in restructuring charges in our consolidated statements of income for the year ended December 31, 2022.

In May 2022 we entered into a lease assignment agreement whereby we assigned our remaining lease obligations to an external third party.

As a result of the lease assignment, we derecognized the related operating lease obligation and right-of-use asset during the second quarter of 2022.

For the year ended December 31, 2022, we recognized other restructuring costs of approximately $ 13.2 million, which were recorded in restructuring charges in our consolidated statements of income.

Other restructuring costs include items such as facility closure costs, employee non-severance expense, asset write-offs and other costs.

The following table summarizes the charges and spending related to our 2022 workforce reductions for the year ended December 31, 2022 :

(In millions) Total

Restructuring reserve, December 31, 2021 $ —

Expense 112.6

Payment ( 78.0 )

Foreign currency and other adjustments 1.3

Restructuring reserve, December 31, 2022 $ 35.9

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Product Revenue

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Multiple Sclerosis (MS):

$ 1,089.5 $ 1,272.8 $ 2,362.3 $ 2,742.0 $ 1,163.4 $ 3,905.4 $ 3,312.0 $ 1,126.2 $ 4,438.2

Interferon (2)

TECFIDERA $ 417.7 $ 1,026.2 $ 1,443.9 $ 680.6 $ 1,271.3 $ 1,951.9 $ 2,677.7 $ 1,163.4 $ 3,841.1

521.3 32.1 553.4 408.9 1.5 410.4 64.3 — 64.3

Total Fumarate 939.0 1,058.3 1,997.3 1,089.5 1,272.8 2,362.3 2,742.0 1,163.4 3,905.4

AVONEX 649.2 324.3 973.5 830.2 378.5 1,208.7 1,083.4 408.5 1,491.9

PLEGRIDY 148.4 183.5 331.9 152.9 204.5 357.4 190.1 195.5 385.6

Total Interferon 797.6 507.8 1,305.4 983.1 583.0 1,566.1 1,273.5 604.0 1,877.5

TYSABRI 1,123.4 907.5 2,030.9 1,142.2 920.9 2,063.1 1,096.8 849.3 1,946.1

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SPINRAZA 600.2 1,193.3 1,793.5 587.9 1,317.2 1,905.1 787.8 1,264.3 2,052.1

Alzheimer's disease:

3.0 — 3.0 — — — — — —

BENEPALI — 441.0 441.0 — 498.3 498.3 — 481.6 481.6

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FLIXABI — 81.3 81.3 — 99.4 99.4 — 97.9 97.9

4.3 — 4.3 — — — — — —

Biosimilars 4.3 746.8 751.1 — 831.1 831.1 — 795.8 795.8

FUMADERM — 8.2 8.2 — 11.0 11.0 — 12.2 12.2

ADUHELM 4.8 — 4.8 3.0 — 3.0 — — —

Total product revenue $ 3,469.3 $ 4,518.5 $ 7,987.8 $ 3,805.7 $ 5,041.2 $ 8,846.9 $ 5,900.1 $ 4,792.1 $ 10,692.2

(1) Fumarate includes TECFIDERA and VUMERITY.

(1) VUMERITY became commercially available in the E.U.

during the fourth quarter of 2021.

(2) Interferon includes AVONEX and PLEGRIDY.

(3) In June 2021 the FDA granted accelerated approval of ADUHELM, which became commercially available in the U.S.

during the second quarter of 2021.

For additional information, please read Note 18, Collaborative and Other Relationships - Eisai Co., Ltd.

- ADUHELM Collaboration Agreement, to these consolidated financial statements.

(2) BYOOVIZ launched in the U.S.

in June 2022 and became commercially available during the third quarter of 2022.

We recognized revenue from two wholesalers accounting for 26.8 % and 11.1 % of gross product revenue in 2022, 28.8 % and 10.1 % of gross product revenue in 2021 and 30.5 % and 15.3 % of gross product revenue in 2020, respectively.

As of December 31, 2022, two wholesale distributors individually accounted for approximately 22.7 % and 10.9 % of net accounts receivable associated with our product sales, as compared to 21.9 % and 10.2 % as of December 31, 2021, respectively.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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Ending balance $ 153.8 $ 857.7 $ 23.5 $ 1,035.0

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2021

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(In millions) 2022 2021 2020

Royalty revenue on sales of OCREVUS $ 1,136.3 $ 991.7 $ 845.4

Biogen's share of pre-tax profits in the U.S.

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Approximately 16.7 %, 15.1 % and 14.7 % of our total revenue in 2022, 2021 and 2020, respectively, was derived from our collaboration arrangements with Genentech.

For additional information on our collaboration arrangements with Genentech, please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

For additional information on our collaboration

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

arrangements with Genentech, please read Note 19, Collaborative and Other Relationships , to these consolidated financial statements.

Other Revenue

Other revenue is summarized as follows:

Other revenue consists of royalty revenue and contract manufacturing and other revenue and is summarized as follows:

For the Years Ended December 31,

(In millions) 2022 2021 2020

Revenue from collaborative and other relationships:

Revenue earned under our technical development agreement, manufacturing services agreements and royalty revenue on biosimilar products with Samsung Bioepis $ 20.7 $ 20.9 $ 106.2

Other revenue from collaborative and other relationships — 0.7 —

Other royalty and corporate revenue:

Royalty 27.9 33.9 17.0

Other corporate 427.7 719.1 584.5

Contract manufacturing and other revenue $ 417.7 $ 427.7 $ 719.1

Royalty revenue 67.4 48.6 55.5

Total other revenue $ 485.1 $ 476.3 $ 774.6

Other corporate revenue primarily reflects amounts earned under contract manufacturing agreements with our strategic customers, including Bioverativ Inc.

(Bioverativ).

During the years ended December 31, 2021, 2020 and 2019, we recognized $ 18.2 million, $ 48.6 million and $ 383.2 million, respectively, in revenue under the manufacturing and supply agreement with Bioverativ entered into in connection with the spin-off of our hemophilia business.

Contract Manufacturing and Other Revenue

Contract manufacturing and other revenue primarily reflects amounts earned under contract manufacturing agreements with our strategic customers.

During the third quarter of 2019, we amended our agreement with a contract manufacturing customer pursuant to which we licensed certain of our manufacturing-related intellectual property to the customer.

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The second payment became due upon the first anniversary of the regulatory approval and was received during the second quarter of 2021.

The third payment is due on the second anniversary of the regulatory approval.

Other corporate revenue for the year ended December 31, 2020, reflects $ 346.2 million related to the delivery of the license for certain of our manufacturing-related intellectual property under the amended agreement, as discussed above, and the performance of manufacturing product supply services for such customer.

We have allocated the remaining $ 153.8 million of the $ 500.0 million transaction price to the performance of manufacturing product supply services for the customer, which we expect to perform through 2026.

The third payment became due upon the second anniversary of the regulatory approval and was received during the second quarter of 2022.

Contract manufacturing and other revenue for the year ended December 31, 2020, reflects $ 346.2 million related to the delivery of the license for certain of our manufacturing-related intellectual property under the amended agreement, as discussed above, and the performance of manufacturing product supply services for such customer.

We allocated the remaining $ 153.8 million of the $ 500.0 million transaction price to the performance of manufacturing product supply services for the customer, which we expect to perform through 2026.

The value allocated to the manufacturing services was based on expected demand for supply and the fair value of comparable manufacturing and development services.

Royalty Revenue

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

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The components of inventory are summarized as follows:

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Total inventory $ 1,365.5 $ 1,351.5

Balance Sheet Classification:

Inventory $ 1,344.4 $ 1,351.5

Investments and other assets 21.1 —

Total inventory $ 1,365.5 $ 1,351.5

(1) Work in process inventory as of December 31, 2022, includes approximately $ 89.8 million related to LEQEMBI.

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

Inventory amounts written down as a result of excess, obsolescence or unmarketability are charged to cost of sales, and totaled $ 336.2 million, $ 167.6 million and $ 26.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Upon review of the ADUHELM inventory it was determined that a portion of the inventory will not be consumed prior to product expiration based on our latest estimates of forecasted demand.

During the fourth quarter of 2021

Inventory Write-Offs

In April 2022 the Centers for Medicare and Medicaid Services (CMS) released the final National Coverage Decision (NCD) for the class of anti-amyloid treatments in Alzheimer's disease, including ADUHELM.

The final NCD confirmed coverage with evidence development, in which patients with Medicare can only access treatment if they are part of an approved clinical trial.

We expect that this decision will reduce future demand for ADUHELM to a minimal level.

During the first quarter of 2022 we wrote-off approximately $ 275.0 million of inventory related to ADUHELM, as a result of this CMS decision, which was recognized in cost of sales within our consolidated statements of income for the year ended December 31, 2022.

We have recognized approximately $ 136.0 million related to Eisai's 45.0 % share of these charges in collaboration profit (loss) sharing within our consolidated statements of income for the year ended December 31, 2022.

During the fourth quarter of 2021 we wrote-off approximately $ 120.0 million of inventory in excess of forecasted demand related to ADUHELM, which was recognized in cost of sales within our consolidated statements of income for the year ended December 31, 2021.

We have recognized approximately $ 59.0 million related to Eisai's 45.0 % share of these charges in collaboration profit (loss) sharing within our consolidated statements of income for the year ended December 31, 2021.

As of December 31, 2022, the carrying value of our ADUHELM inventory was immaterial.

As of December 31, 2021, we had approximately $ 223.0 million of ADUHELM inventory.

For additional information please read Note 19, Collaborative and Other Relationships , to these consolidated financial statements.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

we wrote-off approximately $ 120.0 million of inventory in excess of forecasted demand related to ADUHELM, which was recognized in cost of sales within our consolidated statements of income.

As of December 31, 2021, we had approximately $ 223.0 million of inventory related to ADUHELM.

For additional information please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

Intangible Assets and Goodwill

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In-process research and development Indefinite until commercialization — — — 132.7 — 132.7

132.7 — 132.7 762.5 — 762.5

Trademarks and trade names Indefinite 64.0 — 64.0 64.0 — 64.0

64.0 — 64.0 64.0 — 64.0

Total intangible assets $ 7,479.3 $ ( 5,629.2 ) $ 1,850.1 $ 7,609.8 $ ( 5,388.5 ) $ 2,221.3

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Amortization of acquired intangible assets, excluding impairment charges, totaled $ 246.3 million, $ 252.0 million and $ 255.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The decrease in amortization of acquired intangible assets, excluding impairment charges, over the three years was primarily due to a low er rate of amortization for acquired intangible assets.

For the year ended December 31, 2021, amortization and impairment of acquired intangible assets reflects the impact of a $ 365.0 million impairment charge related to BIIB111, a $ 220.0 million impairment charge related to BIIB112 and a $ 44.3 million impairment charge related to vixotrigine (BIIB074) for the potential treatment of trigeminal neuralgia (TGN).

T he decrease in amortization of acquired intangible assets, excluding impairment charges, over the three years was primarily du e to a lower rate of amortization for acquired intangible assets.

For the year ended December 31, 2022, amortization and impairment of acquired intangible assets reflects the impact of a $ 119.6 million impairment charge related to vixotrigi ne (BIIB074) for the potential treatment of diabetic painful neuropathy (DPN).

For the year ended December 31, 2021, amortization and impairment of acquired intangible assets reflects the impact of a $ 365.0 million impairment charge related to BIIB111 (timrepigene emparvovec), a $ 220.0 million impairment charge related to BIIB112 (cotoretigene toliparvovec) and a $ 44.3 million impairment charge related to vixotrigine for the potential treatment of trigeminal neuralgia (TGN).

For the year ended December 31, 2020, amortization and impairment of acquired intangible assets reflects the impact of a $ 115.0 million impairment charge related to BIIB111, a $ 75.4 million impairment charge related to BIIB054 (cinpanemab) and a $ 19.3 million impairment charge related to one of our other IPR&D intangible assets.

For the year ended December 31, 2019, amortization and impairment of acquired intangible assets reflects the impact of a $ 215.9 million impairment charge related to certain IPR&D assets associated with the Phase 2b study of BG00011 (STX-100) for the potential treatment of idiopathic pulmonary fibrosis (IPF), which was discontinued in the third quarter of 2019.

Completed Technology

Completed technology primarily relates to our acquisition of all remaining rights to TYSABRI as well as other amounts related to our other marketed products and programs acquired through business combinations.

Completed technology primarily relates to our other marketed products and programs acquired through asset acquisitions, licenses and business combinations.

IPR&D Related to Business Combinations

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(Convergence).

As of December 31, 2022, as a result of our decision to discontinue development of vixotrigine, we recognized an impairment charge reducing the remaining book value to zero .

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In the periods since we acquired vixotrigine, there have been numerous delays in the initiation of Phase 3 studies for the potential treatment of TGN and for the potential treatment of DPN, another form of neuropathic pain.

We have engaged with the U.S.

Food and Drug Administration (FDA) regarding the design of the Phase 3 studies of vixotrigine for the potential treatment of TGN and DPN and are now performing an additional clinical trial of vixotrigine.

In connection with our acquisition of Convergence, we recognized $ 424.6 million of acquired IPR&D intangible assets for vixotrigine.

In the periods following our acquisition of vixotrigine, there were numerous delays in the initiation of Phase 3 studies for the potential treatment of TGN and for the potential t reatment of DPN, another form of neuropathic pain.

We engaged with the FDA regarding the design of the potential Phase 3 studies of vixotrigine for the potential treatment of TGN and DPN and performed an additional clinical trial of vixotrigine, which was completed during 2022.

The performance of this additional clinical trial delayed the initiation of the Phase 3 studies of vixotrigine for the potential treatment of TGN, and, as a result, we recognized an impairment charge of $ 44.3 million related to vixotrigine for the potential treatment of TGN during the first quarter of 2021.

As of December 31, 2021, the carrying value associated with the remaining IPR&D asset for DPN was $ 132.7 million and the fair value of this asset was not significantly in excess of its carrying value.

During the fourth quarter of 2022 we discontinued further development of vixotrigine based on regulatory, development and commercialization challenges.

For the year ended December 31, 2022, we recognized an impairment charge of approximately $ 119.6 million related to vixotrigine for the potential treatment of DPN, reducing the remaining book value of this IPR&D intangible asset to zero.

We also adjusted the value of our contingent consideration obligations related to this asset resulting in a pre-tax gain of approximately $ 209.1 million , which was recognized in (gain) loss on fair value remeasurement of contingent consideration within our consolidated statements of income.

BIIB111 and BIIB112

In connection with our acquisition of Nightstar Therapeutics plc, we recognized $ 480.0 million and $ 220.0 million of acquired IPR&D intangible assets for BIIB111 and BIIB112, respectively.

During the fourth quarter of 2020 we recognized an impairment charge of $ 115.0 million related to BIIB111 as a result of third-party manufacturing delays that impacted the timing and increased the costs associated with advancing BIIB111 through Phase 3 development.

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For the year ended December 31, 2021, we recognized an impairment charge of $ 365.0 million related to BIIB111 and an impairment charge of $ 220.0 million related to BIIB112, reducing the remaining book values of these IPR&D intangible assets to zero .

In addition, for the year ended December 31, 2021 , as a result of our decision to suspend further development of BIIB111 and BIIB112, we recognized charges of approximately $ 39.1 million related to our manufacturing arrangements and other costs that we expect to incur as a result of suspending these programs, which were recorded as research and development expense in our consolidated statements of income.

In addition, as a result of our decision to suspend further development of BIIB111 and BIIB112, we recorded charges of approximately $ 39.1 million during the third quarter of 2021 related to our manufacturing arrangements and other costs that we expect to incur as a result of suspending these programs.

These charges were recognized in research and development expense in our consolidated statements of income for the year ended December 31, 2021.

In connection with our acquisition of Biogen International Neuroscience GmbH (BIN), we recognized a $ 110.9 million acquired IPR&D intangible asset.

In February 2021 we announced that we discontinued development of BIIB054 as a potential treatment of Parkinson's disease as our Phase 2 SPARK study did not meet its primary or secondary endpoints.

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The fair value of the intangible assets and contingent consideration obligations were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs including estimated revenue, costs and probabilities of success.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Estimated Future Amortization of Intangible Assets

1 unchanged sentence

(In millions) As of December 31, 2022

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

6 unchanged sentences

Other includes adjustments related to foreign currency exchange rate fluctuations.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value Measurements

12 unchanged sentences

Marketable equity securities 791.1 791.1 — —

Other current assets:

Receivable from Samsung BioLogics (1)

798.8 — — 798.8

Other assets:

Derivative contracts 63.0 — 63.0 —

Plan assets for deferred compensation 32.8 — 32.8 —

Receivable from Samsung BioLogics (1)

405.4 — — 405.4

Total $ 7,117.9 $ 791.1 $ 5,122.6 $ 1,204.2

Derivative contracts $ 26.0 $ — $ 26.0 $ —

Contingent consideration obligations 209.1 — — 209.1

Total $ 26.0 $ — $ 26.0 $ —

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Represents the fair value of the current and non-current payments 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 consolidated financial statements.

As of December 31, 2021

16 unchanged sentences

Total $ 219.9 $ — $ 10.8 $ 209.1

There have been no material impairments of our assets measured and carried at fair value during the years ended December 31, 2021 and 2020.

In addition, there have been no changes in valuation techniques during the years ended December 31, 2021 and 2020.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The fair value of Level 2 instruments classified as cash equivalents and marketable debt securities was determined through third-party pricing services.

The fair value of Level 2 instruments classified as marketable equity securities represents our investments in the common stock of Sangamo Therapeutics, Inc.

(Sangamo), Denali Therapeutics Inc.

(Denali) and Sage Therapeutics, Inc.

(Sage) and are valued using an option pricing valuation model as the investments are each subject to certain holding period restrictions.

The holding period restrictions for a portion of our Sangamo investment expired during the second quarter of 2021.

The fair value of this portion of our Sangamo investment was a Level 1 measurement as of December 31, 2021.

For additional information on our investments in Sangamo, Denali and Sage common stock, please read Note 8, Financial Instruments , to these consolidated financial statements.

In the third quarter of 2022 we elected to early adopt ASU 2022-03 on a prospective basis, which resulted in removing the impact of contractual sale restrictions from the fair value measurement of our remaining Sage common stock subject to certain holding period restrictions.

As of December 31, 2022, our entire investment in the common stock of Sage was classified as a Level 1 measurement.

Prior to the adoption of this standard, the fair value of Level 2 instruments classified as marketable equity securities represented a portion of our investment in the common stock of Sage and was valued using an option pricing valuation model.

Our investments in the common stock of Sangamo Therapeutics, Inc.

(Sangamo) and Denali Therapeutics Inc.

(Denali) had holding period restrictions that expired during 2022.

As of December 31, 2022, the fair values of our investments in Sangamo and Denali common stock were classified as Level 1 measurements.

Prior to the expiration of these holding period restrictions the investments were classified as Level 2 measurements.

Although the contractual holding period restrictions on our investments in Denali, Sage and Sangamo have expired, our ability to liquidate these investments 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 these consolidated financial statements.

There have been no material impairments of our assets measured and carried at fair value as of December 31, 2022 and 2021.

In addition, there have been no changes in valuation techniques as of December 31, 2022 and 2021.

For a description of our validation procedures related to prices provided by third-party pricing services and our option pricing valuation model, please read the Fair Value Measurements section within Note 1, Summary of Significant Accounting Policies, to these consolidated financial statements.

