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Item 9A. Controls and Procedures

2024-02-14 compared with 2023-02-15 · 899 added, 836 removed, 2044 unchanged (46% of the section changed)

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CONTROLS AND PROCEDURES

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.

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) or 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of December 31, 2023.

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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(b) such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

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In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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• 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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Based on our assessment, our management has concluded that, as of December 31, 2023, our internal control over financial reporting is effective based on those criteria.

We excluded Reata from our assessment of internal control over financial reporting as of December 31, 2023, as Reata was acquired by our Company in a business combination during 2023.

The total assets and total revenue of Reata represents 1.0% and 0.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

The effectiveness of our internal control over financial reporting as of December 31, 2023, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their attestation report, which is included herein.

OTHER INFORMATION

RULE 10b5-1 TRADING ARRANGEMENTS

From time to time, our officers (as defined in Rule 16a-1(f)) and directors may enter into Rule 10b5-1 or non-Rule 10b5-1 trading arrangements (as each such term is defined in Item 408 of Regulation S-K).

During the fourth quarter of 2023 our officers and directors took the following actions with respect to 10b5-1 trading arrangements:

Trading Arrangement

Name and Position Action Date Rule

10b5-1 Non-Rule 10b5-1 Total Shares to be Sold Expiration Date

Robin Kramer ( Senior Vice President, Chief Accounting Officer )

Adopt 11/13/2023 X — 1,500 11/10/2025

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DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable.

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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We intend to make all required disclosures regarding any amendments to, or waivers from, provisions of our code of business conduct at the same location of our website.

The response to the remainder of this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Proposal 1 - Election of Directors,” “Corporate Governance at Biogen” and “ Miscellaneous - Stockholder Proposals ” contained in the proxy statement for our 2023 annual meeting of stockholders.

The response to the remainder of this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Proposal 1 - Election of Directors,” “Corporate Governance” and “ Miscellaneous - Stockholder Proposals ” contained in the proxy statement for our 2024 annual meeting of stockholders.

EXECUTIVE COMPENSATION

The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Executive Compensation Matters ” and “Corporate Governance at Biogen” contained in the proxy statement for our 2023 annual meeting of stockholders.

The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Executive Compensation Tables, ” "Compensation Discussion and Analysis" and “Corporate Governance” contained in the proxy statement for our 2024 annual meeting of stockholders.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Certain Relationships and Related Person Transactions ” and “Corporate Governance at Biogen ” contained in the proxy statement for our 2023 annual meeting of stockholders.

The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Certain Relationships and Related Person Transactions ” and “Corporate Governance ” contained in the proxy statement for our 2024 annual meeting of stockholders.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

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 2024 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

2.1† Asset Purchase Agreement among Biogen Idec International Holding Ltd., Elan Pharma International Limited and Elan Pharmaceuticals, Inc., dated as of February 5, 2013.

Filed as Exhibit 2.1 to our Current Report on Form 8-K/A filed on February 12, 2013.

2.2 Separation Agreement between Biogen Inc.

and Bioverativ Inc.

dated as of January 31, 2017.

Filed as Exhibit 2.1 to our Current Report on Form 8-K filed on February 2, 2017.

2.1 Agreement and Plan of Merger by and among Reata Pharmaceuticals, Inc., Biogen Inc.

and River Acquisition, Inc.

dated as of July 28, 2023.

Filed as Exhibit 2.1 to our current report on Form 8-K filed July 31, 2023.

3.1 Amended and Restated Certificate of Incorporation, as amended.

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Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on June 8, 2021.

3.4 Fourth Amended and Restated Bylaws.

Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on June 9, 2017.

3.4 Fifth Amended and Restated Bylaws.

Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on December 12, 2023.

4.1 Second Supplemental Indenture, dated April 30, 2020, between Biogen Inc.

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Filed as Exhibit 4.2 to our Current Report on Form 8-K filed on February 16, 2021.

4.6 Form of 3.250% Senior Notes due 2051, in the form of a Global Note bearing a private placement legend.

Filed as Exhibit 4.3 to our Current Report on Form 8-K filed on February 16, 2021.

4.7 Form of 3.250% Senior Notes due 2051, in the form of a Global Note bearing a Regulation S legend.

Filed as Exhibit 4.4 to our Current Report on Form 8-K filed on February 16, 2021.

4.6+ Description of Securities.

4.9 Registration Rights Agreement, dated February 16, 2021, between Biogen Inc.

and Deutsche Bank Securities Inc.

and Citigroup Global Markets, Inc.

with respect to the 3.250% Senior Notes due 2051.

Filed as Exhibit 4.5 to our Current Report on Form 8-K filed on February 16, 2021.

10.1 Credit Agreement between Biogen Inc., Bank of America, N.A., Goldman Sachs Bank USA and other lenders party thereto, dated August 28, 2015.

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

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.

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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.

Filed as Exhibit 10.3 to our Annual Report on Form 10-K for the year ended December 31, 2022.

Credit Agreement, dated as of August 28, 2023, among Biogen Inc., JPMorgan Chase Bank N.S., as administrative agent and the other lenders party thereto.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on September 1, 2023.

Second Amended and Restated Collaboration Agreement between Biogen Idec Inc.