The following tables summarize the significant unobservable inputs in the fair value measurement of our contingent consideration obligations as of December 31, 2021 and 2020:

As of December 31, 2021

(In millions) Fair Value Valuation Technique Unobservable Input Range Weighted Average

Contingent consideration obligation $ 209.1 Discounted cash flow Discount rate 1.30 % 1.30 %

Expected timing of achievement of development milestones 2023 to 2027 —

As of December 31, 2020

(In millions) Fair Value Valuation Technique Unobservable Input Range Weighted Average

Contingent consideration obligation $ 259.8 Discounted cash flow Discount rate 0.60 % 0.60 %

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

Fair Value Significant

Unobservable Input(s) Range Weighted Average

(In millions) 2022 (1)

2021 Valuation Technique 2021 2022 (1)

Contingent consideration obligations $ — $ 209.1 Discounted cash flow Discount rate 1.30 % — % 1.30 %

Expected timing of achievement of development milestones 2023 to 2027 — —

(1) During the year ended December 31, 2022, we discontinued the development of vixotrigine and as a result we adjusted the fair value of our contingent consideration obligations to zero.

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 10.9 % to certain probability as of December 31, 2021.

There were no transfers of assets or liabilities into or out of Level 3 as of December 31, 2022 and 2021.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The weighted average discount rate was calculated based on the relative fair value of our contingent consideration obligations.

In addition, we apply various probabilities of technological and regulatory success, ranging from 10.9 % to certain probability as of December 31, 2021, to the valuation models to estimate the fair values of our contingent consideration obligations.

Contingent Consideration Obligations

In connection with our acquisitions of Convergence and BIN , we agreed to make additional payments based upon the achievement of certain milestone events.

The following table provides a roll forward of the fair values of our contingent consideration obligations, which are classified as Level 3 measurements:

As of December 31,

(In millions) 2022 2021

Fair value, beginning of year $ 209.1 $ 259.8

Changes in fair value ( 209.1 ) ( 50.7 )

Fair value, end of year $ — $ 209.1

As of December 31, 2021, approximately $ 209.1 million of the fair value of our total contingent consideration obligations was reflected as a component of other long-term liabilities in our consolidated balance sheets.

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

For the year ended December 31, 2022, the changes in fair value of our contingent consideration obligations were primarily due to the discontinuation of further development efforts related to vixotrigine for the potential treatment of TGN and DPN, resulting in a reduction of our contingent consideration obligations of approximatel y $ 195.4 million, and changes in the interest rates used to revalue our contingent consideration liabilities.

For the year ended December 31, 2021, the changes in fair value of our contingent consideration obligations were primarily due to reductions in the probability of technical and regulatory success and delays in the expected timing of the achievement of certain remaining developmental milestones related to our vixotrigine programs.

The fair values of the contingent consideration liabilities were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs.

For additional information on the valuation techniques and inputs utilized in the valuation of our financial assets and liabilities, please read Note 1, Summary of Significant Accounting Policies, to these consolidated financial statements.

Convergence Pharmaceuticals Holdings Limited

In connection with our acquisition of Convergence in February 2015 we recorded a contingent consideration obligation of $ 274.5 million.

As of December 31, 2021, the fair value of this contingent consideration obligation was $ 209.1 million.

During the fourth quarter of 2022 we discontinued further development of vixotrigine based on regulatory, development and commercialization challenges.

As a result, the fair value of the contingent consideration obligations related to Convergence has been adjusted to zero, resulting in a pre-tax gain of approximately $ 209.1 million for the year ended December 31, 2022.

This pre-tax gain was recorded in (gain) loss on fair value remeasurement of contingent consideration within our consolidated statements of income.

Biogen International Neuroscience GmbH

In connection with our acquisition of BIN in December 2010 we recorded a contingent consideration obligation of $ 81.2 million.

We discontinued further development of BIIB054 for the potential treatment of Parkinson's disease based on the results of a Phase 2 study of BIIB054.

Additionally, during the third and fourth quarters of 2020 we discontinued other programs related to our acquisition of BIN for which we had immaterial contingent consideration obligations.

As a result, the fair value of the contingent consideration obligations related to our acquisition of BIN was adjusted to zero , resulting in a gain of $ 101.5 million for the year ended December 31, 2020.

This pre-tax gain was recorded in (gain) loss on fair value remeasurement of contingent consideration within our consolidated statements of income.

Nonrecurring Fair Value Measurements

For the year ended December 31, 2022, we recorded impairment charges of $ 119.6 million related to vixotrigine.

As a result, the remaining book values associated with these programs were reduced to zero.

For the year ended December 31, 2021, we recorded impairment charges of $ 365.0 million related to BIIB111 and $ 220.0 million related to BIIB112.

As a result, the remaining book values associated with these programs were reduced to zero .

For additional information, please read Note 6, Intangible Assets and Goodwill , to these consolidated financial statements.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For additional information on our impairments for intangible assets, please read Note 7, Intangible Assets and Goodwill , to these consolidated financial statements.

Financial Instruments Not Carried at Fair Value

Other Financial Instruments

Due to the short-term nature of certain financial instruments, the carrying value reflected in our consolidated balance sheets for current accounts receivable, due from anti-CD20 therapeutic programs, other current assets, accounts payable and accrued expense and other, approximates fair value.

Debt Instruments

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Total $ 5,410.2 $ 8,004.7

(1) In February 2021 we completed a private offer to exchange (Exchange Offer) our tendered 5.200 % Senior Notes due September 15, 2045 (2045 Senior Notes), whereby approximately $ 624.6 million of our 2045 Senior Notes were exchanged for approximately $ 700.7 million of a new series of 3.250 % Senior Notes due February 15, 2051 (2051 Senior Notes).

For additional information on our Exchange Offer, please read Note 12, Indebtedness , to these consolidated financial statements.

(1) In July 2022 we redeemed our 3.625 % Senior Notes due September 15, 2022 in full.

For additional information on the redemption, please read Note 13, Indebtedness , to these consolidated financial statements.

The fair values of each of our series of Senior Notes were determined through market, observable and corroborated sources.

The changes in the fair values of our Senior Notes as of December 31, 2022, compared to 2021, are primarily related to increases in U.S.

treasury yields used to value our Senior Notes since December 31, 2021.

For additional information related to our Senior Notes, please read Note 13, Indebtedness , to these consolidated financial statements.

Contingent Consideration Obligations

In connection with our acquisitions of Convergence and Biogen International Neuroscience GmbH (BIN) , we agreed to make additional payments based upon the achievement of certain milestone events.

The following table provides a roll forward of the fair values of our contingent consideration obligations, which includes Level 3 measurements:

As of December 31,

(In millions) 2021 2020

Fair value, beginning of year $ 259.8 $ 346.1

Changes in fair value ( 50.7 ) ( 86.3 )

Fair value, end of year $ 209.1 $ 259.8

As of December 31, 2021 and 2020, approximately $ 209.1 million and $ 110.3 million, respectively, of the fair value of our total contingent consideration obligations was reflected as a component of other long-term liabilities in our consolidated balance sheets with the remaining balance reflected as a component of accrued expense and other.

For the year ended December 31, 2021, changes in the fair value of our contingent consideration obligations were primarily due to reductions in the probability of technical and regulatory success and delays in the expected timing of the achievement of certain remaining developmental milestones related to our vixotrigine programs.

For the year ended December 31, 2020, changes in the fair value of our contingent consideration obligations were primarily due to our discontinuing development of BIIB054 for the potential treatment of Parkinson's disease, resulting in a reduction of our contingent consideration obligations of $ 51.0 million as well as other changes in the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

probability and the expected timing of the achievement of certain remaining developmental milestones, changes in the interest rates used to revalue our contingent consideration liabilities and the passage of time.

The fair values of the contingent consideration liabilities were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs.

Convergence Pharmaceuticals Holdings Limited

In connection with our acquisition of Convergence in February 2015 we recorded a contingent consideration obligation of $ 274.5 million.

As of December 31, 2021 and 2020, the fair value of this contingent consideration obligation was $ 209.1 million and $ 259.8 million, respectively.

Our most recent valuation was determined based upon net cash flow projections of $ 400.0 million, probability weighted and discounted using a rate of 1.3 %, which is a measure of the credit risk associated with settling the liability.

Biogen International Neuroscience GmbH

In connection with our acquisition of BIN in December 2010 we recorded a contingent consideration obligation of $ 81.2 million.

We discontinued further development of BIIB054 for the potential treatment of Parkinson's disease based on the results of a Phase 2 study of BIIB054.

Additionally, during the third and fourth quarters of 2020 we discontinued other programs related to our acquisition of BIN for which we had immaterial contingent consideration obligations.

Acquired IPR&D

The fair values of the acquired IPR&D assets were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs including estimated revenue and probabilities of success.

These assets are tested for impairment annually until commercialization, after which time the acquired IPR&D will be amortized over its estimated useful life using the economic consumption method.

In connection with our acquisition of NST, we recognized $ 480.0 million and $ 220.0 million of acquired IPR&D intangible assets for BIIB111 and BIIB112, respectively.

During the fourth quarter of 2020 we recognized an impairment charge of $ 115.0 million related to BIIB111.

During the third quarter of 2021 we suspended further development on these programs and recognized an impairment charge of $ 365.0 million related to BIIB111 and an impairment charge of $ 220.0 million related to BIIB112, reducing the fair value of these IPR&D intangible assets to zero .

In connection with our acquisition of BIN, we recognized a $ 110.9 million acquired IPR&D intangible asset.

During the fourth quarter of 2020 we discontinued further development of BIIB054 for the potential treatment of Parkinson's disease and recognized an impairment charge of $ 75.4 million to reduce the fair value of the IPR&D intangible asset to zero .

In connection with our acquisition of Stromedix Inc., we recognized a $ 219.2 million acquired IPR&D intangible asset.

During the third quarter of 2019 we discontinued the Phase 2b study of BG00011 for the potential treatment of IPF and recognized an impairment charge of $ 215.9 million to reduce the fair value of the IPR&D intangible asset to zero .

For additional information on our IPR&D intangible assets, including a discussion of our most significant assumptions, please read Note 6, Intangible Assets and Goodwill , to these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Financial Instruments

The following table summarizes our financial assets with maturities of less than 90 days from the date of purchase included in cash and cash equivalents in our consolidated balance sheets:

The following table summarizes our financial assets with maturities of less than three months from the date of purchase included in cash and cash equivalents in our consolidated balance sheets:

As of December 31,

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Total $ 2,847.6 $ 1,632.2

The carrying values of our commercial paper, including accrued interest, overnight reverse repurchase agreements, money market funds and our short-term debt securities approximate fair value due to their short-term maturities.

The carrying values of our commercial paper, including accrued interest, overnight reverse repurchase agreements, money market funds and short-term debt securities approximate fair value due to their short-term maturities.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Our marketable equity securities gains (losses) are recorded in other (income) expense, net in our consolidated statements of income.

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Marketable equity securities, current $ 1,133.8 $ — $ ( 342.7 ) $ 791.1

Marketable equity securities, non-current 1,133.1 151.0 ( 279.4 ) 1,004.7

Total marketable equity securities $ 1,133.8 $ — $ ( 342.7 ) $ 791.1

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2021

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Total marketable equity securities $ 1,167.0 $ 160.9 $ ( 279.4 ) $ 1,048.5

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Summary of Contractual Maturities:

Available-for-Sale Debt Securities

The estimated fair value and amortized cost of our marketable debt securities available-for-sale by contractual maturity are summarized as follows:

As of December 31, 2021 As of December 31, 2020

The estimated fair value and amortized cost of our marketable debt securities classified as available-for-sale by contractual maturity are summarized as follows:

As of December 31,

(In millions) Estimated

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Total marketable debt securities $ 2,179.2 $ 2,199.1 $ 2,433.1 $ 2,435.9

The average maturity of our marketable debt securities available-for-sale as of December 31, 2021 and 2020, was approximately 10 months and 11 months, respectively.

The average maturity of our marketable debt securities classified as available-for-sale as of December 31, 2022 and 2021, was approximately 8 months and 10 months, respectively.

Proceeds from Marketable Debt Securities

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Strategic Investments

As of December 31, 2021 and 2020, our strategic investment portfolio was comprised of investments totaling $ 1,110.3 million and $ 2,024.6 million, respectively, which are included in other current assets and investments and other assets in our consolidated balance sheets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2022, our strategic investment portfolio comprised of investments totaling $ 846.0 million which are included in investments and other assets in our consolidated balance sheets.

As of December 31, 2021, our strategic investment portfolio comprised of investments totaling $ 1,110.3 million, which are included in other current assets and investments and other assets in our consolidated balance sheets.

Our strategic investment portfolio includes investments in equity securities of certain biotechnology companies, which are reflected within our disclosures included in Note 8, Fair Value Measurements , to these consolidated financial statements, venture capital funds where the underlying investments are in equity securities of certain biotechnology companies and non-marketable equity securities.

The decrease in our strategic investment portfolio for the year ended December 31, 2021, was primarily due to decreases in the fair value of our investments in Denali, Ionis Pharmaceuticals, Inc.

(Ionis), Sage and Sangamo common stock.

Sage Therapeutics, Inc.

In November 2020 we entered into a global collaboration and license agreement with Sage.

In connection with the closing of this transaction in December 2020 we purchased $ 650.0 million of Sage common stock, or approximately 6.2 million shares at approximately $ 104.14 per share, which are subject to transfer restrictions.

This investment is classified as a Level 2 marketable equity security due to certain holding period restrictions and is remeasured each reporting period and carried at fair value.

The effects of certain holding period restrictions on the investment are estimated using an option pricing valuation model.

The most significant assumptions within the model are the term of the restrictions and the stock price volatility, which is based upon historical volatility of similar companies.

We also use a constant maturity risk free-interest rate to match the remaining term of the restrictions on our investment in Sage's common stock and a dividend yield of zero based upon the fact that Sage and similar companies generally have not historically granted cash dividends.

For additional information on our collaboration arrangement with Sage, please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

Denali Therapeutics Inc.

In August 2020 we entered into a collaboration and license agreement with Denali.

As part of this collaboration we purchased $ 465.0 million of Denali common stock in September 2020, or approximately 13 million shares at approximately $ 34.94 per share, which are subject to transfer restrictions.

This investment is classified as a Level 2 marketable equity security due to certain holding period restrictions and is remeasured each reporting period and carried at fair value.

The effects of certain holding period restrictions on the investment are estimated using an option pricing valuation model.

The most significant assumptions within the model are the term of the restrictions and the stock price volatility, which is based upon historical volatility of similar companies.

We also use a constant maturity risk free-interest rate to match the remaining term of the restrictions on our investment in Denali's common stock and a dividend yield of zero based upon the fact that Denali and similar companies generally have not historically granted cash dividends.

For additional information on our collaboration agreement with Denali, please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

Sangamo Therapeutics, Inc.

In February 2020 we entered into a collaboration and license agreement with Sangamo.

In connection with the closing of this transaction in April 2020 we purchased $ 225.0 million of Sangamo common stock, or approximately 24 million shares at approximately $ 9.21 per share, of which approximately 12 million shares remain subject to transfer restrictions as of December 31, 2021.

This equity method investment will be remeasured each reporting period and carried at fair value due to our election of the fair value option.

The effects of certain holding period restrictions on the investment are estimated using an option pricing valuation model.

The most significant assumptions within the model are the term of the restrictions and the stock price volatility, which is based upon historical volatility of similar companies.

We also use a constant maturity risk free-interest rate to match the remaining term of the restrictions on our investment in Sangamo's common stock and a dividend yield of zero based upon the fact that Sangamo and similar companies generally have not historically granted cash dividends.

For additional information on our collaboration agreement with Sangamo, please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

Samsung Bioepis

In June 2018 we exercised our option under our joint venture agreement with Samsung BioLogics to increase our ownership percentage in Samsung Bioepis from approximately 5.0 % to approximately 49.9 %.

The share purchase transaction was completed in November 2018 and, upon closing, we paid 759.5 billion South Korean won ($ 676.6 million) to Samsung BioLogics.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2021 and 2020, the carrying value of our equity method investment in Samsung Bioepis totaled 713.3 billion South Korean won ($ 599.9 million) and 673.8 billion South Korean won ($ 620.2 million), respectively, which is classified as a component of investments and other assets within our consolidated balance sheets.

For additional information on our collaboration arrangements with Samsung Bioepis, please read Note 18, Collaborative and Other Relationships , to these consolidated financial statements.

The decrease in our strategic investment portfolio for the year ended December 31, 2022, was primarily due to a decrease in the fair value of our investments in Denali and Sangamo common stock.

For additional information on our investments in Denali, Sangamo, Sage and Ionis common stock, please read Note 19, Collaborative and Other Relationships , to these consolidated financial statements.

Derivative Instruments

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dollars is therefore subject to changes in foreign currency exchange rates.

In order to mitigate these changes, we use foreign currency forward contracts to lock in exchange rates associated with a portion of our forecasted international revenue and operating expense.

Foreign currency forward contracts in effect as of December 31, 2021 and 2020, had durations of 1 to 15 months and 1 to 24 months, respectively.

These contracts have been designated as cash flow hedges and unrealized gains or losses on the portion of these foreign currency forward contracts that are included in the effectiveness test are reported in accumulated other comprehensive income (loss) (referred to as AOCI in the table below).

We enter into foreign currency forward contracts and foreign currency options with financial institutions with the primary objective to mitigate the impact of foreign currency exchange rate fluctuations on our international revenue and operating expense.

Foreign currency forward contracts and foreign currency options in effect as of December 31, 2022 and 2021, had durations of 1 to 12 months and 1 to 15 months, respectively.

These contracts have been designated as cash

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

flow hedges and unrealized gains and losses on the portion of these foreign currency forward contracts and foreign currency options that are included in the effectiveness test are reported in accumulated other comprehensive income (loss) (referred to as AOCI in the table below).

Realized gains and losses of such contracts 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 accumulated other comprehensive income (loss) and fair value changes of excluded portions in the same line item in our consolidated statements of income that has been impacted by the hedged item.

The notional value of foreign currency forward contracts that were entered into to hedge forecasted revenue and operating expense is summarized as follows:

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

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Total foreign currency forward contracts $ 1,715.5 $ 2,126.8

The pre-tax portion of the fair value of these foreign currency forward contracts that were included in accumulated other comprehensive income (loss) in total equity is summarized as follows:

The pre-tax portion of the fair value of these foreign currency forward contracts and foreign currency options that were included in accumulated other comprehensive income (loss) in total equity is summarized as follows:

For the Years Ended December 31,

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Net unrealized gains (losses) $ 8.6 $ 53.8 $ ( 212.5 )

We expect the net unrealized gains of $ 53.8 million to be settled over the next 15 months, of which $ 48.2 million of these unrealized gains are expected to be settled over the next 12 months, with any amounts in accumulated other comprehensive income (loss) to be reported as an adjustment to revenue or operating expense.

We expect the net unrealized gains of approximately $ 8.6 million to be settled over the next 12 months, with any amounts in accumulated other comprehensive income (loss) 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.

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The following table summarizes the effect of foreign currency forward contracts designated as hedging instruments in our consolidated statements of income:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the Years Ended December 31,

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In May 2020 we settled our interest rate swap contracts, in conjunction with our early redemption of our 2.90 % Senior Notes, resulting in a gain of approximately $ 3.3 million, which was recorded as a component of interest expense in our consolidated statements of income during the year ended December 31, 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net Investment Hedges - Hedging Instruments

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The share purchase transaction was completed in November 2018 and, upon closing, we paid 759.5 billion South Korean won ($ 676.6 million) to Samsung BioLogics.

Our investment in the equity of Samsung Bioepis is exposed to the currency fluctuations in the South Korean won.

Our investment in the equity of Samsung Bioepis related to this transaction was exposed to the currency fluctuations in the South Korean won.