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Filed as Exhibit 10.6 to our Annual Report on Form 10-K for the year ended December 31, 2010.

10.6 Settlement and License Agreement, dated January 17, 2017, between Biogen Swiss Manufacturing GmbH, Biogen International Holdings ltd., Forward Pharma A/S and other parties thereto.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on February 1, 2017.

10.7* Biogen Inc.

2017 Omnibus Equity Plan.

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

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Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

10.16* Form of restricted stock unit award agreement (2018 one-time transition grant) under the Biogen Inc.

2017 Omnibus Equity Plan.

Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

Form of market stock unit award agreement under the Biogen Inc.

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Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.

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

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2017 Omnibus Equity Plan.

10.21* Biogen Idec Inc.

2008 Amended and Restated Omnibus Equity Plan.

Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.

10.22* Form of performance unit award agreement under the Biogen Idec Inc.

2008 Omnibus Equity Plan.

Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.

10.23* Form of market stock unit award agreement under the Biogen Idec Inc.

2008 Omnibus Equity Plan.

Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.

10.24* Form of restricted stock unit award agreement under the Biogen Idec Inc.

2008 Omnibus Equity Plan.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 1, 2008.

10.25* Form of nonqualified stock option award agreement under the Biogen Idec Inc.

2008 Omnibus Equity Plan.

Filed as Exhibit 10.2 to our Current Report on Form 8-K filed on August 1, 2008.

10.26* Form of cash-settled performance shares award agreement under the Biogen Idec Inc.

2008 Omnibus Equity Plan.

Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.

10.27* Biogen Inc.

Filed as Exhibit 10.20 to our Annual Report on Form 10-K for the year ended December 31, 2022.

2006 Non-Employee Directors Equity Plan, as amended.

Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

10.28* Biogen Inc.

2015 Employee Stock Purchase Plan.

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Filed as Appendix B to our Definitive Proxy Statement on Schedule 14A filed on May 8, 2008.

10.30* Biogen Inc.

2019 Form of Performance-Based Management Incentive Plan, as amended.

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Filed as Exhibit 10.24 to our Annual Report on Form 10-K for the year ended December 31, 2015.

10.34* Biogen Inc.

Executive Severance Policy - U.S.

Executive Vice President, as amended effective June 19, 2019.

Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.

10.35* Biogen Inc.

Executive Severance Policy - U.S.

Executive Vice President, as amended effective July 13, 2020.

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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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Form of indemnification agreement for directors and executive officers.

Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 7, 2011.

10.38* Employment Agreement between Biogen Inc.

and Michel Vounatsos dated December 18, 2016 and effective as of January 6, 2017.

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.

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

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

10.43* 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.

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

and Biogen Therapeutics Inc.

(f/k/a Biogen Idec Therapeutics Inc.), as amended February 28, 2012, September 29, 2014, and February 20, 2019.

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

L etter amending employment arrangement of Susan Alexander dated February 28, 2020.

L etter regarding employment arrangement of Rachid Izzar dated August 1, 2019.

L etter regarding employment arrangement of Nicole Murphy dated January 28, 2022.

Filed as Exhi bit 10.

3 to our Q uarterly Report on Form 10-Q for the quarter ended Mar ch 31, 20 2 3 .

J VA Termination Agreement , by and among Biogen Therap eutics Inc.

, Samsung BioLogics Co., Ltd.

and Samsung Bioepis Co., Ltd, dated April 20, 2020.

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

and Eisai Co., LTD.

Filed as Exhibit 10.45 to our Annual Report on Form 10-K for the year ended December 31, 2022.

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

and Eisai Co., LTD.

Filed as Exhibit 10.46 to our Annual Report on Form 10-K for the year ended December 31, 2022.

21+ Subsidiaries.

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32.1++ Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Policy relating to recovery of erroneously awarded compensation.

101++ The following materials from Biogen Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in iXBRL (Inline Extensible Business Reporting Language):

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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.

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February 13, 2024

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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.

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Senior Vice President, Chief Accounting Officer (principal accounting officer) February 13, 2024

/ S / S TELIOS P APADOPOULOS

Director and Chairman of the Board of Directors February 15, 2023

Stelios Papadopoulos

/ S / A LEXANDER J .

Director February 15, 2023

/ S / C AROLINE D.

Director February 15, 2023

Director and Chair of the Board of Directors February 13, 2024

/ S / M ARIA C.

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Director February 13, 2024

/S/ W ILLIAM D.

/ S / S USAN L ANGER

Director February 13, 2024

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Director February 13, 2024

/ S / R ICHARD C .

/ S / M ONISH P ATOLAWALA

Director February 13, 2024

Monish Patolawala

/ S / E RIC K.

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Director February 13, 2024

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Report of Independent Registered Public Accounting Firm (PCAOB ID 238) F-83

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2023 2022 2021

Product, net $ 7,987.8 $ 8,846.9 $ 10,692.2

Product revenue, net

$ 7,246.7 $ 7,987.8 $ 8,846.9

Revenue from anti-CD20 therapeutic programs 1,689.6 1,700.5 1,658.5

Other 485.1 476.3 774.6

Contract manufacturing, royalty and other revenue 899.3 485.1 476.3

Total revenue 9,835.6 10,173.4 10,981.7

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Amortization and impairment of acquired intangible assets 240.6 365.9 881.3

Collaboration profit (loss) sharing ( 7.4 ) 7.2 232.9

(Gain) loss on divestiture of Hillerød, Denmark manufacturing operations — — ( 92.5 )

Collaboration profit sharing/(loss reimbursement) 218.8 ( 7.4 ) 7.2

(Gain) loss on fair value remeasurement of contingent consideration — ( 209.1 ) ( 50.7 )

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Total cost and expense 8,538.8 6,581.6 9,236.5

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

Income before income tax (benefit) expense and equity in loss of investee, net of tax 1,296.8 3,591.8 1,745.2

Income tax (benefit) expense 135.3 632.8 52.5

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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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Marketable securities — 1,473.5

Accounts receivable, net 1,705.0 1,549.4

Accounts receivable, net of allowance for doubtful accounts of $ 2.4 and $ 2.3 , respectively

1,664.1 1,705.0

Due from anti-CD20 therapeutic programs 435.9 431.4

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Current liabilities:

Current portion of notes payable $ — $ 999.1

Current portion of term loan $ 150.0 $ —

Taxes payable 257.4 259.9

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Total current liabilities 3,434.3 3,272.8

Notes payable 6,281.0 6,274.0

Notes payable and term loan 6,788.2 6,281.0

Deferred tax liability 641.8 334.7

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Additional paid-in capital 302.5 73.3

Accumulated other comprehensive loss ( 164.9 ) ( 106.7 )

Accumulated other comprehensive income (loss) ( 153.7 ) ( 164.9 )

Retained earnings 17,627.6 16,466.5

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See accompanying notes to these consolidated financial statements.

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Excess and obsolescence charges related to inventory 124.4 336.2 167.6

Amortization of inventory step-up 31.5 — —

Acquired in-process research and development — — 18.0

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Contingent consideration — ( 209.1 ) ( 50.7 )

(Gain)/loss on divestiture of Hillerød, Denmark manufacturing operations — — ( 92.5 )

Deferred income taxes ( 305.8 ) ( 168.6 ) ( 426.8 )

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Other 148.2 208.2 202.2

Changes in operating assets and liabilities, net:

Changes in operating assets and liabilities, net of effects of business acquired:

Accounts receivable 61.3 ( 203.4 ) 324.8

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Purchases of marketable securities ( 5,140.7 ) ( 3,448.5 ) ( 3,808.7 )

Acquisition of Reata, net of cash acquired ( 6,926.1 ) — —

Proceeds from sale of equity interest in Samsung Bioepis 788.1 990.3 —

Proceeds from sale of building — 582.6 —

Purchase of Sangamo Therapeutics, Inc.

stock — — ( 141.8 )

Purchase of Denali Therapeutics Inc.

stock — — ( 423.7 )

Purchase of Sage Therapeutics, Inc.

stock — — ( 441.0 )

Proceeds from divestiture of Hillerød, Denmark manufacturing operations — — 28.1

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Payments related to issuance of stock for share-based compensation arrangements, net ( 44.3 ) ( 1.9 ) ( 0.7 )

Repayments of borrowings and premiums paid on debt exchange ( 1,002.2 ) ( 170.0 ) —

Repayments of borrowings and premiums paid ( 809.9 ) ( 1,002.2 ) ( 170.0 )

Proceeds from borrowings 997.2 — —

Repayments of borrowings — — ( 1,500.0 )

Net (distribution) contribution to noncontrolling interest 12.3 12.4 ( 94.4 )

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comprehensive

loss Retained

income (loss)

earnings Treasury stock Total

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Other comprehensive income (loss), net of tax — — — — — 11.2 — — — 11.2 — 11.2

Distribution to noncontrolling interest — — — — — — — — — — — —

Capital contribution from noncontrolling interest — — — — — — — — — — 12.3 12.3

Repurchase of common stock pursuant to the 2020 Share Repurchase Program, at cost — — — — — — — ( 3.6 ) ( 750.0 ) ( 750.0 ) — ( 750.0 )

Retirement of common stock pursuant to the 2020 Share Repurchase Program, at cost — — ( 3.6 ) — ( 257.9 ) — ( 492.1 ) 3.6 750.0 — — —

Deconsolidation of noncontrolling interest — — — — — — — — — — ( 3.2 ) ( 3.2 )

Issuance of common stock under stock option and stock purchase plans — — 0.2 — 45.1 — — — — 45.1 — 45.1

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See accompanying notes to these consolidated financial statements.

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comprehensive

loss Retained

income (loss)

earnings Treasury stock Total

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Other comprehensive income (loss), net of tax — — — — — ( 58.2 ) — — — ( 58.2 ) — ( 58.2 )

Distribution to noncontrolling interest — — — — — — — — — — ( 100.0 ) ( 100.0 )

Capital contribution from noncontrolling interest — — — — — — — — — — 12.3 12.3

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comprehensive

loss Retained

income (loss)

earnings Treasury stock Total

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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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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 have a broad portfolio of medicines to treat MS, have introduced the first approved treatment for SMA, co-developed treatments to address a defining pathology of Alzheimer’s disease and launched the first approved treatment to target a genetic cause of ALS.

Through our 2023 acquisition of Reata we market the first and only drug approved in the U.S.

for the treatment of Friedreich's Ataxia in adults and adolescents aged 16 years and older.