In order to mitigate these currency fluctuations between the U.S.

dollar and South Korean won, we have entered into foreign currency forward contracts.

Foreign currency forward contracts in effect as of December 31, 2021, had remaining durations of 10 months.

These contracts have been designated as net investment hedges.

We recognize changes in the spot exchange rate in accumulated other comprehensive income (loss).

The pre-tax portion of the fair value of these foreign currency forward contracts that were included in accumulated other comprehensive income (loss) in total equity reflected net gains of $ 10.6 million and net losses of $ 21.2 million as of December 31, 2021 and 2020, respectively.

We exclude fair value changes related to the forward rate from our hedging relationship and will amortize the forward points in other income (expense), net in our consolidated statements of income over the term of the contract.

The pre-tax portion of the fair value of the forward points that were included in accumulated other comprehensive income (loss) in total equity reflected net losses of $ 3.6 million and net gains of $ 0.2 million as of December 31, 2021 and 2020, respectively.

dollar and South Korean won, we entered into foreign currency forward contracts.

These contracts were designated as net investment hedges.

In April 2022 we completed the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics and closed these foreign currency forward contracts.

Upon completing this sale, the cumulative gains on our net investment hedges of $ 57.0 million were reclassified from accumulated other comprehensive income (loss) and reflected within the total pre-tax gain recognized from the sale, which was recorded in other (income) expense, net in our consolidated statements of income.

For additional information on the sale of our equity interest in Samsung Bioepis please read Note 3, Dispositions , to these consolidated financial statements.

Prior to the sale of our 49.9 % equity interest in Samsung Bioepis, we recognized changes in the spot exchange rate of these foreign currency forward contracts in accumulated other comprehensive income (loss).

We excluded fair value changes related to the forward rate from our hedging relationship and amortized the forward points in other (income) expense, net in our consolidated statements of income over the term of the contract.

The following table summarizes the effect of our net investment hedges in our consolidated financial statements:

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Location 2022 2021 2020 Location 2022 2021 2020 Location 2022 2021 2020

Gains (losses) on net investment hedge $ 46.0 $ ( 35.1 ) $ 25.3 Gains (losses) on net investment hedge $ ( 3.2 ) $ 4.5 $ 3.3 Other income (expense) $ ( 0.6 ) $ 2.9 $ 7.0

Gains (losses) on net investment hedge (1)

$ 20.4 $ 46.0 $ ( 35.1 ) Gains (losses) on net investment hedge (1)

$ ( 3.2 ) $ ( 3.2 ) $ 4.5 Other (income) expense (1)

$ ( 4.6 ) $ ( 0.6 ) $ 2.9

(1) Beginning in the second quarter of 2022 we no longer held net investment hedges as they were closed with the sale of our 49.9 % equity interest in Samsung Bioepis in April 2022.

For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to these consolidated financial statements.

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

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We have not elected hedge accounting for these transactions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The aggregate notional amount of these outstanding foreign currency forward contracts was $ 1,238.8 million and $ 1,268.0 million as of December 31, 2022 and 2021, respectively.

Net losses of $ 43.3 million, net gains of $ 30.1 million and net losses of $ 5.9 million related to these contracts were recorded as a component of other income (expense), net for the years ended December 31, 2021, 2020 and 2019, respectively.

Net losses of $ 34.7 million, net losses of $ 43.3 million and net gains of $ 30.1 million related to these contracts were recorded as a component of other (income) expense, net for the years ended December 31, 2022, 2021 and 2020, respectively.

Summary of Derivative Instruments

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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Liability derivative instruments Accrued expense and other 18.4 6.6

Other long-term liabilities — 35.7

Net Investment Hedging Instruments:

Asset derivative instruments Other current assets — 4.1

Liability derivative instruments Accrued expense and other — 19.7

Other Derivative Instruments:

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Liability derivative instruments Accrued expense and other 7.6 4.2

(1) Beginning in the second quarter of 2022 we no longer held net investment hedges as they were closed with the sale of our 49.9 % equity interest in Samsung Bioepis in April 2022.

For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to these consolidated financial statements.

Property, Plant and Equipment

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In order to support our future growth and drug development pipeline, we are building a large-scale biologics manufacturing facility in Solothurn, Switzerland.

Upon completion, this facility will include 393,000 square feet

Upon completion, this facility will include 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, 2022 and 2021, we had approximately $ 711.1 million and $ 677.0 million, respectively, capitalized as construction in progress related to this facility.

In the second quarter of 2021 a portion of the facility received a Good Manufacturing Practice multi-product license from the Swiss Agency for Therapeutic Products, resulting in approximately $ 1.2 billion of fixed assets being placed in service during the second quarter of 2021.

Solothurn has been approved for the manufacture of ADUHELM and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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, 2021 and 2020, we had approximately $ 677.0 million and $ 1.8 billion, respectively, capitalized as construction in progress related to this facility.

In the second quarter of 2021, a portion of the facility received a Good Manufacturing Practice multi-product license from the Swiss Agency for Therapeutic Products, resulting in approximately $ 1.2 billion of fixed assets being placed in service during the second quarter of 2021.

LEQEMBI by the FDA.

We estimate the second manufacturing suite at the Solothurn facility will be operational by the end of 2023.

125 Broadway Building Sale

In September 2022 we completed the sale of our building and land parcel located at 125 Broadway for an aggregate sales price of approximately $ 603.0 million, which is inclusive of a $ 10.8 million tenant allowance.

This sale resulted in a pre-tax gain on sale of approximately $ 503.7 million, net of transaction costs, which is reflected within gain on sale of building in our consolidated statements of income for the year ended December 31, 2022.

This transaction included approximately $ 79.2 million of property, plant and equipment, net, which comprised of approximately $ 72.6 million for buildings, approximately $ 1.6 million for land and approximately $ 5.0 million for machinery and equipment.

We lease real estate, including laboratory and office space, and certain equipment.

Our leases have remaining lease terms ranging from less than one year to nine years .

Our leases have remaining lease terms ranging from less than one year to eight years .

Certain leases include one or more options to renew, exercised at our sole discretion, with renewal terms that can extend the lease term from one year to six years .

In addition, we sublease certain real estate to third parties.

Our sublease portfolio consists of operating leases, with remaining lease terms ranging from three years to seven years .

Our sublease portfolio consists of operating leases, with remaining lease terms ranging from two years to six years .

Our subleases do not include an option to renew as they are coterminous with our operating leases.

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Operating lease assets obtained in exchange for lease obligations 108.3 18.1 59.0

125 Broadway Building Sale and Leaseback Transaction

In connection with the sale of our building at 125 Broadway, we simultaneously leased back the building for a term of approximately 5.5 years, which resulted in the recognition of approximately $ 168.2 million in new lease liabilities and right-of-use assets recorded within our consolidated balance sheets as of December 31, 2022.

The sale and immediate leaseback of this building qualified for sale and leaseback treatment and is classified as an operating lease.

For additional information on the sale of our building, please read Note 11, Property, Plant and Equipment , to these consolidated financial statements.

300 Binney Street Lease Modification

In September 2022 we entered into an agreement to partially terminate a portion of our lease located at 300 Binney Street, Cambridge MA, as well as to reduce the lease term for the majority of the remaining space.

The agreement was driven by our 2022 efforts to reduce costs by consolidating real estate locations.

The transaction was treated as a lease modification as of the effective date and resulted in the derecognition of right of use assets of approximately $ 47.4 million and lease liabilities of approximately $ 52.7 million, which resulted in a gain of approximately $ 5.3 million, which was recorded within restructuring charges in our consolidated statements of income for the year ended December 31, 2022.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Our indebtedness is summarized as follows:

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4.050 % Senior Notes due September 15, 2025

$ 1,744.7 $ 1,742.9

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Non-current portion of notes payable $ 6,281.0 $ 6,274.0

(1) In February 2021 we completed our Exchange Offer of our tendered 2045 Senior Notes, whereby approximately $ 624.6 million of our 2045 Senior Notes were exchanged for approximately $ 700.7 million of our 2051 Senior Notes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Our 3.625 % Senior Notes due September 15, 2022, were redeemed in full in July 2022.

Exchange Offer

In February 2021 we completed our Exchange Offer of our tendered 2045 Senior Notes for our 2051 Senior Notes and cash, and an offer to purchase our tendered 2045 Senior Notes for cash.

In February 2021 we completed our private offer to exchange (Exchange Offer) our tendered 5.200 % Senior Notes due September 15, 2045 (2045 Senior Notes) for a new series of 3.250 % Senior Notes due February 15, 2051 (2051 Senior Notes) and cash, and an offer to purchase our tendered 2045 Senior Notes for cash.

An aggregate principal amount of approximately $ 624.6 million of our 2045 Senior Notes was exchanged for an aggregate principal amount of approximately $ 700.7 million of our 2051 Senior Notes and aggregate cash payments of approximately $ 151.8 million.

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We incurred approximately $ 6.1 million of costs associated with our Exchange Offer, which was recognized in interest expense in other (income) expense, net in our consolidated statements of income for the year ended December 31, 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2020 Senior Notes

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2015 Senior Notes

The following is a summary of our currently outstanding senior secured notes issued in 2015 (the 2015 Senior Notes), consisting of the following:

• $ 1.0 billion aggregate principal amount of 3.625 % Senior Notes due September 15, 2022, valued at 99.920 % of par;

The following is a summary of our currently outstanding senior unsecured notes issued in 2015 (the 2015 Senior Notes), consisting of the following:

• $ 1.75 billion aggregate principal amount of 4.05 % Senior Notes due September 15, 2025, valued at 99.764 % of par;

• $ 1.12 billion aggregate principal amount of 5.20 % Senior Notes due September 15, 2045, valued at 99.294 % of par.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The original costs associated with this offering of approximately $ 47.5 million have been recorded as a reduction to the carrying amount of the debt in our consolidated balance sheets.

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For additional information on our interest rate contracts, please read Note 10, Derivative Instruments, to these consolidated financial statements.

3.625% Senior Notes due September 15, 2022

On September 15, 2015, we issued $ 1.0 billion aggregate principal amount of our 3.625 % Senior Notes due September 15, 2022, at 99.920 % of par.

Our 3.625 % Senior Notes were senior unsecured obligations.

In July 2022 we redeemed our 3.625 % Senior Notes prior to their maturity and recognized a net pre-tax charge of approximately $ 2.4 million upon the extinguishment of these Senior Notes, which primarily reflects the payment of an early call premium as well as the write-off of remaining unamortized original debt issuance costs and discount balances.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

These charges were recognized as interest expense in other (income) expense, net in our consolidated statements of income for the year ended December 31, 2022.

2020 Credit Facility

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(In millions) As of December 31, 2022

2022 $ 1,000.0

2028 and thereafter 4,817.3

Total $ 7,567.3

Total debt $ 6,567.3

debt discount and issuance fees ( 286.3 )

Total long-term debt $ 6,281.0

The fair value of our debt is disclosed in Note 8, Fair Value Measurements, to these consolidated financial statements.

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No shares of Preferred Stock were issued and outstanding during 2022, 2021 and 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table describes the number of shares authorized, issued and outstanding of our common stock as of December 31, 2022, 2021 and 2020:

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Our 2020 Share Repurchase Program does not have an expiration date.

All share repurchases under our 2020 Share Repurchase Program will be retired.

Under our 2020 Share Repurchase Program, we repurchased and retired approximately 6.0 million and 1.6 million shares of our common stock at a cost of approximately $ 1.8 billion and $ 400.0 million during the years ended December 31, 2021 and 2020, respectively.

All share repurchases under our 2020 Share Repurc hase Program will be retired.

Under our 2020 Share Repurchase Program, we repurchased and retired approximately 3.6 million, 6.0 million and 1.6 million shares of our common stock at a cost of approximately $ 750.0 million, $ 1.8 billion and $ 400.0 million during the years ended December

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

31, 2022, 2021 and 2020 , respectively.

Approximately $ 2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2022.

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All shares repurchased under our March 2019 Share Repurchase Program were retired.

Under our March 2019 Share Repurchase Program, we repurchased and retired approximately 4.1 million and 14.7 million shares of our common stock at a cost of approximately $ 1.3 billion and $ 3.7 billion during the years ended December 31, 2020 and 2019, respectively.

In August 2018 our Board of Directors authorized a program to repurchase up to $ 3.5 billion of our common stock (2018 Share Repurchase Program), which was completed as of June 30, 2019.

All share repurchases under our 2018 Share Repurchase Program were retired.

Under our 2018 Share Repurchase Program, we repurchased and retired approximately 8.9 million shares of our common stock at a cost of approximately $ 2.1 billion during the year ended December 31, 2019.

Under our March 2019 Share Repurchase Program, we repurchased and retired approximately 4.1 million shares of our common stock at a cost of approximately $ 1.3 billion during the year ended December 31, 2020.

In August 2022 the Inflation Reduction Act of 2022 (the IRA) was signed into law.

Among other things, the IRA levies a 1.0% excise tax on net stock repurchases after December 31, 2022.

Historically, we have made discretionary share repurchases.

Amounts paid to repurchase shares in excess of their par value are allocated between additional paid-in capital and retained earnings, with payments in excess of our additional paid-in-capital balance recorded as a reduction to retained earnings.

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December 31, 2022

(In millions) Unrealized Gains (Losses) on Securities Available for Sale, Net of Tax Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax Gains (Losses) on Net Investment Hedge, Net of Tax Unfunded Status of Postretirement Benefit Plans, Net of Tax Currency Translation Adjustments Total

(In millions) Unrealized Gains (Losses) on Securities Available for Sale, Net of Tax Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax Gains (Losses) on Net Investment Hedges, Net of Tax (1)

Unrealized Gains (Losses) on Pension Benefit Obligation, Net of Tax Currency Translation Adjustments Total

Balance, December 31, 2021 $ ( 2.2 ) $ 53.8 $ 25.5 $ ( 44.8 ) $ ( 139.0 ) $ ( 106.7 )

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Balance, December 31, 2022 $ ( 15.7 ) $ 15.1 $ — $ ( 1.1 ) $ ( 163.2 ) $ ( 164.9 )

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Beginning in the second quarter of 2022 we no longer held net investment hedges as they were closed with the sale of our 49.9 % equity interest in Samsung Bioepis in April 2022.

For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to these consolidated financial statements.

December 31, 2021

(In millions) Unrealized Gains (Losses) on Securities Available for Sale, Net of Tax Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax Gains (Losses) on Net Investment Hedges, Net of Tax Unrealized Gains (Losses) on Pension Benefit Obligation, Net of Tax Currency Translation Adjustments Total

Balance, December 31, 2020 $ 1.4 $ ( 179.0 ) $ ( 8.5 ) $ ( 66.3 ) $ ( 46.6 ) $ ( 299.0 )

3 unchanged sentences

Balance, December 31, 2021 $ ( 2.2 ) $ 53.8 $ 25.5 $ ( 44.8 ) $ ( 139.0 ) $ ( 106.7 )

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2020

(In millions) Unrealized Gains (Losses) on Securities Available for Sale, Net of Tax Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax Gains (Losses) on Net Investment Hedges, Net of Tax Unrealized Gains (Losses) on Pension Benefit Obligation, Net of Tax Currency Translation Adjustments Total

Balance, December 31, 2019 $ 4.2 $ 7.8 $ 25.1 $ ( 32.8 ) $ ( 139.5 ) $ ( 135.2 )

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The following table summarizes the amounts reclassified from accumulated other comprehensive income (loss):

(In millions) Income Statement Location Amounts Reclassified from

Accumulated Other Comprehensive Income (Loss)

(In millions) Amounts Reclassified from

Accumulated Other Comprehensive Income (Loss) Income Statement Location

For the Years Ended December 31,

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( 19.8 ) 6.0 ( 0.1 ) Income tax (benefit) expense

Gains (losses) on net investment hedge Other income (expense) ( 0.6 ) 2.9 7.0

Gains (losses) on net investment hedges (1)

38.1 ( 0.6 ) 2.9 Other (income) expense

Currency Translation Adjustments ( 58.9 ) — — Other (income) expense

Total reclassifications, net of tax $ 145.2 $ ( 58.2 ) $ 18.2

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Beginning in the second quarter of 2022 we no longer held net investment hedges as they were closed with the sale of our 49.9 % equity interest in Samsung Bioepis in April 2022.

For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to these consolidated financial statements.

Earnings per Share

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Amounts excluded from the calculation of net income per diluted share because their effects were anti-dilutive were insignificant.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Earnings per share for the years ended December 31, 2022, 2021 and 2020, reflects the repurchase of approximately 3.6 million shares, 6.0 million shares and 22.4 million shares of our common stock, respectively, under our share repurchase programs.

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$ 215.1 $ 204.1 $ 171.6

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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Employee stock purchase plan 12.7 17.3 13.5

NST stock options — — 26.2

Stock options 0.3 — —

Subtotal 273.6 258.8 211.3

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In May 2006 our shareholders approved the 2006 Directors Plan for share-based awards to our directors.

Awards granted from the 2006 Directors Plan may include stock options, shares of restricted stock, RSUs, 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 2006 Directors Plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

a committee of our Board of Directors, subject to the provisions of the 2006 Directors Plan.

We have reserved a total of 1.6 million shares of common stock for issuance under the 2006 Directors Plan.

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We have not made any awards pursuant to the 2008 Omnibus Equity Plan since our shareholders approved the 2017 Omnibus Equity Plan, and do not intend to make any awards pursuant to the 2008 Omnibus Equity Plan in the future, except that unused shares under the 2008 Omnibus Equity Plan have been carried over for use under the 2017 Omnibus Equity Plan.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stock Options

We currently do not grant stock options to our employees or directors.

Outstanding stock options previously granted to our employees and directors generally have a 10-year term and vest over a period of between one and four years , provided the individual continues to serve at Biogen through the vesting dates.

Options granted under all plans are exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant.

All outstanding options were exercised as of December 31, 2020.

The total intrinsic values of options exercised in 2020 and 2019 totaled $ 2.9 million and $ 4.2 million, respectively.

The following table summarizes the amount of tax benefit realized for stock options and cash received from the exercise of stock options:

For the Years Ended December 31,

During the year ended December 31, 2022, we granted approximately 81,000 stock options to our Chief Executive Officer (CEO) (2022 CEO Grant) under the 2017 Omnibus Plan with a grant date fair value of $ 139.10 per option for a total of approximately $ 11.2 million.

The fair values of our stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model.

The estimated fair values of the stock options are then expensed over the options' vesting periods.

The 2022 CEO Grant is eligible to vest in equal annual installments over a three-year period from the grant date, subject to the CEO’s continued employment.

The outstanding stock options have a 10-year term and are exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant.

The total intrinsic value related to the remaining stock options previously granted in 2010 that were exercised in 2020 totaled $ 2.9 million.

The following table summarizes the amount of tax benefit realized for stock options and cash received from the exercise of the remaining stock options previously granted in 2010:

For the year ended December 31,

(In millions) 2020

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The number of MSUs earned is calculated at each annual anniversary from the date of grant over the respective vesting periods, resulting in multiple performance periods.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accordingly, additional MSUs may be issued or currently outstanding MSUs may be cancelled upon final determination of the number of awards earned.

Beginning in 2022 we no longer grant MSUs as part of our long term incentive program and have replaced with granting performance-vested RSUs.

The following table summarizes our MSU activity:

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Unvested at December 31, 2021 257,000 $ 372.08

151,000 358.77

Vested ( 87,000 ) 369.22

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Unvested at December 31, 2022 113,000 $ 366.52

(1) MSUs granted during 2021 include awards granted in conjunction with our annual awards made in February 2021 and MSUs granted in conjunction with the hiring of employees.