We are focused on advancing our pipeline in neurology, specialized immunology and rare diseases.

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

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SPINRAZA for the treatment of SMA;

ADUHELM for the treatment of Alzheimer's disease;

SKYCLARYS for the treatment of Friedreich's Ataxia;

QALSODY for the treatment of ALS;

and FUMADERM for the treatment of severe plaque psoriasis.

We also 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;

We also have collaborations with Eisai on the commercialization of LEQEMBI for the treatment of Alzheimer's disease and Sage on the commercialization of ZURZUVAE for the treatment of PPD and we have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, CLL and other conditions;

RITUXAN HYCELA for the treatment of non-Hodgkin's lymphoma and CLL;

GAZYVA for the treatment of CLL and follicular lymphoma;

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

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.

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.

OCREVUS for the treatment of PPMS and RMS;

LUNSUMIO for the treatment of relapsed or refractory follicular lymphoma;

COLUMVI, a bispecific antibody for the treatment of non-Hodgkin's lymphoma;

and have the option to add other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, a wholly-owned member of the Roche Group.

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

and certain international markets.

We also have exclusive rights to commercialize TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA.

We continue to develop potential biosimilar product 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.

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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.

In November 2023 we terminated the Neurimmune Agreement, which resulted in the deconsolidation of our variable interest entity, Neurimmune.

Use of Estimates

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Use of Estimates

disclosure of contingent assets and liabilities.

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

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Actual results may differ from these estimates.

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.

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 Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers :

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

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

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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

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Actual amounts may ultimately differ from our estimates.

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

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

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.

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

• Medicaid rebates:

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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.

Our liability for Medicaid rebates consists of estimates for claims

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

• Governmental rebates:

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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

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wholesaler returns are due to product expiration.

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.

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For purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.

Our share of the pre-tax co-promotion profits on RITUXAN and GAZYVA and royalty revenue on the sale of OCREVUS resulted from an exchange of a license.

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Our share of the pre-tax co-promotion profits on RITUXAN, GAZYVA and LUNSUMIO and royalty revenue on sales of OCREVUS, resulted from an exchange of a license.

As we do not have future performance obligations under the license or collaboration agreement, revenue is recognized as the underlying sales occur.

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(i) our share of pre-tax profits and losses in the U.S.

for RITUXAN and GAZYVA;

for RITUXAN, GAZYVA and LUNSUMIO;

(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.

(ii) other revenue from anti-CD20 therapeutic programs, which consists of our share of pre-tax co-promotion profits on RITUXAN in Canada, royalties on net sales of COLUMVI in the U.S.

and royalties on sales of LUNSUMIO outside the U.S.

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

Pre-tax co-promotion profits consist of net sales to third-party customers less applicable costs to manufacture, third-party royalty expense, distribution, selling and marketing expense and joint development expense incurred by Genentech and the Roche Group.

Our share of the pre-tax profits on RITUXAN and GAZYVA include estimates that are based on information received from Genentech and the Roche Group.

Our share of the pre-tax profits on RITUXAN, GAZYVA and LUNSUMIO include estimates that are based on information received from Genentech and the Roche Group.

These estimates are subject to change and actual results may differ.

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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.

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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.

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

for LUNSUMIO was 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.

Contract Manufacturing, Royalty and Other Revenue

Contract Manufacturing Revenue

We record contract manufacturing revenue primarily from amounts earned under contract manufacturing agreements with our strategic customers.

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

Royalty Revenue

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).

During the first quarter of 2023 we began recognizing contract manufacturing revenue for LEQEMBI, upon accelerated approval of LEQEMBI in the U.S.

Prior to accelerated approval, our share of contract manufacturing amounts related to LEQEMBI were recognized in research and development expense within our consolidated statements of income.

Royalty and Other Revenue

Royalty and other revenue primarily 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 and our 50.0 % share of LEQEMBI product revenue, net and cost of sales, including royalties, as we are not the principal.

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.

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Collaborative and Other Relationships

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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.

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

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

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

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

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

Fair Value Measurements

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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, 2023 and 2022.

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Other Assets and Liabilities

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As of December 31, 2023 and 2022, 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.

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Accounts Receivable

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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.

In April 2022 we completed the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics, which resulted in a receivable of approximately $ 1.3 billion in cash to be deferred over two payments.

The first deferred payment of $ 812.5 million was received in April 2023 and the second deferred payment of $ 437.5 million is due at the second anniversary of the closing of this transaction in April 2024.

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.

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

Concentration of Credit Risk

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Marketable Debt Securities

Available-for-sale marketable debt securities are recorded at fair market value and unrealized gains and losses are included in accumulated other comprehensive income (loss) in equity, net of related tax effects, unless the security has experienced a credit loss, we have determined that we have the intent to sell the security or we have determined that it is more likely than not that we will have to sell the security before its expected recovery.

Available-for-sale marketable debt securities are recorded at fair market value and unrealized gains and losses are included in AOCI in equity, net of related tax effects, unless the security has experienced a credit loss, we have determined that we have the intent to sell the security or we have determined that it is more likely than not that we will have to sell the security before its expected recovery.

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

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During the third quarter of 2023 we sold all of our marketable debt securities and used the proceeds to partially fund our acquisition of Reata.

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

Marketable Equity Securities and Venture Capital Funds

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Our investments in venture capital funds are recorded at net asset value, which approximates fair value, and unrealized gains and losses are included in other (income) expense, net in our consolidated statements of income.

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The underlying investments of the venture capital funds in which we invest are in equity securities of certain biotechnology companies and are included in investments and other assets in our consolidated balance sheets.

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An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis.

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

Unrealized losses on available-for-sale debt securities that are determined to be temporary, and not related to credit loss, are recorded, net of tax, in AOCI.

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

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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

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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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We consider the shelf life of the product in relation to the expected timeline for approval and we consider patent related or contract issues that may prevent or delay commercialization.

We also base our judgment on the viability of commercialization, trends in the marketplace and market acceptance criteria.

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base our judgment on the viability of commercialization, trends in the marketplace and market acceptance criteria.

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

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

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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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For certain equipment leases, such as vehicles, we apply a portfolio approach to effectively account for the operating lease assets and liabilities.

Our operating leases are reflected in operating lease assets, accrued expense and other and in long-term operating lease liabilities in our consolidated balance sheets.

Our operating leases are reflected in operating lease assets, accrued expense and other and long-term operating lease liabilities in our consolidated balance sheets.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

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Intangible Assets

Our intangible assets consist of completed technology (comprised of acquired and in-licensed rights and patents, developed technology, out-licensed patents), in-process research and development (IPR&D) acquired after January 1, 2009, trademarks and trade names.

Our intangible assets consist of completed technology (comprised of acquired and in-licensed rights and patents, developed technology and other), IPR&D acquired after January 1, 2009, priority review vouchers and trademarks and trade names.

Our intangible assets are recorded at fair value at the time of their acquisition and are stated in our consolidated balance sheets net of accumulated amortization and impairments, if applicable.

Intangible assets related to acquired and in-licensed rights and patents, developed technology and out-licensed patents are amortized over their estimated useful lives using the economic consumption method if anticipated future revenue can be reasonably estimated.

Intangible assets related to acquired and in-licensed rights and patents, developed technology and other are amortized over their estimated useful lives using the economic consumption method if anticipated future revenue can be reasonably estimated.

The straight-line method is used when revenue cannot be reasonably estimated.

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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;

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

however, they are subject to review for impairment.

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

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

Acquired In-process Research and Development

Acquired IPR&D represents the fair value assigned to research and development assets that have not reached technological feasibility.

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We consider multiple factors in this assessment, including the nature of the technology acquired, the presence or absence of separate cash flow, the development process and stage of completion, quantitative significance and our rationale for entering into the transaction.

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If we acquire a business as defined under applicable accounting standards, then the acquired IPR&D is capitalized as an intangible asset.

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

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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.

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

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

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Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period.

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Derivative Instruments and Hedging Activities

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We recognize all derivative instruments as either assets or liabilities at fair value in our consolidated balance sheets.

Changes in the fair value of our derivative instruments are recognized each period in current earnings or accumulated other comprehensive income (loss), depending on whether the derivative instrument is designated as part of a hedge transaction and, if so, the type of hedge transaction.

Changes in the fair value of our derivative instruments are recognized each period in current earnings or AOCI, depending on whether the derivative instrument is designated as part of a hedge transaction and, if so, the type of hedge transaction.

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

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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 hedge the changes in the spot exchange rate in AOCI 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.

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Adjustments resulting from the translation of the financial statements of our foreign operations into U.S.

dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income (loss), as a separate component of equity.

dollars are excluded from the determination of net income and are recorded in AOCI, as a separate component of equity.

For subsidiaries where the functional currency of the assets and liabilities differ from the local currency, non-monetary assets and liabilities are translated at the rate of exchange in effect on the date assets were acquired while monetary assets and liabilities are translated at current rates of exchange as of the balance sheet date.

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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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For example, if the level of net sales in any calendar year increases the royalty rate within the year, we will record our cost of sales at an even rate over the year, based on the estimated blended royalty rate.

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Accounting for Share-Based Compensation

Our share-based compensation programs grant awards that have included stock options, restricted stock units that vest based on stock performance known as market stock units (MSUs), performance-vested restricted stock units that settle in cash (CSPUs), time-vested restricted stock units (RSUs), performance-vested restricted stock units that can be settled in cash or shares of our common stock (PUs) at the sole discretion of the Compensation and Management Development Committee of our Board of Directors, performance-vested stock units that settle in stock or cash (PSUs) and shares issued under our employee stock purchase plan (ESPP).

Our share-based compensation programs grant awards that have included stock options, restricted stock units that vest based on stock performance known as MSUs, time-vested RSUs, performance-vested stock units that settle in stock or cash (PSUs) and shares issued under our ESPP.

Compensation expense is recognized based on the estimated fair value of the awards at grant date.

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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 for our MSUs.

The fair values of our MSUs and PSUs that settle in stock and have market-based metrics 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 for these awards.

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

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Compensation expense for RSUs is recognized straight-line over the applicable service period.

We apply an accelerated attribution method to recognize share-based compensation expense when accounting for our CSPUs, PUs and PSUs that settle in cash, and the fair value of the liability is remeasured at the end of each reporting period through expected settlement.