These grants reflect the target number of shares eligible to be earned at the time of grant.

MSUs granted in 2021 also reflect an adjustment based upon the final performance multiplier in relation to shares granted in 2020, 2019 and 2018.

We value grants of MSUs using a lattice model with a Monte Carlo simulation.

This valuation methodology utilizes several key assumptions, the 30 calendar day average closing stock price on the date of grant for MSUs, expected volatility of our stock price, risk-free rates of return and expected dividend yield.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The assumptions used in our valuation are summarized as follows:

For the Years Ended December 31,

2021 2020 2019

Expected dividend yield — % — %

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37.8 % - 44.1 %

31.2 % - 33.6 %

Range of risk-free interest rates 0.06 % - 0.21 %

1.41 % - 1.48 %

2.46 % - 2.53 %

30 calendar day average stock price on grant date $ 262.23 - $ 360.31

$ 257.83 - $ 325.40

$ 228.59 - $ 331.18

Weighted-average per share grant date fair value $ 358.77

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All remaining CSPUs were fully vested as of December 31, 2020.

The cash paid in settlement of CSPUs vested in 2020 and 2019 totaled $ 3.8 million and $ 10.6 million, respectively.

The cash paid in settlement of CSPUs vested in 2020 totaled $ 3.8 million.

Performance-vested Restricted Stock Units (PUs)

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Accordingly, additional PUs may be issued or currently outstanding PUs may be cancelled upon final determination of the number of units earned.

PUs settling in cash are based on the 30 calendar day average closing stock price through each vesting date once the actual vested and earned number of units is known.

PUs settling in cash are based on the 30 calendar

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

day average closing stock price through each vesting date once the actual vested and earned number of units is known.

All remaining PUs were fully vested as of December 31, 2020.

All PUs that vested in 2020 and 2019 were settled in cash totaling $ 3.4 million and $ 10.4 million, respectively.

All PUs that vested in 2020 were settled in cash totaling $ 3.4 million.

Performance Stock Units (PSUs)

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Accordingly, additional PSUs may be issued or currently outstanding PSUs may be cancelled upon final determination of the number of units earned.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Beginning in 2022 we no longer grant MSUs as part of long term incentive program and have replaced with granting PSUs with a performance metric based on a three-year cumulative relative total shareholder return (rTSR) metric.

The PSUs will vest on the third anniversary of the date of grant, with the number of PSUs earned based on this cumulative rTSR metric.

The following table summarizes our PSUs that settle in stock activity:

Shares Weighted

December 31, 2022

Shares Weighted Average

Grant Date Fair Value

Unvested at December 31, 2021 196,000 $ 289.94

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These grants reflect the target number of shares eligible to be earned at the time of grant.

We value grants of PSUs using a lattice model with a Monte Carlo simulation.

This valuation methodology utilizes several key assumptions, the 30 calendar day average closing stock price on the date of grant for PSUs, expected volatility of our stock price, risk-free rates of return and expected dividend yield.

The assumptions used in our valuation are summarized as follows:

December 31, 2022

Expected dividend yield — %

Range of expected stock price volatility 44.0 % - 45.9 %

Range of risk-free interest rates 1.8 % - 3.9 %

30 calendar day average stock price on grant date $ 231.31 - $ 294.86

Weighted-average per share grant date fair value $ 294.43

The fair values of PSUs settled in stock that vested in 2022 and 2021 totaled $ 9.5 million and $ 15.5 million, respectively

PSUs Settled in Cash

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The vesting of these awards is subject to the respective employee’s continued employment.

The number of PSUs granted represents the target number of units that are eligible to be earned based on the achievement of three annual performance measures established when the performance objectives are defined, which will be at the beginning of each year and will end on December 31 of such year.

The number of PSUs granted represents the target number of units that are eligible to be earned based on the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

achievement of three annual performance measures established when the performance objectives are defined, which will be at the beginning of each year and will end on December 31 of such year.

Participants may ultimately earn between zero and 200.0 % of the target number of PSUs granted based on the degree of achievement of the applicable performance metric.

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Since no shares are issued, these awards do not dilute equity.

Beginning in 2022 we no longer grant this type of PSUs as part of our long term incentive program and have replaced with granting time-vested RSUs.

The following table summarizes our PSUs that settle in cash activity:

December 31, 2022

Unvested at December 31, 2021 134,000

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These grants reflect the target number of shares eligible to be earned at the time of grant.

The fair values of PSUs settled in cash that vested in 2022 and 2021 totaled $ 11.0 million and $ 9.9 million, respectively.

Time-Vested Restricted Stock Units (RSUs)

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Shares of our common stock will be delivered to the director upon vesting and are not subject to any withholding taxes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes our RSU activity:

Shares Weighted Average

Grant Date Fair Value

Unvested at December 31, 2021 1,202,000 $ 291.54

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The fair values of RSUs vested in 2022, 2021 and 2020 totaled $ 116.3 million, $ 132.2 million and $ 140.5 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Employee Stock Purchase Plan (ESPP)

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(In millions) 2022 2021 2020

Income before income taxes (benefit):

Income before income tax (benefit) expense:

Domestic $ 1,842.0 $ 448.3 $ 3,290.0

Foreign 1,749.8 1,296.9 1,757.5

Total $ 1,745.2 $ 5,047.5 $ 7,125.9

Income tax expense (benefit):

Total income before income tax (benefit) expense $ 3,591.8 $ 1,745.2 $ 5,047.5

Income tax (benefit) expense:

Federal $ 694.5 $ 319.1 $ 647.0

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Foreign 67.9 137.1 155.1

Total 479.3 843.3 1,090.9

Total current 801.4 479.3 843.3

Federal ( 328.3 ) ( 242.5 ) ( 1,749.9 )

1 unchanged sentence

Foreign 157.2 ( 172.4 ) 1,905.7

Total ( 426.8 ) 149.0 67.1

Total income tax expense $ 52.5 $ 992.3 $ 1,158.0

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Total deferred ( 168.6 ) ( 426.8 ) 149.0

Total income tax (benefit) expense $ 632.8 $ 52.5 $ 992.3

Transition Toll Tax

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and therefore recorded deferred tax liabilities associated with an estimate of the total withholding taxes expected as a result of our repatriation of earnings.

Other than for earnings, we are permanently reinvested for book/tax basis differences of approximately $ 1.5 billion as of December 31, 2021, primarily arising through the impacts of purchase accounting.

Other than for earnings, we are permanently reinvested for book/tax basis differences of approximately $ 1.5 billion as of December 31, 2022, primarily arising through the impacts of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

purchase accounting.

These permanently reinvested basis differences could reverse through sales of the foreign subsidiaries, as well as various other events, none of which were considered probable as of December 31, 2022.

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tax liability, if these differences reverse, would be between $ 300.0 million and $ 400.0 million as of December 31, 2022.

federal courts in West Virginia and Delaware entered judgments in favor of the defendants in patent infringement proceedings relating to TECFIDERA Orange-Book listed patents.

We appealed both decisions.

In late 2021 the U.S.

Court of Appeals for the Federal Circuit (Federal Circuit) affirmed the judgment of the West Virginia federal court.

The appeals in the Delaware cases were stayed and we expect will remain so until the decision in the West Virginia case becomes final.

For additional information, please read Note 20, Litigation , to these consolidated financial statements.

Multiple TECFIDERA generic entrants are now in the U.S.

market and have deeply discounted prices compared to TECFIDERA.

The generic competition for TECFIDERA has significantly reduced our TECFIDERA revenue and is expected to continue to have a substantial and increasing negative impact on our U.S.

TECFIDERA revenue in the future.

Multiple TECFIDERA generic entrants are now in North America, Brazil and certain E.U.

countries and have deeply discounted prices compared to TECFIDERA.

The generic competition for TECFIDERA has significantly reduced our TECFIDERA revenue and we expect that TECFIDERA revenue will continue to decline in the future.

As of December 31, 2020, we assessed the realizability of our deferred tax assets that are dependent on future expected sales of TECFIDERA in the U.S.

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For the year ended December 31, 2020, the income tax expense associated with these reductions was approximately $ 90.3 million.

We continue to assess the realizability of these deferred tax assets and have recorded an increase in these deferred tax assets of approximately $ 108.5 million and an increase in these deferred tax liabilities of approximately $ 103.9 million for the year ended December 31, 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We continue to assess the realizability of these deferred tax assets.

For the years ended December 31, 2022 and 2021, we recorded increases in these deferred tax assets of approximately $ 17.4 million and $ 108.5 million, respectively, and increases in these deferred tax liabilities of approximately $ 16.7 million and $ 103.9 million, respectively.

Deferred Tax Assets and Liabilities

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Neurimmune's tax basis in ADUHELM 470.3 475.8

IRC Section 174 capitalized research and development 271.8 —

Net operating loss 1,845.9 1,973.0

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Purchased intangible assets $ ( 76.1 ) $ ( 256.6 )

Samsung Bioepis investment installments ( 138.0 ) —

GILTI ( 1,002.0 ) ( 1,037.6 )

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As of December 31, 2022 and 2021, the total deferred charges were $ 56.6 million and $ 39.6 million, respectively.

As of December 31, 2021 and 2020, the carrying value of our investment in Samsung Bioepis totaled 713.3 billion South Korean won ($ 599.9 million) and 673.8 billion South Korean won ($ 620.2 million), respectively, which is classified as a component of investments and other assets within our consolidated balance sheets.

As of December 31, 2021, we have not recorded deferred taxes related to this investment as it is not apparent that the basis difference will reverse in the foreseeable future.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Inflation Reduction Act

In August 2022 the IRA was signed into law in the U.S.

The IRA introduced new tax provisions, including a 15.0% corporate alternative minimum tax and a 1.0% excise tax on stock repurchases.

The provisions of the IRA will be effective for periods after December 31, 2022.

The enactment of the IRA did not result in any material adjustments to our income tax provision or net deferred tax assets as of December 31, 2022.

A reconciliation between the U.S.

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Purchased intangible assets 0.3 ( 1.6 ) 0.7

Divestiture of Denmark manufacturing operations — ( 0.4 ) 1.0

Internal reorganization of certain intellectual property rights — — ( 2.1 )

TECFIDERA impairment — — 1.8

GILTI 0.7 1.3 1.3

Swiss tax reform — — ( 0.8 )

Sale of Samsung Bioepis ( 1.6 ) — —

Litigation settlement agreement 2.6 — —

Neurimmune tax impacts 2.3 ( 5.3 ) ( 0.1 )

Internal reorganization ( 1.4 ) — —

Other ( 0.8 ) 1.1 ( 1.2 )

1 unchanged sentence

Changes in Tax Rate

For the year ended December 31, 2022, compared to 2021, the increase in our effective tax rate, excluding the impact of the net Neurimmune deferred tax asset, as discussed below, includes the tax impacts of the litigation settlement agreement and the sale of our building at 125 Broadway.

These increases were partially offset by the impact of the current year tax benefits related to an international reorganization to align with global tax developments, the impacts of the sale of our equity interest in Samsung Bioepis and the tax impacts of the decision to discontinue development of vixotrigine.

Further in 2021, our effective tax rate benefited from the tax effects of the BIIB111 and BIIB112 impairment charges and the non-cash tax effects of changes in the value of our equity instruments.

For the year ended December 31, 2021, compared to 2020, the decrease in our effective tax rate, excluding the impact of the Neurimmune deferred tax asset, as discussed below, was primarily due to the change in the territorial mix of our profitability, which included the adverse effect of generic competition for TECFIDERA in the U.S.

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Our 2020 effective tax rate also reflected an income tax expense related to the establishment of a valuation allowance against certain deferred tax assets, the realization of which is dependent on future sales of TECFIDERA in the U.S.

In addition, for the year ended December 31, 2021, compared to 2020, the decrease in our effective tax rate was significantly impacted by a current year deferred tax benefit in Switzerland resulting from the accelerated approval of ADUHELM by the FDA in the U.S., recognized during the second quarter of 2021.

We recorded a net deferred tax asset of approximately $ 490.0 million during the second quarter of 2021.

The net deferred tax asset is comprised of approximately $ 945.0 million of gross deferred tax asset, reduced by approximately $ 455.0 million of unrecognized tax benefit, as discussed below.

During the fourth quarter of 2021 we recorded a valuation allowance of approximately $ 390.0 million related to this deferred tax asset.

The deferred tax benefit relates to Neurimmune's tax basis in ADUHELM, the realization of which is dependent on future sales of ADUHELM and approval of the Swiss cantonal tax authorities, with an equal and offsetting amount assigned to net income (loss) attributable to noncontrolling interests, net of tax in our consolidated statements of income, resulting in a zero net impact to net income attributable to Biogen Inc.

For additional information on our collaboration arrangement with Neurimmune, please read Note 19, Investments in Variable Interest Entities , to these consolidated financial statements.

For the year ended December 31, 2020, compared to 2019, the increase in our effective tax rate was primarily due to the income tax expense related to the establishment of a valuation allowance against certain deferred tax assets, the realization of which is dependent on future sales of TECFIDERA in the U.S., as discussed above, and partially offset by the benefit recognized on the effective settlement of certain tax matters.

Additionally, our 2019 effective tax rate benefited from an internal reorganization of certain intellectual property rights and the enactment of a new taxing regime in the country and certain cantons of Switzerland, which we refer to as Swiss Tax Reform, partially offset by tax expense related to the divestiture of our Hillerød, Denmark manufacturing operations.

Although we recognized a loss on the divestiture of our Hillerød, Denmark manufacturing operations, the divestiture required us to write-off certain deferred tax assets and resulted in a taxable gain in certain jurisdictions.

For additional information on the divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures , to these consolidated financial statements.

For additional information on the litigation settlement agreement, please read Note 18, Other Consolidated Financial Statement Detail , to these consolidated financial statements.

Neurimmune Deferred Tax Asset

During 2021 we recorded a net deferred tax asset in Switzerland of approximately $ 100.0 million on Neurimmune's tax basis in ADUHELM, the realization of which was dependent on future sales of ADUHELM.

During the first quarter of 2022, upon issuance of the final NCD related to ADUHELM, we recorded an increase in a valuation allowance of approximately $ 85.0 million to reduce the net value of this deferred tax asset to zero.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

These adjustments to our net deferred tax asset are each recorded with an equal and offsetting amount assigned to net income (loss) attributable to noncontrolling interests, net of tax in our consolidated statements of income, resulting in a zero net impact to net income attributable to Biogen Inc.

For additional information on our collaboration arrangement with Neurimmune, please read Note 20, Investments in Variable Interest Entities , to these consolidated financial statements.

Tax Attributes

As of December 31, 2021, we had net operating losses and general business credit carry forwards for U.S.

federal income tax purposes of approximately $ 0.6 million and $ 4.8 million, respectively, which begin to expire in 2022 and 2027, respectively.

state income tax purposes, we had research and investment credit carry forwards of approximately $ 147.6 million that begin to expire in 2022.

For foreign income tax purposes, we had $ 16.7 billion of Swiss federal net operating loss carryforwards that begin to expire in 2025 and $ 16.2 billion of Swiss cantonal net operating loss carryforwards that begin to expire in 2025.

As of December 31, 2022, we had general business credit carry forwards for U.S.

federal income tax purposes of approximately $ 8.1 million, which begin to expire in 2027.

state income tax purposes, we had research and investment credit carry forwards of approximately $ 132.7 million that begin to expire in 2023 and net operating losses of approximately $ 24.8 million that begin to expire in 2036.

For foreign income tax purposes, we had $ 15.5 billion of federal net operating loss carryforwards that begin to expire in 2027 and $ 15.4 billion of Swiss cantonal net operating loss carryforwards that begin to expire in 2027.

In assessing the realizability of our deferred tax assets, we have considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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Ending balance $ 606.4 $ 563.4 $ 75.7

During the year ended December 31, 2021, we increased our gross unrecognized tax benefits by approximately $ 455.0 million, related to a deferred tax asset for Swiss tax purposes for Neurimmune's tax basis in ADUHELM, as discussed above.

This unrecognized tax benefit was recorded as a reduction to the gross deferred tax asset, resulting in the net deferred tax asset, as discussed above, and not as a separate liability on our consolidated balance sheets.

As of December 31, 2022, the unrecognized tax benefit related to Neurimmune was approximately $ 450.0 million, as a result of changes in exchange rates.

Our 2020 activity reflects the impact of the effective settlement of certain tax matters.

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Internal Revenue Service 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.

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Included in the balance of unrecognized tax benefits as of December 31, 2022, 2021 and 2020, are $ 134.0 million, $ 87.5 million and $ 68.8 million (net of the federal benefit on state issues), respectively, of unrecognized tax benefits that, if recognized, would affect the effective income tax rate in future periods.

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We have accrued $ 25.2 million and $ 24.8 million for the payment of interest and penalties as of December 31, 2022 and 2021, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

It is reasonably possible that we will adjust the value of our uncertain tax positions related to certain transfer pricing, collaboration matters 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 $ 500.0 million, including approximately $ 450.0 million related to the unrecognized tax benefits related to Neurimmune's tax basis in ADUHELM, as discussed above, in the next 12 months as a result of various audit closures, settlements and expiration of the statute of limitations.

Any changes to our gross unrecognized tax benefits related to Neurimmune's tax basis in ADUHELM would result in a zero net impact to net income attributable to Biogen, Inc., as we have recorded a full valuation allowance against the relevant deferred tax assets.

Other Consolidated Financial Statement Detail

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Income taxes 932.9 247.9 906.7

Non-cash Operating, Investing and Financing Activity

In the fourth quarter of 2018 we accrued $ 300.0 million upon reaching $ 20.0 billion in total cumulative sales of FUMADERM and TECFIDERA (together, the Fumapharm Products), which was paid in the first quarter of 2019.

These amounts, net of tax benefit, were accounted for as increases to goodwill in accordance with the accounting standard applicable to business combinations when we acquired Fumapharm AG.

Other (Income) Expense, Net

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(In millions) 2022 2021 2020

Gain on sale of equity interest in Samsung Bioepis (1)

$ ( 1,505.4 ) $ — $ —

Litigation settlement agreement and settlement fees 917.0 — —

Interest income ( 89.3 ) ( 11.0 ) ( 42.0 )

Interest expense 246.6 253.6 222.5

Gain (loss) on investments, net ( 824.9 ) 685.7 204.7

(Gains) losses on investments, net 277.3 824.9 ( 685.7 )

Foreign exchange (gains) losses, net 35.5 22.4 10.7

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Total other (income) expense, net $ ( 108.2 ) $ 1,095.5 $ ( 497.4 )

Gain (loss) 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 gain (loss) on investments, net that relates to our equity securities held as of December 31, 2021, 2020 and 2019:

(1) Reflects the pre-tax gain, net of transaction costs, recognized from the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics in April 2022.

For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to these consolidated financial statements.

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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the second quarter of 2022 we recorded a pre-tax charge of $ 900.0 million, plus settlement fees and expenses, related to a litigation settlement agreement to resolve a qui tam litigation relating to conduct prior to 2015.

This charge is included within other (income) expense, net in our consolidated statements of income for the year ended December 31, 2022.