Compensation expense associated with CSPUs, PUs and PSUs that settle in cash are based upon the stock price and the number of units expected to be earned after assessing the probability that certain performance criteria will be met and the targeted payout level associated with the performance criteria expected to be achieved.

We apply an accelerated attribution method to recognize share-based compensation expense when accounting for our PSUs that settle in cash, and the fair value of the liability is remeasured at the end of each reporting period through expected settlement.

Compensation expense associated with PSUs that settle in cash are based upon the stock price and the number of units expected to be earned after assessing the probability that certain performance criteria will be met and the targeted payout level associated with the performance criteria expected to be achieved.

Cumulative adjustments are recorded each quarter to reflect changes in the stock price and estimated outcome of the performance-related conditions until the date results are determined and settled.

If performance criteria are not met or not expected to be met, any compensation expense previously recognized to date associated with the awards will be reversed.

The fair values of PSUs that settle in stock are based upon the stock price on the date of grant.

The fair values of PSUs that settle in stock and do not have market-based metrics are based upon the stock price on the date of grant.

Compensation expense is recognized for the number of units expected to be earned after assessing the probability that certain performance criteria will be met and the targeted payout level associated with the performance criteria expected to be achieved.

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Research and Development Expense

Research and development expense consists of expenses incurred in performing research and development activities, which include compensation and benefits, facilities and overhead expense, clinical trial expense and fees paid to 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

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expense is expensed as incurred.

Research and development expense consists of expenses incurred in performing research and development activities, which include compensation and benefits, facilities and overhead expense, clinical trial expense and fees paid to CROs, clinical supply and manufacturing expense, 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.

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.

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.

If we are not the principal, we record operating costs as a reduction of revenue.

Expenses incurred by Genentech in the ongoing development of RITUXAN,

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

Selling, General and Administrative Expense

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We evaluate the realizability of our deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.

We recognize deferred taxes associated with our global intangible low-taxed income (GILTI) tax calculations.

We recognize deferred taxes associated with our GILTI tax calculations.

The income tax consequences from the intra-entity transfers of inventory within our consolidated group, both current and deferred, are recorded as a prepaid tax or deferred charge and recognized through our consolidated statements of income when the inventory is sold to a third-party.

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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

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

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

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

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Diluted earnings per share is computed based on the treasury method by dividing net income by the weighted-average number of common shares outstanding during the period plus potentially dilutive common equivalent shares outstanding.

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Business Combinations

Business combinations are recorded using the acquisition method of accounting.

The results of operations of the acquired company are included in our results of operations beginning on the acquisition date, and assets acquired and liabilities assumed are recognized on the acquisition date at their respective fair values.

Any excess of consideration transferred over the net carrying value of the assets acquired and liabilities assumed as of the acquisition date is recognized as goodwill.

We use the multi-period excess earnings method, which is a form of the income approach, utilizing post-tax cash flow and discount rates in estimating the fair value of identifiable intangible assets acquired when allocating the purchase consideration paid for the acquisition.

The estimates of the fair value of identifiable intangible assets involve significant judgment by management and include assumptions with measurement uncertainty, such as the amount and timing of projected cash flow, long-term sales forecasts, discount rates and additionally for IPR&D intangible assets, the timing and probability of regulatory and commercial success.

We use the net realizable value method in estimating the fair value of acquired finished goods and work-in-process inventory.

Raw materials acquired are valued using the replacement cost method.

Transaction and restructuring costs related to business combinations are expensed as incurred.

The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date.

If we determine the assets acquired do not meet the definition of a business, the transaction will be accounted for as an asset acquisition rather than a business combination.

New Accounting Pronouncements

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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.

Segment Reporting

In November 2023 the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure .

This standard requires disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss and the title and position of the entity's CODM.

The amendments in this update also expand the interim segment disclosure requirements.

All disclosure requirements under this standard are also required for public entities with a single reportable segment.

This standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis.

We are currently evaluating the potential impact that this new standard will have on our consolidated financial statements and related disclosures.

Fair Value Measurements

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

In June 2022 the FASB issued ASU No.

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

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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.

This standard became 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):

Simplifying the Accounting for Income Taxes .

This standard removes certain exceptions to the general principles in Topic 740 and simplifies certain other aspects of the accounting for income taxes.

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.

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.

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 for the year ended December 31, 2020.

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

Upon adoption, we recorded an immaterial amount in other (income) expense, net in our consolidated statements of income.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Reata Pharmaceuticals, Inc.

On September 26, 2023, we completed the acquisition of all of the issued and outstanding shares of Reata, a biopharmaceutical company focused on developing therapeutics that regulate cellular metabolism and inflammation in serious neurologic diseases.

As a result of this transaction we acquired SKYCLARYS (omaveloxolone), the first and only drug approved in the U.S.

for the treatment of Friedreich's Ataxia in adults and adolescents aged 16 years and older, as well as other clinical and preclinical pipeline programs.

The acquisition of Reata is expected to complement our global portfolio of neuromuscular and rare disease therapies.

The addition of SKYCLARYS is anticipated to provide potential operating synergies with SPINRAZA and QALSODY.