The following table summarizes our (gains) losses on investments, net that relates to our equity securities held as of December 31, 2022, 2021 and 2020:

For the Years Ended December 31,

(In millions) 2022 2021 2020

Net gains (losses) recognized during the period on equity securities $ ( 821.1 ) $ 693.9 $ 200.1

Net gains (losses) realized during the period and on equity securities 10.3 12.1 50.0

Unrealized gains (losses) recognized during the period on equity securities $ ( 831.4 ) $ 681.8 $ 150.1

Net (gains) losses recognized on equity securities $ 264.7 $ 821.1 $ ( 693.9 )

Net (gains) losses realized on equity securities — ( 10.3 ) ( 12.1 )

Unrealized (gains) losses recognized on equity securities $ 264.7 $ 831.4 $ ( 681.8 )

The net unrealized losses recognized during the year ended December 31, 2022, primarily reflect a decrease in the aggregate fair value of our investments in Denali and Sangamo common stock of approximately $ 278.0 million.

The net unrealized losses recognized during the year ended December 31, 2021, primarily reflect decreases in the aggregate fair value of our investments in Denali, Sage, Sangamo and Ionis common stock of approximately $ 819.6 million.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accrued Expense and Other

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Revenue-related reserves for discounts and allowances $ 891.6 $ 802.1

Collaboration expense 324.7 389.9

Employee compensation and benefits 395.6 345.1

Collaboration expense 277.9 324.7

Royalties and licensing fees 209.4 234.7

Derivative liabilities 10.8 181.5

Current portion of contingent consideration obligations — 149.6

Other 746.9 828.6

Total accrued expense and other $ 2,521.4 $ 2,535.2

Other Long-term Liabilities

Other long-term liabilities were $ 944.2 million and $ 1,320.5 million as of December 31, 2022 and 2021, respectively, and included accrued income taxes totaling $ 541.7 million and $ 664.5 million, respectively.

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OCREVUS for the treatment of PPMS and RMS;

and other potential anti-CD20 therapies, including mosunetuzumab, pursuant to our collaboration arrangements with Genentech, a wholly-owned member of the Roche Group.

LUNSUMIO (mosunetuzumab), which was granted accelerated approval in the U.S.

during the fourth quarter of 2022 for the treatment of relapsed or refractory follicular lymphoma;

glofitamab, an investigational bispecific antibody for the potential treatment of non-Hodgkin's lymphoma;

and have the option to add other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, a wholly-owned member of the Roche Group.

For purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.

Our collaboration arrangements will continue in effect until we mutually agree to terminate the collaboration, except that if we undergo a change in control, as defined in our collaboration agreement, Genentech has the right to present an offer to buy the rights to RITUXAN and we must either accept Genentech’s offer or purchase Genentech’s rights on the same terms as its offer.

Genentech will also be deemed concurrently to have purchased our rights to OCREVUS and any other collaboration anti-CD20 products in development in exchange for a royalty as well as our rights to GAZYVA in exchange for the compensation described in the collaboration arrangement.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

If we undergo a change in control, as defined in our collaboration agreement, Genentech has the right to present an offer to buy the rights to RITUXAN and we must either accept Genentech’s offer or purchase Genentech’s rights on the same terms as its offer.

Genentech will also be deemed concurrently to have purchased our rights to the remaining products in the collaboration on the terms set forth below.

Our collaboration with Genentech was created through a contractual arrangement and not through a joint venture or other legal entity.

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We have co-exclusively licensed our rights to develop, commercialize and market RITUXAN in Canada.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Roche Group and its sub-licensees maintain sole responsibility for the development, manufacture and commercialization of GAZYVA in the U.S.

We recognize our share of the development and commercialization expense of GAZYVA as a reduction of our share of pre-tax profits in revenue from anti-CD20 therapeutic programs.

Commercialization of GAZYVA impacts our percentage of the co-promotion profits for RITUXAN, as summarized in the table below.

In March 2017 the FDA approved OCREVUS for the treatment of RMS and PPMS.

The level of gross sales of GAZYVA in the U.S.

could impact our percentage of the co-promotion profits for RITUXAN and LUNSUMIO, as summarized in the table below.

Pursuant to the terms of our collaboration arrangements with Genentech, we receive a tiered royalty on U.S.

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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.

OCREVUS has been approved for the treatment of RMS and PPMS in the E.U.

and certain other countries.

The commercialization of OCREVUS does not impact the percentage of the co-promotion profits we receive for RITUXAN or GAZYVA.

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Genentech cannot develop OCREVUS in CLL, non-Hodgkin's lymphoma or rheumatoid arthritis.

OCREVUS royalty revenue was based on our estimates from third-party and market research data of OCREVUS sales occurring during the corresponding period.

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.

Mosunetuzumab

In January 2022 we exercised our option with Genentech to participate in the joint development and commercialization of mosunetuzumab, a late-stage bispecific antibody in development for B-cell non-Hodgkin’s lymphoma and other therapeutic areas.

In connection with this exercise, we recorded a $ 30.0 million option exercise fee payable to Genentech in December 2021, which was recognized in research and development expense in our consolidated statements of income.

We also recorded a charge of approximately $ 20.0 million to reimburse Genentech for our 30.0 % of the costs incurred in developing this product candidate during 2021, which was recognized in research and development expense in our consolidated statements of income.

Under our collaboration with Genentech, we will be responsible for 30.0 % of development costs for mosunetuzumab prior to FDA approval and will be entitled to 30.0 % - 37.5 % of mosunetuzumab co-promotion operating profits and losses in the U.S.

based on certain events and low single-digit royalties on sales of mosunetuzumab outside the U.S.

If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to OCREVUS in exchange for the continued payment of the current royalties on net sales (as defined in our collaboration agreement and summarized above) in the U.S.

only, until the 11 year anniversary of the first commercial sale of OCREVUS in the U.S.

LUNSUMIO (mosunetuzumab)

In January 2022 we exercised our option with Genentech to participate in the joint development and commercialization of LUNSUMIO.

We also recorded a charge of approximately $ 20.0 million to reimburse Genentech for our 30.0 % share of the costs incurred in developing this product candidate during 2021, which was recognized in research and development expense in our consolidated statements of income for the year ended December 31, 2021.

For the year ended December 31, 2022, we recorded approximately $ 28.4 million in research and development expense and approximately $ 13.0 million in sales and marketing expense in our consolidated statements of income related to this collaboration.

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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to LUNSUMIO in exchange for 30.0 % of the U.S.

co-promotion operating profits or losses until the 11 year anniversary of the first commercial sale of LUNSUMIO in the U.S.

In December 2022 we entered into an agreement with Genentech related to the commercialization and sharing of economics for glofitamab, a late-stage bispecific antibody in development for B-cell non-Hodgkin's lymphoma and other blood cancers.

Under the terms of this agreement, we will have no payment obligations and will receive tiered royalties on potential net sales of glofitamab in the U.S.

Genentech will have sole decision-making rights on the commercialization of glofitamab within the U.S and, in the event of approval, we are eligible to receive tiered royalties in the mid-single digit range on potential net sales of glofitamab in the U.S.

If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to Glofitamab in exchange for a mid-single digit royalty on net sales (as defined in our collaboration agreement) in the U.S.

only, until the 11 year anniversary of the first commercial sale of the product in the U.S.

Profit-sharing Formulas

RITUXAN and Mosunetuzumab Profit Share

Our current pretax co-promotion profit-sharing formula for RITUXAN and mosunetuzumab provides for a 30.0 % share on the first $ 50.0 million of co-promotion operating profits earned each calendar year.

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

After First GAZYVA Threshold Date until Second GAZYVA Threshold Date 37.5 %

After Second GAZYVA Threshold Date 35.0 %

First GAZYVA Threshold Date means the earlier of (i) the date of the First Non-CLL GAZYVA FDA approval if U.S.

gross sales of GAZYVA for the preceding consecutive 12-month period were at least $ 150.0 million or (ii) the first day of the calendar quarter after the date of the First Non-CLL GAZYVA FDA Approval that U.S.

gross sales of GAZYVA within any consecutive 12-month period have reached $ 150.0 million.

Second GAZYVA Threshold Date means the first day of the calendar quarter after 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.

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 and (ii) January 1 of the calendar year following the calendar year in which the First Threshold Date occurs.

Our share of RITUXAN pre-tax profits in the U.S.

in excess of $ 50.0 million for the years ended December 31, 2022, 2021 and 2020, was 37.5 %.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In addition, should the FDA approve mosunetuzumab or any other anti-CD20 product other than OCREVUS or GAZYVA that is acquired or developed by Genentech and subject to the collaboration agreement, the above table would no longer apply and our share of the co-promotion operating profits of RITUXAN and the new product would be between 30.0 % and 37.5 % based on certain events.

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 profits in excess of $ 50.0 million varies, as summarized in the table below, upon the following events:

After First GAZYVA Threshold Date until Second GAZYVA Threshold Date 37.5 %

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.

Our share of GAZYVA pre-tax profits in excess of $ 50.0 million for the years ended December 31, 2022, 2021 and 2020, was 37.5 %.

If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to GAZYVA in exchange for the continued payment of the compensation payable for GAZYVA under the collaboration arrangement (and set forth above) until the 11 year anniversary of the first commercial sale of GAZYVA in the U.S.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Revenue from Anti-CD20 Therapeutic Programs

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(In millions) 2022 2021 2020

Royalty revenue on sales of OCREVUS $ 1,136.3 $ 991.7 $ 845.4

Biogen's share of pre-tax profits in the U.S.

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Total revenue from anti-CD20 therapeutic programs $ 1,700.5 $ 1,658.5 $ 1,977.8

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 in our consolidated statements of income.

After an anti-CD20 product is approved, we record our share of the development expense related to that product as a reduction of our share of pre-tax profits in revenue from anti-CD20 therapeutic programs.

Prior to regulatory approval, we record our share of the expense incurred by the collaboration for the development of anti-CD20 products in research and development expense and pre-commercialization costs within selling, general and administrative expense in our consolidated statements of income.

Ionis Pharmaceuticals, Inc.

In January 2012 we entered into a collaboration and license agreement with Ionis pursuant to which we have an exclusive, worldwide license to develop and commercialize SPINRAZA for the treatment of SMA.

In January 2012 we entered into a collaboration and license agreement with Ionis Pharmaceuticals Inc.

(Ionis) pursuant to which we have an exclusive, worldwide license to develop and commercialize SPINRAZA for the treatment of SMA.

Under our agreement with Ionis, we make royalty payments to Ionis on annual worldwide net sales of SPINRAZA using a tiered royalty rate between 11.0 % and 15.0 %, which are recognized in cost of sales within our consolidated statements of income.

Royalty cost of sales related to sales of SPINRAZA for the years ended December 31, 2021, 2020 and 2019, totaled $ 267.1 million, $ 286.6 million and $ 293.0 million, respectively.

2012 Ionis Agreement

In December 2012 we entered into an agreement with Ionis for the development and commercialization of up to three gene targets.

Under this agreement, Ionis is responsible for global development of any product candidate through the completion of a Phase 2 trial and we will provide advice on the clinical trial design and regulatory strategy.

We have an option to license the product candidate until completion of the Phase 2 trial.

If we exercise our option, we will pay a license fee of up to $ 70.0 million to Ionis and assume global development, regulatory and commercialization responsibilities.

Ionis is eligible to receive up to $ 130.0 million in additional milestone payments upon the achievement of certain regulatory milestones as well as royalties on future sales if we successfully develop the product candidate after option exercise.

In December 2019 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize BIIB080 (tau ASO), which is currently in Phase 1 development for the potential treatment of Alzheimer's disease.

In connection with the option exercise, we made a payment of $ 45.0 million to Ionis, which was recorded as research and development expense in our consolidated statements of income.

Future payments may include additional milestone payments of up to $ 155.0 million and royalties on future sales in the low- to mid-teens if we successfully develop the product candidate after option exercise.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Royalty cost of sales related to sales of SPINRAZA for the years ended December 31, 2022, 2021 and 2020, totaled approximately $ 243.1 million, $ 267.1 million and $ 286.6 million, respectively.

2018 Ionis Agreement

In June 2018 we closed a 10-year exclusive collaboration agreement with Ionis to develop novel antisense oligonucleotide (ASO) drug candidates for a broad range of neurological diseases (2018 Ionis Agreement) for a total payment of $ 1.0 billion, consisting of an upfront payment of $ 375.0 million and the purchase of approximately 11.5 million shares of Ionis common stock at a cost of $ 625.0 million.

In June 2018 we entered into a 10-year exclusive collaboration agreement with Ionis to develop novel antisense oligonucleotide (ASO) drug candidates for a broad range of neurological diseases for a total payment of $ 1.0 billion, consisting of an upfront payment of $ 375.0 million and the purchase of approximately 11.5 million shares of Ionis common stock at a cost of $ 625.0 million.

Upon closing, we recorded $ 50.9 million of the $ 375.0 million upfront payment as prepaid services in our consolidated balance sheets and recognized the remaining $ 324.1 million as research and development expense in our consolidated statements of income.

The amount recorded as prepaid services represented the value of the employee resources committed to the arrangement to provide research and discovery services over the term of the agreement.

The 11.5 million shares of Ionis common stock were purchased at a premium to their fair value at the transaction closing date.

The premium consisted of acquiring the shares at a price above the fair value based on the trailing 10-day weighted-average close price prior to entering into the 2018 Ionis Agreement in April 2018 and the effect of certain holding period restrictions.

We recorded an asset of $ 462.9 million in investments and other assets in our consolidated balance sheets reflecting the fair value of the Ionis common stock as of the purchase date and a charge of $ 162.1 million to research and development expense in our consolidated statements of income in the second quarter of 2018 reflecting the premium paid for the Ionis common stock.

Our investment in Ionis common stock is remeasured each reporting period.

Changes in the fair value of our investment in Ionis common stock, including the effect of the holding period restrictions, are reflected in other income (expense), net in our consolidated statements of income.

For additional information on the fair value of our investment in Ionis common stock, please read Note 7, Fair Value Measurements , to these consolidated financial statements.

We have the option to license therapies arising out of the 2018 Ionis Agreement and will be responsible for the development and commercialization of such therapies.

We have the option to license therapies arising out of this agreement and will be responsible for the development and commercialization of such therapies.

We may pay development milestones to Ionis of up to $ 125.0 million or $ 270.0 million for each program, depending on the indication plus an annual license fee, as well as royalties on potential net commercial sales.

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Upon commercialization, we may also pay Ionis up to $ 800.0 million in additional performance-based milestone payments and tiered royalties on potential net sales of such therapies.

In December 2021 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize BIIB115, a preclinical investigational ASO in development for SMA.

In connection with this option exercise, we made an opt-in payment of $ 60.0 million to Ionis, which was recorded as research and development expense in our consolidated statements of income.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In December 2021 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize BIIB115, an investigational ASO in development for SMA.

In connection with this option exercise, we made an opt-in payment of $ 60.0 million to Ionis, which was recorded as research and development expense in our consolidated statements of income for the year ended December 31, 2021.

2013 Long-term Strategic Research Agreement

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Under this agreement, Ionis performs research on a set of neurological targets identified within the agreement.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Ionis is eligible to receive milestone payments, license fees and royalty payments for all product candidates developed through this collaboration, with the specific amount dependent upon the modality of the product candidate advanced by us under the terms of the agreement.

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Ionis could receive additional milestone payments upon the achievement of certain regulatory milestones of up to $ 130.0 million, plus additional amounts related to the cost of clinical trials conducted by Ionis under the collaboration, and royalties on future sales if we successfully develop the product candidate after option exercise.

In December 2018 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize BIIB067 (tofersen), an investigational treatment for ALS with superoxide dismutase 1 (SOD1) mutations.

In connection with the option exercise, we made a payment of $ 35.0 million to Ionis, which was recorded as research and development expense in our consolidated statements of income.

Future payments may include potential post-licensing milestone payments of up to $ 55.0 million and royalties in the low- to mid-teen percentages on potential annual worldwide net sales.

In December 2018 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize tofersen (BIIB067), an investigational treatment for ALS with superoxide dismutase 1 (SOD1) mutations.

Potential post-licensing milestone payments may include up to $ 55.0 million and royalties in the low- to mid-teen percentages on potential annual worldwide net sales.

We are solely responsible for the costs and expense related to the development, manufacturing and commercialization of tofersen following the option exercise.

During the years ending December 31, 2022, 2021 and 2020, we incurred milestones of $ 17.0 million, $ 10.0 million and $ 28.0 million, respectively, related to the advancement of programs under this agreement, which were recorded as research and development expense in our consolidated statements of income.

Eisai Co., Ltd.

Lecanemab Collaboration

We have a collaboration agreement with Eisai to jointly develop and commercialize lecanemab (BAN2401), an anti-amyloid antibody, and elenbecestat, the oral BACE (base amyloid cleaving enzyme) inhibitor, two Eisai product candidates for the potential treatment of Alzheimer's disease (the Lecanemab Collaboration).

In September 2019 we and Eisai discontinued the global Phase 3 studies of elenbecestat in early Alzheimer's disease.

Eisai serves as the global operational and regulatory lead for lecanemab and all costs, including research, development, sales and marketing expense, are shared equally between us and Eisai.

If lecanemab receives marketing approval, we and Eisai will co-promote lecanemab and share profits equally.

In addition, the Lecanemab Collaboration provides both parties with certain rights and obligations in the event of a change in control of either party.

The Lecanemab Collaboration also provided Eisai with an option to jointly develop and commercialize ADUHELM (aducanumab) (ADUHELM Option), and an option to jointly develop and commercialize one of our anti-tau monoclonal antibodies (Anti-Tau Option).

In October 2017 Eisai exercised its ADUHELM Option and we entered into a new collaboration agreement for the joint development and commercialization of ADUHELM (aducanumab) (the ADUHELM Collaboration Agreement).

Eisai may exercise the Anti-Tau Option after completion of the Phase 1 clinical trial of such anti-tau monoclonal antibody.

If Eisai exercises its Anti-Tau Option, we will receive an upfront payment from Eisai and will be entitled to additional development and commercial milestone payments.

Eisai has not yet exercised its Anti-Tau Option.

2012 Ionis Agreement

In December 2012 we entered into an agreement with Ionis for the development and commercialization of up to three gene targets.

We have an option to license the product candidate until completion of the Phase 2 trial.

If we exercise our option, we will pay a license fee of up to $ 70.0 million to Ionis and assume global development, regulatory and commercialization responsibilities.

In December 2019 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize BIIB080 (tau ASO), which is currently in Phase 2 development for the potential treatment of Alzheimer's disease.

In connection with the option exercise, we made a payment of $ 45.0 million to Ionis, which was recorded as research and development expense in our consolidated statements of income.

During the year ended December 31, 2022, we incurred a milestone payment of $ 10.0 million, related to the advancement of BIIB080 under this agreement, which was recorded within research and development expense in our consolidated statements of income.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Eisai Co., Ltd.

LEQEMBI (lecanemab) Collaboration

We have a collaboration agreement with Eisai to jointly develop and commercialize LEQEMBI (lecanemab), an anti-amyloid antibody for the potential 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.

Upon LEQEMBI marketing approval, we and Eisai will 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.

The LEQEMBI Collaboration also provided Eisai with an option to jointly develop and commercialize ADUHELM (aducanumab) (ADUHELM Option), and an option to jointly develop and commercialize one of our anti-tau monoclonal antibodies (Anti-Tau Option).

On March 14, 2022, we amended our ADUHELM Collaboration Agreement with Eisai.

As of the amendment date, we have sole decision making and commercialization rights worldwide on ADUHELM, and beginning January 1, 2023, Eisai receives only a tiered royalty based on net sales of ADUHELM, and no longer participates in sharing ADUHELM's global profits and losses.

In March 2022 we also amended the LEQEMBI Collaboration Agreement with Eisai to eliminate the Anti-Tau Option.

If either company undergoes a change of control, as defined in our LEQEMBI Collaboration Agreement, the non-acquired party may elect to initiate an operational separation, as defined in the LEQEMBI Collaboration Agreement.