Under the terms of this acquisition, we paid Reata shareholders $ 172.50 in cash for each issued and outstanding Reata share, which totaled approximately $ 6.6 billion.

In addition, we agreed to pay approximately $ 983.9 million in cash for Reata's outstanding equity awards, inclusive of employer taxes, of which approximately $ 590.5 million was attributable to pre-acquisition services and is therefore reflected as a component of total purchase price paid.

Of the $ 983.9 million paid to Reata's equity award holders, we recognized approximately $ 393.4 million as compensation attributable to the post-acquisition service period, of which $ 196.4 million was recognized as a charge to selling, general and administrative expense with the remaining $ 197.0 million as a charge to research and development expense within our consolidated statements of income for the year ended December 31, 2023 .

These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to Reata employees that required no future services to vest.

We funded this acquisition through available cash, cash equivalents and marketable securities, supplemented by the issuance of a $ 1.0 billion term loan under our term loan credit agreement.

For additional information on our term loan credit agreement, please read Note 13, Indebtedness , to these consolidated financial statements.

We accounted for this acquisition as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations , and recorded assets acquired and liabilities assumed at their respective fair values as of the acquisition date.

Purchase Price Consideration

Total consideration transferred for the acquisition of Reata is summarized as follows:

(In millions) As of September 26, 2023

Cash consideration paid to Reata shareholders (1)

Fair value of Reata equity compensation pre-acquisition services and related taxes (2)

Total consideration $ 7,193.4

(1) Represents cash consideration transferred of $ 172.50 per outstanding Reata ordinary share based on 38.3 million Reata shares outstanding at closing.

(2) Represents the fair value of Reata stock options and stock units issued to Reata equity award holders and the related taxes attributable to pre-acquisition vesting services.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Preliminary Purchase Price Allocation

The following table summarizes the provisional amounts recognized for assets acquired and liabilities assumed as of the acquisition date, as well as measurement period adjustments made year-to-date to the amounts initially recorded as of the acquisition date on September 26, 2023.

The measurement period adjustments summarized below resulted from updates to our valuation assumptions related to the estimated amounts and timing of future cash flows associated with certain intangible assets, updates of our assumptions related to the quantities, selling location and remaining manufacturing and selling costs of acquired inventory, and other assets and liabilities.

The related impact to our consolidated statements of income that would have been recognized in previous periods if the adjustments were recognized as of the acquisition date is immaterial.

(In millions) Amounts Recognized as of Acquisition Date

(as previously reported)

Measurement Period Adjustments Amounts Recognized as of Acquisition Date

(as adjusted)

Cash and cash equivalents $ 267.3 $ — $ 267.3

Accounts receivable

Inventory 1,692.0 ( 433.0 ) 1,259.0

Other current assets 53.6 — 53.6

Intangible assets:

Completed technology for SKYCLARYS (U.S.) 3,600.0 600.0 4,200.0

In-process research and development (omaveloxolone) 1,900.0 400.0 2,300.0

Priority review voucher 100.0 — 100.0

Other clinical programs 20.0 20.0 40.0

Operating lease assets 122.4 ( 1.2 ) 121.2

Accrued expense and other ( 98.9 ) ( 2.6 ) ( 101.5 )

Debt payable ( 159.9 ) — ( 159.9 )

Contingent payable to Blackstone (1)

( 300.0 ) — ( 300.0 )

Deferred tax liability ( 922.5 ) 10.1 ( 912.4 )

Operating lease liabilities

( 151.8 ) — ( 151.8 )

Other assets and liabilities, net ( 2.0 ) ( 0.5 ) ( 2.5 )

Total identifiable net assets 6,136.1 592.8 6,728.9

Goodwill 1,057.3 ( 592.8 ) 464.5

Total assets acquired and liabilities assumed $ 7,193.4 $ — $ 7,193.4

(1) For additional information on the contingent payable to Blackstone, please read Note 18, Other Consolidated Financial Statement Detail , to these consolidated financial statements.

Total inventory acquired was approximately $ 1.3 billion, which reflects a step-up in the fair value of finished goods and work-in-process inventory for SKYCLARYS.

The fair value was determined based on the estimated selling price of the inventory, less the remaining manufacturing and selling costs and a normal profit margin on those manufacturing and selling efforts.

This fair value step-up adjustment will be amortized to cost of sales within our consolidated statements of income when the inventory is sold, which is expected to be within approximately 3 years from the acquisition date.

For the year ended December 31, 2023, amortization from the fair value step-up adjustment as a result of inventory sold during the fourth quarter was approximately $ 31.5 million.

Intang ible assets:

Intangible assets are comprised of $ 4.2 billion related to SKYCLARYS commercialization rights in the U.S., $ 2.3 billion of IPR&D related to the omaveloxolone program outside the U.S., which had not yet received regulatory approval in the E.U.

as of the acquisition date, $ 100.0 million related to a rare pediatric disease priority voucher which may be used to obtain priority review by the FDA for a future regulatory submission or sold to a third party and $ 40.0 million related to other clinical programs.

The estimated fair values of the program related intangible assets were determined using a multi-period excess earnings method, a form of the income approach, utilizing a discount rate of 14.3 % and the estimated fair value of the priority review voucher was based on recent external purchase and sale transactions of similar vouchers.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Our valuation of the SKYCLARYS commercialization rights reflects the assumption that, using an economic consumption model, the related $ 4.2 billion intangible asset will be amortized over its expected economic life.

Our valuation of the $ 2.3 billion IPR&D asset relates to omaveloxolone, which was submitted to the EMA in 2023 and subsequently approved in the E.U.

in February 2024.

We expect sales to commence in certain countries in Europe during 2024, at which time we will begin amortizing the intangible asset over its expected economic life.

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

We assumed responsibility for a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas, with an initial lease term of 16 years.

We recorded a lease liability of approximately $ 151.8 million, which represents the net present value of rental expense over the remaining lease term of approximately 15 years, with a corresponding right-of-use asset of approximately $ 121.2 million, which represents our estimate of the fair value for a market participant of the current rental market in the Dallas, Texas area.

Included in our estimate of the market rental rate is the value of any leasehold improvements or tenant allowances related to the building.

We do not intend to occupy this building and are evaluating opportunities to sublease the property.

Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized.

We recognized goodwill of approximately $ 464.5 million, which is not deductible for tax purposes.

The goodwill recognized from our acquisition of Reata is primarily the result of the deferred tax consequences from the transaction recorded for financial statement purposes.

Acquisition-related expenses:

Acquisition-related expenses, which were comprised primarily of regulatory, advisory and legal fees, and other transaction costs, totaled approximately $ 28.4 million and are included within selling, general and administrative expense within our consolidated statements of income for the year ended December 31, 2023.

Assumptions in the Allocations of Purchase Price

T he results of operations of Reata, along with the estimated fair values of the assets acquired and liabilities assumed in the Reata acquisition, have been included in our consolidated financial statements since the closing of the Reata acquisition on September 26, 2023 .

Our preliminary estimate of the fair value of the specifically identifiable assets acquired and liabilities assumed as of the date of acquisition is subject to the finalization of management's analysis related to certain matters, such as finalizing our assessment of income taxes.

The final determination of these fair values will be completed as additional information becomes available but no later than one year from the acquisition date.

The final determination may result in asset and liability fair values that are different than the preliminary estimates.

Subsequent to the acquisition date, our results of operations include the results of operations of Reata.

Due to the immateriality of Reata's revenue and expense, additional pro forma information combining the results of operations of Biogen and Reata have not been included.

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.

In April 2022 we completed the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics in exchange for total consideration of approximately $ 2.3 billion.

Under the terms of this transaction, we received approximately $ 1.0 billion in cash at closing, with approximately $ 1.3 billion in cash to be deferred over two payments.

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.

This pre-tax gain included reclassifications from AOCI 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We concluded that the divestment of Samsung Bioepis did not meet the criteria to be reported as discontinued operations in our consolidated financial statements, as our decision to divest this business did not represent a strategic shift that would 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 of December 31, 2023, the estimated fair value of the remaining second deferred payment using a risk-adjusted discount rate of 5.8 % was approximately $ 430.0 million .

This payment has been classified as a Level 3 measurement and is reflected in other current assets within our consolidated balance sheets as of December 31, 2023.

For the year ended December 31, 2023, we recognized a gain of approximately $ 13.7 million to reflect the change in fair value related to the first deferred payment due to us, which was received in April 2023.

Additionally, for the year ended December 31, 2023, we recognized a gain of approximately $ 24.6 million to reflect the change in fair value related to the second deferred payment due to us.

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 the first and second deferred payments due to us, respectively.

These changes were recorded in other (income) expense, net within 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.

Our policy for contingent payments of this nature is to recognize the payments in the period the payments 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.

Currently, we believe that the likelihood of Samsung BioLogics failing to make the second deferred payment due to us 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restructuring

2023 Fit for Growth Restructuring Program

In 2023 we initiated additional cost saving measures as part of our Fit for Growth program to reduce operating costs, while improving operating efficiency and effectiveness.

The Fit for Growth program is expected to generate approximately $ 1.0 billion in gross operating expense savings by 2025, some of which will be reinvested in various initiatives.

The Fit for Growth program is currently estimated to include net headcount reductions of approximately 1,000 employees and we expect to incur restructuring charges ranging from approximately $ 260.0 million to $ 280.0 million.

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

For the Year Ended December 31,

(In millions) Severance

Costs Accelerated Depreciation and Other Costs Total

Selling, general and administrative $ — $ 23.3 $ 23.3

Research and development — 1.2 1.2

Restructuring charges 153.4 34.6 188.0

Total charges $ 153.4 $ 59.1 $ 212.5

includes costs associated with items such as asset abandonment and write-offs, facility closure costs, pretax gains and losses resulting from the termination of certain leases, employee non-severance expense, consulting fees and other costs.

Reata Integration

Following the close of our Reata acquisition, we implemented an integration plan designed to realize operating synergies through cost savings and avoidance.

These amounts are primarily related to severance and are expected to be paid by the end of 2024.

For the year ended December 31, 2023, we recognized approximately $ 30.4 million of net pre-tax restructuring charges related to employee severance costs.

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.

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

Charges related to our 2022 cost saving initiatives were substantially incurred during 2022 with remaining payments expected to be made through 2026.

Total charges incurred from our 2022 cost saving initiatives are summarized as follows:

For