In the event of an operational separation, we would work with Eisai to effect a timely transition of any development, manufacturing or commercial responsibilities regarding LEQEMBI from us to Eisai.

In this scenario, as of six months following the change of control, our ongoing responsibility for LEQEMBI related cost-sharing would be reduced to an amount equal to 80.0 % of what we would have owed prior to the operational separation, and all other economic rights would remain unchanged.

In addition, in the event either company undergoes a change of control in which the acquirer is engaged in commercialization of a competing product, as defined in the LEQEMBI Collaboration Agreement, the non-acquired party may also request that the acquired party cease commercializing the competing product.

Should the acquired party elect to continue commercializing the competing product, the non-acquired party may terminate the LEQEMBI Collaboration Agreement.

Furthermore, in the event we are the non-acquired party, we may choose either to sell our interest in LEQEMBI to Eisai or purchase Eisai's interest in LEQEMBI, subject to the parameters set forth in the LEQEMBI Collaboration Agreement.

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

For the Years Ended December 31,

(In millions) 2022 2021 2020

Total development expense incurred by the collaboration related to the advancement of lecanemab and elenbecestat $ 323.0 $ 219.3 $ 348.7

Biogen's share of lecanemab and elenbecestat development expense reflected in research and development expense in our consolidated statements of income 161.5 109.6 174.3

Total sales and marketing expense incurred by the Lecanemab Collaboration 27.2 9.8 32.4

Biogen's share of lecanemab and elenbecestat sales and marketing expense reflected in selling, general and administrative expense in our consolidated statements of income 13.6 4.9 16.2

Total development expense incurred by the collaboration related to the advancement of LEQEMBI $ 347.2 $ 323.0 $ 219.3

Biogen's share of the LEQEMBI Collaboration development expense reflected in research and development expense in our consolidated statements of income 173.6 161.5 109.6

Total sales and marketing expense incurred by the LEQEMBI Collaboration 104.6 27.2 9.8

Biogen's share of the LEQEMBI Collaboration sales and marketing expense reflected in selling, general and administrative expense in our consolidated statements of income 52.3 13.6 4.9

ADUHELM Collaboration Agreement

Under the ADUHELM Collaboration Agreement, we lead the ongoing development of ADUHELM, and we and Eisai will co-promote ADUHELM with a region-based profit split.

Beginning January 1, 2019, Eisai is reimbursing us for 45.0 % of development costs incurred by the collaboration for the advancement of ADUHELM (ADUHELM development expense).

In March 2019, based on a pre-specified futility analysis, we discontinued the global Phase 3 trials, EMERGE and ENGAGE, designed to evaluate the efficacy and safety of ADUHELM in patients with early Alzheimer's disease.

In the first quarter of 2019, as a result of the decision to discontinue the Phase 3 EMERGE and ENGAGE trials following the futility analysis, we accrued and subsequently paid approximately $ 45.0 million related to the termination of various clinical trials and research and development contracts net of the expected 45.0 % Eisai reimbursement of development costs incurred under the ADUHELM Collaboration Agreement.

In October 2019 we and Eisai announced that we planned to pursue regulatory approval for ADUHELM in the U.S.

A new analysis of a larger dataset from these trials, conducted in scientific collaboration with the FDA, showed that the Phase 3 EMERGE trial met its pre-specified primary and secondary endpoints.

In July 2020 we completed the submission of a BLA for the approval of ADUHELM to the FDA and made a $ 75.0 million milestone payment to Neurimmune.

We recognized net profit-sharing income of $ 33.8 million to reflect Eisai's 45.0 % share of the $ 75.0 million milestone payment.

In June 2021 ADUHELM was granted accelerated approval by the FDA for the treatment of Alzheimer's disease and had its first commercial sale.

As a result of the launch of ADUHELM in the U.S., we made a $ 100.0 million milestone payment to Neurimmune.

For the year ended December 31, 2021, we recognized net profit-sharing income of $ 45.0 million to reflect Eisai's 45.0 % share of the $ 100.0 million milestone payment.

Upon commercialization, both companies will co-promote ADUHELM with a region-based profit split.

We will receive a 55.0 % share of the potential profits (losses) in the U.S., a 68.5 % share of the potential profits (losses) in the E.U.

and a 20.0 % share of the potential profits (losses) in Japan and Asia, excluding China and South Korea.

The two companies will share equally in the potential profits (losses) in rest of world markets.

Sales and marketing expense are shared in proportion to the same region-based profit split that is utilized to co-promote ADUHELM.

Under our initial ADUHELM Collaboration Agreement, we would lead the ongoing development of ADUHELM, and we and Eisai would co-promote ADUHELM with a region-based profit split.

Beginning in 2019, Eisai was reimbursing us for 45.0 % of development and sales and marketing expense incurred by the collaboration for the advancement of ADUHELM.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On March 14, 2022, we amended our ADUHELM Collaboration Agreement with Eisai.

Eisai's share of development, commercialization and manufacturing expense was limited to $ 335.0 million for the period from January 1, 2022 to December 31, 2022, which was achieved as of December 31, 2022.

Once this limit was achieved, we became responsible for all ADUHELM related costs.

A summary of development expense, sales and marketing expense and milestone payments related to the ADUHELM Collaboration Agreement is as follows:

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Total ADUHELM development expense $ 149.4 $ 183.7 $ 152.0

Biogen's share of ADUHELM development expense reflected in research and development expense in our consolidated statements of income 101.1 83.6 98.7

Biogen's share of the ADUHELM Collaboration development expense reflected in research and development expense in our consolidated statements of income 82.2 101.1 83.6

Total ADUHELM sales and marketing expense incurred by the ADUHELM Collaboration Agreement 134.2 562.3 353.0

Biogen's share of ADUHELM sales and marketing expense reflected in selling, general and administrative expense and collaboration profit (loss) sharing in our consolidated statements of income 301.4 193.7 15.1

Biogen's share of the ADUHELM Collaboration sales and marketing expense reflected in selling, general and administrative expense and collaboration profit (loss) sharing in our consolidated statements of income 71.5 301.4 193.7

Total ADUHELM Collaboration third party milestones — 100.0 75.0

Biogen's share of reimbursement from Eisai of ADUHELM milestone payments reflected in collaboration profit (loss) sharing in our consolidated statements of income — 45.0 33.8

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Co-promotion Profits and Losses

we recognize revenue on sales to third-parties as a component of product revenue, net in our consolidated statements of income.

ADUHELM Co-promotion Profits and Losses

we recognize revenue on sales of ADUHELM to third parties as a component of product revenue, net in our consolidated statements of income.

We also record the related cost of revenue and sales and marketing expense in our consolidated statements of income as these costs are incurred.

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are recognized in collaboration profit (loss) sharing in our consolidated statements of income.

For the year ended December 31, 2021, we recognized net profit-sharing income of $ 233.2 million to reflect Eisai's 45.0 % sharing of the net collaboration losses in the U.S.

For the years ended December 31, 2022 and 2021, we recognized net reductions to our operating expense of approximately $ 224.7 million and $ 233.2 million, respectively, to reflect Eisai's 45.0 % share of net collaboration losses in the U.S.

For the year ended December 31, 2021, we recognized a net reduction to our operating expense of $ 45.0 million to reflect Eisai's 45.0 % share of the $ 100.0 million milestone payment made to Neurimmune related to the launch of ADUHELM in the U.S., which was recorded in collaboration profit (loss) sharing in our consolidated statements of income.

For the year ended December 31, 2020, we recognized a net reduction to our operating expense of $ 33.8 million to reflect Eisai's 45.0 % share of the $ 75.0 million milestone payment made to Neurimmune related to the submission of a Biologics License Application (BLA) to the FDA for the approval of ADUHELM, which was recorded in collaboration profit (loss) sharing in our consolidated statements of income.

During the fourth quarter of 2021 we recorded approximately $ 164.0 million of charges associated with the write-off of inventory and purchase commitments in excess of forecasted demand related to ADUHELM.

During the first quarter of 2022, as a result of the final NCD, we recorded approximately $ 275.0 million of charges associated with the write-off of inventory and purchase commitments in excess of forecasted demand related to ADUHELM.

Additionally, for the years ended December 31, 2022 and 2021, we recorded approximately $ 111.0 million and $ 30.0 million, respectively, of aggregate gross idle capacity charges related to ADUHELM.

These charges were recorded in cost of sales within our consolidated statements of income for the years ended December 31, 2022 and 2021.

We have recognized approximately $ 197.0 million and $ 99.0 million related to Eisai's 45.0 % share of inventory, idle capacity charges and contractual commitments in collaboration profit (loss) sharing within our consolidated statements of income for the years ended December 31, 2022 and 2021, respectively.

Amounts receivable from Eisai related to the agreements discussed above we re approximately $ 88.0 million a nd $ 285.4 million as of December 31, 2022 and 2021, respectively.

Amounts payable to Eisai related to the agreements discussed above we re approximately $ 81.2 million a nd $ 46.5 million as of December 31, 2022 and 2021, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In addition, we and Eisai co-promote AVONEX, TYSABRI and TECFIDERA in Japan in certain settings and Eisai distributes AVONEX, TYSABRI, TECFIDERA and PLEGRIDY in India and other Asia-Pacific markets, excluding China.

During the fourth quarter of 2021 we recorded approximately $ 164.0 million of charges associated with inventory and purchase commitments in excess of forecasted demand related to ADUHELM, which was recognized in cost of sales within our consolidated statements of income.

In addition, we recognized the expected share of these charges from Eisai's 45.0 % share in collaboration profit (loss) sharing within our consolidated statements of income.

Amounts receivable from Eisai related to the agreements discussed above we re $ 285.4 million a nd $ 151.1 million as of December 31, 2021 and 2020, respectively.

Amounts payable to Eisai related to the agreements discussed above we re $ 46.5 million a nd $ 111.9 million as of December 31, 2021 and 2020, respectively.

We have a collaboration agreement with UCB to jointly develop and commercialize dapirolizumab pegol, an anti-CD40L pegylated Fab, for the potential treatment of systemic lupus erythematosus and other future agreed indications.

In November 2003 we entered into a collaboration agreement with UCB to jointly develop and commercialize dapirolizumab pegol, an anti-CD40L pegylated Fab, for the potential treatment of systemic lupus erythematosus and other future agreed indications.

Either we or UCB may propose development of dapirolizumab pegol in additional indications.

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All costs incurred for agreed indications, including research, development, sales and marketing expense, are shared equally between us and UCB.

Upon marketing approval, we and UCB will co-promote dapirolizumab pegol and share profits equally.

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:

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Total UCB collaboration development expense $ 68.0 $ 84.2 $ 58.3

Biogen's share of UCB development expense reflected in research and development expense in our consolidated statements of income 42.1 29.2 16.0

Biogen's share of the UCB collaboration development expense reflected in research and development expense in our consolidated statements of income 34.0 42.1 29.2

In November 2017 we entered into an exclusive license and collaboration agreement with Alkermes Pharma Ireland Limited, a subsidiary of Alkermes plc (Alkermes), for VUMERITY, a novel fumarate for the treatment of RMS.

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for the treatment of RMS.

In November 2019 VUMERITY became commercially available in the U.S.

During the fourth quarter of 2021 VUMERITY was approved for the treatment of RRMS in the E.U., Switzerland and the U.K.

During the fourth quarter of 2021 VUMERITY was approved for the treatment of relapsing-remitting MS (RRMS) in the E.U., Switzerland and the United Kingdom (U.K.).

Under this agreement, we received an exclusive, worldwide license to develop and commercialize VUMERITY and we pay Alkermes royalties of 15.0 % on worldwide net commercial sales of VUMERITY, which are recognized in cost of sales within our consolidated statements of income.

Royalties payable on net commercial sales of VUMERITY are subject, under certain circumstances, to tiered minimum annual payment requirements for a period of five years following FDA approval.

Royalty cost of sales related to sales of VUMERITY for the years ended December 31, 2021, 2020 and 2019, totaled $ 61.6 million, $ 12.9 million and $ 1.6 million, respectively.

Royalty cost of sales related to sales of VUMERITY for the years ended December 31, 2022, 2021 and 2020, totaled approximately $ 83.0 million, $ 61.6 million and $ 12.9 million, respectively.

Alkermes is eligible to receive royalties in the high-single digits to sub-teen double digits of annual net commercial sales upon successful development and commercialization of new product candidates, other than VUMERITY, developed under the exclusive license from Alkermes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the fourth quarter of 2019, following the FDA's approval of VUMERITY, we paid Alkermes $ 155.0 million in milestone payments, which were recorded in intangible assets in our consolidated balance sheets and will be amortized over the useful life of the product.

For the years ended December 31, 2021, 2020 and 2019, we recorded $ 26.5 million, $ 32.4 million and $ 53.5 million, respectively, in research and development expense in our consolidated statements of income related to this collaboration.

Alkermes currently supplies VUMERITY to us pursuant to a supply agreement.

In October 2019 we entered into a new supply agreement and amended our license and collaboration agreement with Alkermes.

Alkermes currently supplies both VUMERITY and FAMPYRA to us pursuant to separate supply agreements.

In October 2019 we entered into a new supply agreement and amended our license and collaboration agreement with Alkermes for VUMERITY.

We have elected to initiate a technology transfer and, following a transition period, to manufacture VUMERITY or have VUMERITY manufactured by a third party we have engaged in exchange for paying an increased royalty rate to Alkermes on any portion of future worldwide net commercial sales of VUMERITY that is manufactured by us or our designee.

In October 2022 we entered into a new supply agreement with Alkermes for FAMPYRA.

Acorda previously supplied FAMPYRA to us pursuant to a sublicensing arrangement with Alkermes, which was terminated in October 2022 as a result of an arbitration outcome between Acorda and Alkermes.

Acorda Therapeutics, Inc.

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net sales and we may pay potential milestone payments based on the successful achievement of certain regulatory and commercial milestones, which would be capitalized as intangible assets upon achievement of the milestones and amortized utilizing an economic consumption model.

The next expected milestone of $ 15.0 million, due if ex-U.S.

net sales reach $ 100.0 million over a period of four consecutive quarters, was recognized during the third quarter of 2020 and capitalized within intangible assets, net in our consolidated balance sheets.

Royalty payments are recognized in cost of sales within our consolidated statements of income.

During the third quarter of 2020 we recognized a milestone of $ 15.0 million, which became due

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

net sales reaching $ 100.0 million over a period of four consecutive quarters, and was capitalized within intangible assets, net in our consolidated balance sheets.

In connection with the collaboration and license agreement, we also entered into a supply agreement with Acorda for the commercial supply of FAMPYRA.

This agreement is a sublicense arrangement of an existing agreement between Acorda and Alkermes Inc., who acquired Elan Drug Technologies, the original party to the license with Acorda.

For the years ending December 31, 2021, 2020 and 2019, total cost of sales related to royalties and commercial supply of FAMPYRA reflected in our consolidated statements of income were $ 46.6 million, $ 44.5 million and $ 42.0 million, respectively.

This agreement was a sublicense arrangement of an existing agreement between Acorda and Alkermes Inc., who acquired Elan Drug Technologies, the original party to the license with Acorda.

In October 2022 we learned that, as a result of an arbitration filed by Acorda with the American Arbitration Association in July 2020 after Acorda and Alkermes were unable to resolve a dispute over license and supply royalties, Acorda no longer had to pay Alkermes any royalties on net sales for license and supply of FAMPYRA and Acorda was now free to use alternative sources for supply of FAMPYRA.

Acorda notified us that as a result of it no longer obtaining FAMPYRA from Alkermes, that we would need to enter into a supply agreement to obtain FAMPYRA directly with Alkermes.

For the years ending December 31, 2022, 2021 and 2020, total cost of sales related to royalties and commercial supply of FAMPYRA reflected in our consolidated statements of income were approximately $ 46.1 million, $ 46.6 million and $ 44.5 million, respectively.

Sage Therapeutics, Inc.

In November 2020 we entered into a global collaboration and license agreement with Sage to jointly develop and commercialize BIIB125 (zuranolone) for the potential treatment of major depressive disorder and postpartum depression and BIIB124 (SAGE-324) for the potential treatment of essential tremor with potential in other neurological conditions such as epilepsy.

In November 2020 we entered into a global collaboration and license agreement with Sage to jointly develop and commercialize zuranolone (BIIB125) for the potential treatment of MDD and PPD and BIIB124 (SAGE-324) for the potential treatment of essential tremor with potential in other neurological conditions such as epilepsy.

We recorded an asset in investments and other assets in our consolidated balance sheets to reflect the initial fair value of the Sage common stock acquired and a charge of approximately $ 209.0 million to research and development expense in our consolidated statements of income to reflect the premium paid for the Sage common stock.

We also made an upfront payment of $ 875.0 million that was recorded as research and development expense in our consolidated statements of income.

We also made an upfront payment of $ 875.0 million that was recorded as research and development expense within our consolidated statements of income for the year ended December 31, 2020.

We may also pay Sage development and commercial milestone payments that could total up to approximately $ 1.6 billion if all the specified milestones set forth in this collaboration are achieved.

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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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We may pay Sage milestones totaling $ 225.0 million upon the first commercial sale of zuranolone, for the potential treatment of MDD and PPD, in the U.S.

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

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Total Sage collaboration development expense $ 173.3 $ 167.7 $ —

Biogen's share of Sage development expense reflected in research and development expense in our consolidated statements of income 83.8

Biogen's share of the Sage collaboration development expense reflected in research and development expense in our consolidated statements of income 86.7 83.8 —

Total Sage sales and marketing expense incurred by the collaboration 109.9 36.4 —

Biogen's share of Sage sales and marketing expense reflected in selling, general and administrative expense in our consolidated statements of income 18.2

Biogen's share of the Sage collaboration sales and marketing expense reflected in selling, general and administrative expense in our consolidated statements of income 55.0 18.2 —

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Denali Therapeutics Inc.

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ATV enabled anti-amyloid beta program and a second program utilizing its Transport Vehicle technology.

Further, we have a right of first negotiation on two additional Transport Vehicle-enabled therapeutics, should Denali decide to seek a collaboration for such programs.

Further, we have a right of first negotiation on two additional ATV-enabled therapeutics for indications within specific neurodegenerative diseases, should Denali decide to seek a collaboration for such programs.

As part of this collaboration we purchased $ 465.0 million of Denali common stock in September 2020, or approximately 13 million shares at approximately $ 34.94 per share, which were initially subject to transfer restrictions.

We recorded an asset in investments and other assets in our consolidated balance sheets to reflect the initial fair value of the Denali common stock acquired and a charge of approximately $ 41.3 million to research and development expense in our consolidated statements of income to reflect the premium paid for the Denali common stock.

We also made an upfront payment of $ 560.0 million that was recorded as research and development expense in our consolidated statements of income.

We also made an upfront payment of $ 560.0 million that was recorded as research and development expense within our consolidated statements of income for the year ended December 31, 2020.

We may also pay Denali development and commercial milestone payments that could total up to approximately $ 1.1 billion if the milestones related to the LRRK2 program are achieved.

Under this collaboration, both companies share responsibility and costs for global development based on specified percentages and we are responsible for commercialization and may pay Denali potential tiered royalties.

Under this 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.

Outside the U.S.

and China we are responsible for commercialization and may pay Denali potential tiered royalties.

In October 2022 we and Denali announced the initiation of the Phase 3 LIGHTHOUSE study for BIIB122 (DNL151), a small molecule inhibitor of LRRK2 for the potential treatment of Parkinson's disease.

A summary of development expense related to this collaboration is as follows:

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Total Denali collaboration development expense $ 75.1 $ 42.5 $ 14.6

Biogen's share of Denali development expense reflected in research and development expense in our consolidated statements of income 25.5 8.8 —

Biogen's share of the Denali collaboration development expense reflected in research and development expense in our consolidated statements of income 43.8 25.5 8.8

Sangamo Therapeutics, Inc.

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The companies are leveraging Sangamo’s proprietary zinc finger protein technology delivered via adeno-associated virus to modulate the expression of key genes involved in neurological diseases.

In connection with the closing of this transaction in April 2020 we purchased $ 225.0 million of Sangamo common stock, or approximately 24 million shares at approximately $ 9.21 per share, which were initially subject to transfer restrictions.

We recorded an asset in investments and other assets in our consolidated balance sheets to reflect the initial fair value of the Sangamo common stock acquired and a charge of approximately $ 83.0 million to research and development expense in our consolidated statements of income to reflect the premium paid for the Sangamo common stock.

We also made an upfront payment of $ 125.0 million that was recorded as research and development expense in our consolidated statements of income.

We may also pay Sangamo research, development, regulatory and commercial milestone payments that could total up to approximately $ 2.4 billion if we select all of the targets allowed under this collaboration and all the

We also made an upfront payment of $ 125.0 million that was recorded as research and development expense within our consolidated statements of income for the year ended December 31, 2020.

Of this amount, up to $ 80.0 million relates to the selection of targets, $ 1.9 billion relates to the achievement of specified research, clinical development, regulatory and first commercial sale milestones and $ 380.0 million relates to the achievement of specified sales-based milestones if annual worldwide net sales of licensed products reach specified levels.

In addition, we may pay Sangamo tiered royalties on potential net sales of any products developed under this collaboration in the high single digit to sub-teen percentages.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

specified milestones set forth in this collaboration are achieved.

In addition, we may pay Sangamo tiered royalties on potential net sales of any products developed under this collaboration in the high single digit to double digit sub-teen percentages.

A summary of development expense related to this collaboration is as follows:

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Total Sangamo collaboration development expense $ 19.1 $ 22.7 $ 10.1

Biogen's share of Sangamo development expense reflected in research and development expense in our consolidated statements of income 14.6 6.4 —

Biogen's share of the Sangamo collaboration development expense reflected in research and development expense in our consolidated statements of income 12.1 14.6 6.4

InnoCare Pharma Limited

In July 2021 we entered into a collaboration and license agreement with InnoCare Pharma Limited (InnoCare) for orelabrutinib, an oral small molecule Bruton's tyrosine kinase inhibitor for the potential treatment of MS.

Orelabrutinib is currently being studied in a multi-country, placebo-controlled Phase 2 trial in relapsing-remitting MS.

Orelabrutinib is currently being studied in a multi-country, placebo-controlled Phase 2 trial in RRMS.

Under the terms of this collaboration, we have exclusive rights to orelabrutinib in the field of MS worldwide and certain autoimmune diseases outside of China (including Hong Kong, Macau and Taiwan), while InnoCare retains exclusive worldwide rights to orelabrutinib in the field of oncology and certain autoimmune diseases in China (including Hong Kong, Macau and Taiwan).

In connection with the closing of this transaction in August 2021 we made an upfront payment of $ 125.0 million that was recorded as research and development expense in our consolidated statements of income.

In connection with the closing of this transaction in August 2021 we made an upfront payment of $ 125.0 million that was recorded as research and development expense within our consolidated statements of income for the year ended December 31, 2021.

We may also pay InnoCare up to approximately $ 812.5 million in potential development milestones and potential commercial payments should this collaboration achieve certain development, commercial milestones and sales thresholds.

In addition, we may pay InnoCare tiered royalties on potential net sales of any products developed under this collaboration in the low to high teen percentages.

In February 2023 we terminated our license and collaboration agreement with InnoCare for orelabrutinib, for the potential treatment of MS.

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.

For the years ended December 31, 2021, 2020 and 2019, we recorded $ 89.1 million, $ 92.1 million and $ 80.8 million, respectively, as research and development expense in our consolidated statements of income related to other research and discovery related arrangements.

For the years ended December 31, 2022, 2021 and 2020, we recorded approximately $ 39.2 million , $ 89.1 million and $ 92.1 million, respectively, as research and development expense in our consolidated statements of income related to other research and discovery related arrangements.

Samsung Bioepis Co., Ltd.

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The share purchase transaction was completed in November 2018 and, upon closing, we paid 759.5 billion South Korean won ($ 676.6 million) to Samsung BioLogics.

As of December 31, 2021, our ownership percentage remained at approximately 49.9 %.

We recognize our share of the results of operations related to our investment in Samsung Bioepis under the equity method of accounting one quarter in arrears when the results of the entity become available, which is reflected as equity in (income) loss of investee, net of tax in our consolidated statements of income.

During 2015, as our share of losses exceeded the carrying value of our initial investment, we suspended recognizing additional

In April 2022 we completed the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics.

As part of this transaction, we are also eligible to receive up to an additional $ 50.0 million upon the achievement of certain commercial milestones.

Our policy for contingent payments of this nature is to recognize the payments in the period that they become realizable, which is generally the same period in which the payments are earned.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In the first quarter of 2019 we restarted recognizing our share of Samsung Bioepis' (income) losses, and we began recognizing amortization on certain basis differences resulting from our November 2018 investment.

Upon investment, the equity method of accounting requires us to identify and allocate differences between the fair value of our investment and the carrying value of our interest in the underlying net assets of the investee.

These basis differences are amortized over their economic life.

The total basis difference was approximately $ 675.0 million and relates to inventory, developed technology, IPR&D and deferred tax balances.

The basis differences related to inventory were amortized, net of tax, over their estimated useful lives of 1.5 years, and the basis differences related to developed technology and IPR&D for marketed products will be amortized, net of tax, over their estimated useful lives of 15 years.

Certain officers and affiliates of our joint venture partner, Samsung BioLogics, are currently subject to ongoing criminal proceedings that we continue to monitor.

While these proceedings could impact the operations of Samsung Bioepis and its business, we have assessed the value of our investment in Samsung Bioepis and continue to believe that the fair value of the investment is in excess of its net book value.

Prior to this sale, we recognized our share of the results of operations related to our investment in Samsung Bioepis under the equity method of accounting one quarter in arrears when the results of the entity became available, which was reflected as equity in (income) loss of investee, net of tax in our consolidated statements of income.

Upon our November 2018 investment, the equity method of accounting required us to identify and allocate differences between the fair value of our investment and the carrying value of our interest in the underlying net assets of the investee.

These basis differences were being amortized over their economic life, until the completion of the sale in April 2022, as discussed above.

The total basis difference was approximately $ 675.0 million and related to inventory, developed technology, IPR&D and deferred tax balances.

The basis differences related to inventory were amortized, net of tax, over their estimated useful lives of 1.5 years, and the basis differences related to developed technology and IPR&D for marketed products were being amortized, net of tax, over their estimated useful lives of 15 years.

For the year ended December 31, 2022, we recognized net income on our investment of $ 2.6 million, reflecting our share of Samsung Bioepis' operating profits, net of tax, totaling $ 17.0 million offset by amortization of basis differences totaling $ 14.4 million.

This amount reflects our share of results prior to the sale of Samsung Bioepis as the results are recognized one quarter in arrears.

Following the sale of Samsung Bioepis we no longer recognize gains or losses associated with Samsung Bioepis' results of operations and amortization related to basis differences.

For the year ended December 31, 2021, we recognized net income on our investment of $ 34.9 million, reflecting our share of Samsung Bioepis' operating profits, net of tax, totaling $ 64.6 million offset by amortization of basis differences totaling $ 29.7 million.

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The valuation allowance was released in the second quarter of 2021 based on a consideration of the positive and negative evidence, including the historic earnings of Samsung Bioepis.

In January 2022 we entered into an agreement to sell to Samsung Biologics our equity in Samsung Bioepis.

Under the terms of the proposed transaction, we would receive $ 1.0 billion in cash at closing and $ 1.3 billion to be deferred over two payments of $ 812.5 million due at the first anniversary and $ 437.5 million due at the second anniversary of the closing of the transaction.

We would also be eligible to receive up to an additional $ 50.0 million upon the achievement of certain commercial milestones.

Closing of the transaction is currently anticipated in mid-2022, contingent on the effectiveness of a securities registration statement filed by Samsung Biologics and satisfaction of certain regulatory and other customary closing conditions.

As of December 31, 2021, the carrying value of our investment in Samsung Bioepis totaled 713.3 billion South Korean won ($ 599.9 million), which is classified as a component of investments and other assets within our consolidated balance sheets.

In connection with the sale of Samsung Bioepis, the carrying value of our investment was reduced to zero.

For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to these consolidated financial statements.

2019 Development and Commercialization Agreement

In December 2019 we completed a transaction with Samsung Bioepis and secured the exclusive rights to commercialize two potential ophthalmology biosimilar products, BYOOVIZ (ranibizumab-nuna), a proposed ranibizumab biosimilar referencing LUCENTIS, and SB15, a proposed 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.

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 SB15, a proposed 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 connection with this transaction, we made an upfront payment of $ 100.0 million to Samsung Bioepis in January 2020, of which $ 63.0 million was recorded as research and development expense in our consolidated statements of income in 2019 and $ 37.0 million was recorded as an intangible assets, net in our consolidated balance sheets in 2019.

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During the third quarter of 2020 we paid Samsung Bioepis a $ 15.0 million development milestone, which was included in research and development expense in our consolidated statements of income.

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We also acquired an option to extend the term of our 2013 commercial agreement for BENEPALI, IMRALDI and FLIXABI by an additional five years , subject to payment of an option exercise fee of $ 60.0 million, and obtained an option to acquire exclusive rights to commercialize these products in China.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2013 Commercial Agreement

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in August 2017, May 2016 and January 2016, respectively, and we capitalized the related milestone payments totaling $ 75.0 million as intangible assets, net in our consolidated balance sheets.

In April 2018 we and Samsung Bioepis announced an agreement with AbbVie Inc.

(AbbVie) related to the commercialization of IMRALDI.

Under the terms of the agreement, AbbVie granted us and Samsung Bioepis patent licenses for the use and sale of IMRALDI in Europe, on a country-by-country basis, and we make royalty payments to AbbVie on behalf of Samsung Bioepis.

We began to recognize revenue on sales of IMRALDI to third-parties in Europe in the fourth quarter of 2018.

We reflect revenue on sales of BENEPALI, IMRALDI and FLIXABI to third parties in product revenue, net in our consolidated statements of income and record the related cost of revenue and sales and marketing expense in our consolidated statements of income to their respective line items when these costs are incurred.

Royalty payments to AbbVie on sales of IMRALDI are recognized in cost of sales within our consolidated statements of income.

Royalty payments to AbbVie Inc.

(AbbVie) on sales of IMRALDI are recognized in cost of sales within our consolidated statements of income.

We share 50.0 % of the profit or loss related to our commercial agreement with Samsung Bioepis, which is recognized in collaboration profit (loss) sharing in our consolidated statements of income.

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Other Services

Simultaneous with the formation of Samsung Bioepis, we also entered into a technical development services agreement, a manufacturing agreement and a license agreement with Samsung Bioepis.

Under the technical development services agreement, we provided Samsung Bioepis technical development and technology transfer services, which included, but were not limited to, cell culture development, purification process development, formulation development and analytical development.

Under the manufacturing agreement, we manufactured clinical and commercial quantities of bulk drug substance of biosimilar products for Samsung Bioepis pursuant to contractual terms.

Following the divestiture of our Hillerød, Denmark manufacturing operations in August 2019, FUJIFILM assumed responsibility for the manufacture of clinical and commercial quantities of bulk drug substance of biosimilar products for Samsung Bioepis.

We no longer recognize revenue for the manufacturing completed after the divestiture date under the manufacturing agreements with Samsung Bioepis.

For additional information on the divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures , to these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Simultaneous with the formation of Samsung Bioepis, we also entered into a license agreement with Samsung Bioepis.

Under the 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.

For the years ended December 31, 2021, 2020 and 2019, we recognized $ 20.7 million , $ 20.9 million and $ 106.2 million, respectively, in revenue under the license, technical development services and manufacturing agreements, which is reflected in revenue from collaborative and other relationships, as a component of other revenue in our consolidated statements of income.

Amounts receivable from Samsung Bioepis related to the agreements discussed above we re $ 4.1 million a nd $ 5.1 million as of December 31, 2021 and 2020, respectively.

Amounts payable to Samsung Bioepis related to the agreements discussed above we re $ 148.7 million a nd $ 99.0 million as of December 31, 2021 and 2020, respectively.

For the years ended December 31, 2022, 2021 and 2020, we recogniz ed $ 20.6 million, $ 20.7 million and $ 20.9 million, respectively, in royalty revenue under the license agreement, as a component of other revenue in our consolidated statements of income.

Amounts receivable from Samsung Bioepis related to the agreements discussed ab ove were $ 2.0 million a nd $ 4.1 million as of December 31, 2022 and 2021, respectively.

Amounts payable to Samsung Bioepis related to the agreements discussed above we re $ 40.5 million an d $ 148.7 million as of December 31, 2022 and 2021, respectively.

Investments in Variable Interest Entities

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We consolidate the results of Neurimmune as we determined that we are the primary beneficiary of Neurimmune because we have the power through the collaboration to direct the activities that most significantly impact the entity’s economic performance and we are required to fund 100.0 % of the research and development costs incurred in support of the collaboration.

In October 2017 we amended the terms of the Neurimmune Agreement and made a $ 150.0 million payment to Neurimmune in exchange for a 15.0 % reduction in the previously negotiated royalty rates payable on products developed under the Neurimmune Agreement, including royalties payable on potential commercial sales of ADUHELM.

In May 2018 we made an additional $ 50.0 million payment to Neurimmune to further reduce the previously negotiated royalty rates payable on products developed under the Neurimmune Agreement, including royalties payable on commercial sales of ADUHELM, by an additional 5.0 %.

Our royalty rates payable on products developed under the Neurimmune Agreement, including royalty rates payable on commercial sales of ADUHELM, now range from the high single digits to sub-teens.

As we consolidate the results of Neurimmune, we treated these payments as distributions and recognized them as charges to noncontrolling interests in the fourth quarter of 2017 and the second quarter of 2018, as applicable.

Our royalty rates payable on products developed under the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Neurimmune Agreement, including royalty rates payable on commercial sales of ADUHELM, range from the high single digits to sub-teens.

Under the terms of the Neurimmune Agreement, we were required to pay Neurimmune a milestone payment of $ 75.0 million upon the regulatory filing with the FDA for the approval of ADUHELM.

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In addition, during the second quarter of 2021 we recognized net profit-sharing income of $ 45.0 million to reflect Eisai's 45.0 % share of the $ 100.0 million milestone payment, which was recognized in collaboration profit (loss) sharing in our consolidated statements of income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Additionally, if aducanumab receives regulatory approval in the jurisdictions where we have submitted filings, we may pay up to $ 100.0 million in additional milestones to Neurimmune, which includes $ 50.0 million if launched in three or more countries in the E.U.

and $ 50.0 million if launched in Japan.

Milestones payable to Neurimmune are shared expenses under the ADUHELM Collaboration Agreement.

Research and development costs for which we reimburse Neurimmune are reflected in research and development expense in our consolidated statements of income.

During the years ending December 31, 2021, 2020 and 2019, amounts reimbursed were immaterial.

During the second quarter of 2021 we recorded a net deferred tax asset of approximately $ 490.0 million.

The net deferred tax asset is comprised of approximately $ 945.0 million of gross deferred tax asset, reduced by approximately $ 455.0 million of unrecognized tax benefit.

The deferred tax benefit relates to Neurimmune's tax basis in ADUHELM, the realization of which is dependent on future sales of ADUHELM and approval of the Swiss cantonal tax authorities.

During the fourth quarter of 2021 we recorded a valuation allowance of approximately $ 390.0 million related to this deferred tax asset.

There is an equal and offsetting amount assigned to net income (loss) attributable to noncontrolling interests, net of tax in our consolidated statements of income, resulting in a zero net impact to net income attributable to Biogen Inc.

Excluding the impact of the Neurimmune deferred tax asset, the assets and liabilities of Neurimmune are not significant to our consolidated financial position or results of operations as it is a research and development organization.

We have provided no financing to Neurimmune other than contractually required amounts.

Under the ADUHELM Collaboration Agreement, Eisai had an option to share in the benefit and cost associated with the royalty reductions, as discussed above;

however, Eisai did not elect to share in the benefit and cost with respect to either the October 2017 or May 2018 royalty reductions, which will impact the amount of profits (losses) on commercial sales of ADUHELM to be shared with Eisai.

Research and development costs for which we reimburse Neurimmune are reflected in research and development expense in our consolidated statements of income.

During the years ending December 31, 2022, 2021 and 2020, amounts reimbursed were immaterial.

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

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These development activities are included in research and development expense in our consolidated statements of income as they are incurred.

We have provided no financing to these variable interest entities other than previously contractually required amounts.

We have provided no financing to these variable interest entities other than previous contractually required amounts.

We are currently involved in various claims and legal proceedings, including the matters described below.

For information as to our accounting policies relating to claims and legal proceedings, including use of estimates and contingencies, please read Note 1, Summary of Significant Accounting Policies , to these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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;

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and (v) the parties' settlement positions.

If an estimate of the possible loss or range of loss can be made at this time, it is included in the potential loss contingency description below.

The claims and legal proceedings in which we are involved also include challenges to the scope, validity or enforceability of the patents relating to our products, pipeline or processes and challenges to the scope, validity or enforceability of the patents held by others.

These include claims by third-parties that we infringe their patents.

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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:

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;

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ADUHELM Securities Litigation

We and certain current and former officers are named as defendants in an action filed by a shareholder on November 13, 2020, and now pending in the U.S.

We and certain current and former officers are named as defendants in actions filed by shareholders in November 2020 (the November 2020 Securities Action) and February 2022 (the February 2022 Securities Action) and pending in the U.S.

District Court for the District of Massachusetts.

The action alleges violations of federal securities laws under 15 U.S.C §78j(b) and §78t(a) and 17 C.F.R.

§240.10b-5 and seeks a declaration of the action as a class action and monetary relief.

An estimate of the possible loss or range of loss cannot be made at this time.

No trial date has been set.

We have filed a motion to dismiss, which is pending.

The actions 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.

In September 2022, the court dismissed the November 2020 Securities Action, and the plaintiff has appealed to the U.S.

Court of Appeals for the First Circuit.

Our motion to dismiss the February 2022 Securities Action is pending.

Shareholder Derivative Actions

We and members of the Board of Directors are named as defendants in derivative actions filed by shareholders on February 9 and July 21, 2022, in the U.S.

District Court for the District of Massachusetts.

The actions allege violations of federal securities laws under 15 U.S.C.

§78n(a) and 17 C.F.R.

§240 14.a-9, breaches of fiduciary duties and waste of corporate assets, and seek declaratory and injunctive relief, monetary relief payable to Biogen, and attorneys’ fees and costs payable to the plaintiffs.

The court has stayed both cases.

IMRALDI Patent Litigation

In September 2018 Fresenius Kabi Deutschland GmbH (Fresenius Kabi) commenced proceedings for damages and injunctive relief against Biogen France SAS in the Tribunal de Grande Instance de Paris (the French proceeding) and in November 2018 against Biogen GmbH in the Düsseldorf Regional Court (the German proceeding), alleging that IMRALDI, the adalimumab biosimilar product of Samsung Bioepis that Biogen has commercialized in Europe, infringes national counterparts of European Patent No.

3 148 510 (the EP '510 Patent, expiring in May 2035).

In May 2020 the European Patent Office (EPO) held the EP '510 Patent invalid.

Fresenius Kabi' has appealed to the EPO's Technical Boards of Appeal, a hearing has been set for June 2022, and the German and French proceedings have been stayed pending the decision on appeal.

In June 2020 Fresenius Kabi commenced proceedings in Denmark's Maritime and Commercial High Court alleging that IMRALDI infringes the Danish counterpart of European Patent No.

3 145 488 (the EP '488 Patent, expiring in May 2035) and a Danish utility model.

In September 2021 the Court ruled that the patent and utility model are invalid and not infringed.

Fresenius Kabi has appealed to the High Court of Eastern Denmark and the appeal is pending.

The EPO has scheduled a hearing on the validity of the EP '488 Patent for October 2022.

In July 2020 the Danish Patent Board of Appeal revoked the Danish utility models that Fresenius Kabi had asserted against Biogen and Fresenius Kabi has appealed to the Danish Maritime and Commercial High Court.

No hearing has been scheduled.

In September 2018 Fresenius Kabi Deutschland GmbH (Fresenius Kabi) commenced proceedings for damages and injunctive relief against Biogen France SAS in the Tribunal de Grande Instance de Paris and proceedings against Biogen GmbH in the Düsseldorf Regional Court, alleging that IMRALDI, the adalimumab biosimilar product of Samsung Bioepis that Biogen commercializes in Europe, infringes national counterparts of European Patent No.

3 148 510 (the EP '510 Patent).

In June 2022 Fresenius Kabi amended both actions to assert claims under European Patent 3 145 488 (the EP ‘488 Patent), which expires in May 2035.

No hearing has been set in either action.

In June 2022 the Technical Boards of Appeal (TBA) of the European Patent Office (EPO) affirmed the revocation of the EP '510 Patent, which resolves all pending infringement claims under the EP '510 Patent.

The EPO upheld the validity of the EP '488 Patent in October 2022.

In June 2020 Fresenius Kabi commenced preliminary injunction proceedings in Denmark's Maritime and Commercial High Court alleging that IMRALDI infringes the Danish counterpart of the EP '488 Patent and a corresponding Danish utility model, DK 2020 00038 Y3.

In September 2021 the Court refused Fresenius Kabi's request for a preliminary injunction and Fresenius Kabi has withdrawn its appeal.

In July 2019 Gedeon Richter Nyrt commenced proceedings for damages and injunctive relief against Biogen GmbH in the Düsseldorf Regional Court, alleging infringement of the German counterpart of European Patent No.

3 212 667, which expires in October 2035.

The case has been stayed pending proceedings in the EPO seeking to invalidate the patent.

In November 2020 Gedeon Richter Nyrt commenced additional proceedings against Biogen GmbH in the Düsseldorf Regional Court alleging infringement of a German utility model.

In October 2021 Biogen filed cancellation proceedings in respect of the German utility model and the infringement proceedings have been stayed pending the outcome of the cancellation proceedings.

An estimate of the possible loss or range of loss in the IMRALDI patent litigation described above cannot be made at this time.

Qui Tam Litigation

In July 2015 a qui tam action filed by Michael Bawduniak on behalf of the U.S.

and certain states was unsealed by the U.S.

District Court for the District of Massachusetts.

The action alleges sales and promotional activities in violation of the federal False Claims Act and state law counterparts and seeks damages of $ 981.1 million plus statutory trebling of damages, civil penalties, attorneys' fees and costs.

A trial is scheduled for the third quarter of 2022.

has not made an intervention decision.

An estimate of the possible loss cannot be made at this time.

3 212 667 (the EP '667 Patent), which expires in October 2035.

The case has been stayed pending Gedeon Richter's appeal to the TBA of the revocation of the patent.

A hearing has been set by the TBA for July 2023.

In November 2020 Gedeon Richter Nyrt commenced proceedings against Biogen GmbH in the Düsseldorf Regional Court alleging infringement of a German utility model corresponding to EP '667.

The proceeding has been stayed pending the outcome of proceedings that Biogen has filed in the German Patent and Trademark Office to cancel the utility model, and in which a hearing has been set for March 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Dispute with Former Convergence Shareholders

In 2015 Biogen acquired Convergence, a UK company.

In November and December 2019 Shareholder Representative Services LLC, on behalf of the former shareholders of Convergence, sent us correspondence asserting claims of $ 200.0 million for alleged breach of the contract under which we acquired Convergence.

We dispute the claims.

Samsung BioLogics Arbitration

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In December 2020 we requested arbitration in the International Chamber of Commerce Court of International Arbitration against Samsung BioLogics seeking interpretation of certain provisions of the parties Joint Venture Agreement.

Samsung BioLogics counterclaimed for breach and seeks declaratory relief and unspecified damages.

The arbitration hearing has concluded and a decision is pending.

An estimate of the possible loss or range of loss cannot be made at this time.

ERISA Class Action Litigation

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Plaintiffs seek a declaration of the action as a class action and monetary and other relief.

No trial date has been set.

An estimate of the possible loss or range of loss cannot be made at this time.

Humana Patient Assistance Litigation

In September 2021 Humana Inc.

(Humana) filed suit against us in the U.S District Court for the District of Massachusetts alleging damages related to our providing MS patients with free medications and making charitable contributions to non-profit organizations that assist MS patients.

(Humana) filed suit against us in the U.S.

District Court for the District of Massachusetts, alleging damages related to our providing MS patients with free medications and making charitable contributions to non-profit organizations that assist MS patients.

Humana alleges violation of the federal RICO Act and state laws and seeks statutory treble damages, attorneys' fees and costs.

No trial date has been set.

An estimate of the possible loss or range of loss cannot be made at this time.

We filed a motion to dismiss, which is pending.

Distributor Matter

In December 2022 we terminated our distribution agreement with the distributor of products for Biogen in various countries in the Middle East and northern Africa.

The former distributor has asserted breach of contract.

No suit has been filed.

Other Matters

Government Investigations

House of Representatives Committees on Oversight and Reform and Energy and Commerce and the Office of Inspector General of the U.S.

Department of Health and Human Services have announced investigations relating to ADUHELM.

In addition, the Company has received a civil investigative demand from the Federal Trade Commission and an inquiry from the Securities and Exchange Commission seeking information relating to ADUHELM, including healthcare sites, ADUHELM’s approval and ADUHELM’s marketing.

Hatch-Waxman Act Litigation relating to TECFIDERA Orange-Book Listed Patents

In 2017 to 2020 we filed patent infringement proceedings relating to TECFIDERA Orange-Book listed patents pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act (the Delaware Actions), against Accord Healthcare Inc., Alkem Laboratories Ltd., Amneal Pharmaceuticals LLC, Cipla Limited, Graviti Pharmaceuticals Pvt.

Ltd., Hetero USA, Inc., Lupin Atlantis Holdings SA, Macleods Pharmaceuticals, Ltd., MSN Laboratories Pvt.

Ltd., Pharmathen S.A., Prinston Pharmaceutical Inc., Sandoz Inc., Shilpa Medicare Limited, Slayback Pharma LLC, Sun Pharmaceutical Industries, Ltd., Sun Pharmaceutical Industries, Inc., Sun Pharma Global FZE, Torrent Pharmaceuticals Ltd., TWi Pharmaceuticals, Inc., Windlas Healthcare Pvt.

and Zydus Pharmaceuticals (USA) Inc.

(collectively, the Delaware Defendants) in the U.S.

District Court for the District of Delaware (the Delaware Court) and against Mylan in the U.S.

District Court for the Northern District of West Virginia (the West Virginia Court).

In June 2020 the West Virginia Court entered judgment for Mylan that the asserted claims of the ‘514 Patent are invalid for lack of written description and in November 2021 the Federal Circuit affirmed.

The Delaware Court entered judgment for the Delaware Defendants on the grounds that the judgment of the West Virginia Court applies to the Delaware Actions under principles of collateral estoppel.

The appeals in the Delaware cases were stayed and we expect will remain so until the Federal Circuit's decision in the West Virginia case becomes final.

Petition for Inter Partes Review

In July 2018 Mylan Pharmaceuticals, Inc.

(Mylan) filed a petition that was granted by the U.S.

Patent Trial and Appeal Board (PTAB) for inter partes review of our U.S.

8,399,514 (the '514 Patent).

The '514 Patent includes claims covering treatment of MS with 480 mg of dimethyl fumarate per day as provided for in our TECFIDERA label.

In February 2020 the PTAB issued a final written decision upholding the patentability of the ‘514 Patent and in November 2021 the Federal Circuit ruled that the decision was moot.

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European Patent Office Oppositions

In January 2022 the Technical Boards of Appeal of the EPO affirmed the EPO's 2016 decision revoking our European Patent No.

2 137 537, which covers the treatment of MS with 480 mg of dimethyl fumarate as provided for in our TECFIDERA label.

TYSABRI Patent Revocation Matters

In November 2017 Swiss Pharma International AG, affiliated with the Polpharma Group, filed an action in the Commercial Court of Rome to invalidate the Italian counterpart of the European Patent No.

1 485 127 (the E.U.

'127 Patent) which covers administration of natalizumab (TYSABRI) to treat MS and expires in February 2023.

A hearing has been set for June 2022.

In August 2020 Polpharma Biologics S.A., also affiliated with the Polpharma Group, brought an action in the Polish Patent Office to revoke our Polish Patent No.

215263, which corresponds to the E.U.

'127 Patent and expires in February 2023.

The action was suspended by the Polish Patent Office in April 2021 pending examination of our amended patent claims.

In June 2021 Polpharma Biologics S.A., Sandoz B.V.

and Sandoz AG filed an action in the District Court of the Hague, Netherlands to invalidate the Dutch counterpart of our European Patent 2 676 967 (the EU '967 Patent), which expires in 2027 and covers methods of treatment using natalizumab (TYSABRI) and pre-treatment testing of patients.

A hearing has been set for September 2022.

In July 2021 the EPO revoked the EU ‘967 Patent.

We have appealed to the EPO’s Technical Boards of Appeal.

A hearing date has not been set.

In September 2021 Polpharma Biologics S.A., Sandoz AG, Sandoz Limited and Sandoz GmbH filed an action in the English High Court to revoke the UK counterpart of the EU ‘967 Patent and seeking a declaration that the patent would not be infringed by the marketing of Polpharma’s proposed natalizumab biosimilar.

A hearing has been set for November 2022.

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

The company has received subpoenas from the Securities and Exchange Commission seeking information relating to ADUHELM, including healthcare sites and ADUHELM's approval.

In 2021 the U.S.

House of Representatives Committees on Oversight and Reform and Energy (House Committees) and the Office of Inspector General (OIG) each announced investigations related to ADUHELM.

In December 2022 the House Committees issued a report on their investigation.

TYSABRI Patent Matters

In September 2022 we filed an action in the U.S.

District Court for the District of Delaware against Sandoz Inc.

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.

No trial date has been set.

In December 2022 the TBA affirmed the revocation of our European Patent 2 676 967 (the EP '967 Patent), covering pre-treatment testing of patients using natalizumab (TYSABRI).

In September 2021 Polpharma Biologics S.A., Sandoz AG, Sandoz Limited and Sandoz GmbH filed an action in the English High Court to revoke the U.K.

counterpart of the EP ‘967 Patent.

No trial date has been set.

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

Pharmaceutical Works Polpharma SA (Polpharma) and Mylan Ireland Ltd.

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On May 5, 2021, the European General Court annulled the EMA's non-validation decision with respect to Polpharma.

We have appealed the decision to the European Court of Justice and the appeal is pending.

The European Court of Justice will announce its decision in our appeal of this decision on March 16, 2023.

The case brought by Mylan Ireland has been stayed.

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We are also involved in product liability claims and other legal proceedings generally 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.

While the outcome of any of these proceedings cannot be accurately predicted, we do not believe

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the ultimate resolution of any of these existing matters would have a material adverse effect on our business or financial condition.

Commitments and Contingencies

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Elan was acquired by Perrigo Company plc (Perrigo) in December 2013 and Perrigo subsequently sold its rights to these payments to a third-party effective January 2017.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In 2016 we exercised our option to develop and commercialize SPINRAZA from Ionis.

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

In October 2019 the FDA approved VUMERITY for the treatment of RMS.

During the fourth quarter of 2021 VUMERITY was approved for the treatment of RRMS in the E.U., Switzerland and the U.K.

Under our agreement with Alkermes, we make royalty payments to Alkermes on worldwide net commercial sales of VUMERITY using a royalty rate of 15.0 %, which are recorded as cost of sales in our consolidated statements of income.

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

Contingent Consideration related to Business Combinations

In connection with our acquisition of Convergence, we agreed to make additional payments based upon the achievement of certain milestone events.

As the acquisition of Convergence occurred after January 1, 2009, we recognized the contingent consideration liabilities associated with this transaction at their fair value on the acquisition date and revalue the remaining obligations each reporting period.

We may pay up to approximately $ 400.0 million in remaining milestones related to this acquisition.

In 2006 we acquired Fumapharm AG.

As part of this acquisition we acquired the Fumapharm Products.

We were required to make contingent payments to former shareholders of Fumapharm AG and holders of their rights based on the attainment of certain cumulative sales levels of Fumapharm Products and the level of total net sales of Fumapharm Products in the prior 12-month period, as defined in the acquisition agreement, until such time as the cumulative sales level reached $ 20.0 billion, at which time no further contingent payments were due.

During the first quarter of 2019 we paid the final $ 300.0 million contingent payment as we achieved the $ 20.0 billion cumulative sales levels related to the Fumapharm Products in the fourth quarter of 2018.

Contingent Development, Regulatory and Commercial Milestone Payments

Based on our development plans as of December 31, 2021, we could trigger potential future milestone payments to third-parties of up to approximately $ 10.0 billion, including approximately $ 2.0 billion in development milestones, approximately $ 900.0 million in regulatory milestones and approximately $ 7.1 billion in commercial milestones, as part of our various collaborations, including licensing and development programs.

Regulatory and Commercial Milestone Payments

Based on our development plans as of December 31, 2022, we could trigger potential future milestone payments to third parties of up to approximately $ 9.3 billion, including approximately $ 2.0 billion in development milestones, approximately $ 0.5 billion in regulatory milestones and approximately $ 6.8 billion in commercial milestones, as part of our various collaborations, including licensing and development programs.

Payments under these agreements generally become due and payable upon achievement of certain development, regulatory or commercial milestones.

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If certain clinical and commercial milestones are met, we may pay up to $ 356.2 million in milestones in 2023 under our current agreements.

Additionally, if aducanumab receives regulatory approval in the jurisdictions where we have submitted filings, we may pay up to $ 100.0 million in additional milestones to Neurimmune in 2022, which includes $ 50.0 million if launched in three or more countries in the E.U.

and $ 50.0 million if launched in Japan.

Milestones payable to Neurimmune are shared expenses under the ADUHELM Collaboration Agreement.

This includes milestones totaling $ 225.0 million due to Sage upon the first commercial sale of zuranolone, for the potential treatment of MDD and PPD, in the U.S.

During the second quarter of 2020 we paid Neurimmune $ 75.0 million upon the completed submission of the BLA for the approval of ADUHELM to the FDA, which was recognized as a charge to net income (loss) attributable to noncontrolling interests, net of tax in our consolidated statements of income.

In June 2021 ADUHELM was granted accelerated approval by the FDA.

Under the terms of the Neurimmune Agreement, we were required to pay Neurimmune a milestone payment of $ 100.0 million related to the launch of

Under the terms of the Neurimmune Agreement, we were required to pay Neurimmune a milestone payment of $ 100.0 million related to the launch of ADUHELM in the U.S.

During the second quarter of 2021 we made this $ 100.0 million payment, which was recognized as a charge to net income (loss) attributable to noncontrolling interests, net of tax in our consolidated statements of income.

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ADUHELM in the U.S.

Other Funding Commitments

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We have approximately $ 929.0 million in cancellable future commitments based on existing CRO contracts as of December 31, 2022.

As part of the sale of our Hillerød, Denmark manufacturing operations to FUJIFILM, we provided FUJIFILM with certain minimum batch production commitment guarantees.

There is a risk that the minimum contractual batch production commitments will not be met.

Based upon current estimates we do not expect to incur an adverse commitment obligation associated with such guarantees.

We developed this estimate using a probability-weighted estimate of future manufacturing activity and may further adjust this estimate based upon changes in business conditions, which may result in the increase or reduction of this adverse commitment obligation in subsequent periods.

For additional information on the divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures , to these consolidated financial statements.

Tax Related Obligations

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The expense related to our 401(k) Savings Plan primarily consists of our matching contributions.

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Expense related to our 401(k) Savings Plan totaled $ 58.4 million, $ 44.3 million and $ 44.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Expense related to our 401(k) Savings Plan totaled approximately $ 56.0 million, $ 58.4 million and $ 44.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Deferred Compensation Plan

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The SSP also holds certain transition contributions on behalf of participants who previously participated in the Biogen, Inc.

Retirement Plan.

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The Restoration Match and participant contributions vest immediately.

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Our Swiss plan is a government-mandated retirement fund that provides employees with a minimum investment return.

The minimum investment return is determined annually by the Swiss government and was 1.00 % in 2021, 2020 and 2019.

The minimum investment return is determined annually by the Swiss government and was 2.00 % in 2022 and 1.00 % in both 2021 and 2020.

Under the Swiss plan, both we and certain of our employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary.

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As of December 31, 2022 and 2021, the Swiss plan had an unfunded net pension obligation of $ 49.9 million and $ 64.1 million, respectively, and plan assets that totaled $ 193.7 million and $ 200.1 million, respectively.

In 2021, 2020 and 2019 we recognized expense totaling $ 21.5 million, $ 15.5 million and $ 14.7 million, respectively, related to our Swiss plan, of which $ 3.5 million, $ 2.6 million and $ 1.2 million, respectively, was included in other income (expense), net in our consolidated statements of income.

In 2022, 2021 and 2020 we recognized net expense totaling $ 20.0 million, $ 21.5 million and $ 15.5 million, respectively, related to our Swiss plan, of which $ 5.3 million, $ 3.5 million and $ 2.6 million, respectively, was included in other (income) expense, net in our consolidated statements of income.

The obligations under the German plans are unfunded and totaled $ 40.9 million and $ 68.4 million as of December 31, 2022 and 2021, respectively.

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We operate as one operating segment, focused on discovering, developing and delivering worldwide innovative therapies for people living with serious neurological and neurodegenerative diseases as well as related therapeutic adjacencies.

Our Chief Executive Officer (CEO), as the chief operating decision-maker, manages and allocates resources to the operations of our company on a total company basis.

Our CEO, as the chief operating decision-maker, manages and allocates resources to the operations of our company on a total company basis.

Our research and development organization is responsible for the research and discovery of new product candidates and supports development and registration efforts for potential future products.

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(1) Represents amounts related to Europe less those attributable to Germany.

Long-Lived Assets

As of December 31, 2022, 2021 and 2020, approximately $ 2,198.5 million, $ 2,237.0 million and $ 2,180.6 million, respectively, of our long-lived assets were related to the construction of our large-scale biologics manufacturing facility in Solothurn, Switzerland.

For additional information on our large-scale biologics manufacturing facility in Solothurn, Switzerland, please read Note 10, Property, Plant and Equipment, to these consolidated financial statements.

For additional information on our Solothurn manufacturing facility, please read Note 11, Property, Plant and Equipment, to these consolidated financial statements.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We have audited the accompanying consolidated balance sheets of Biogen Inc.

and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of equity and of cash flow for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures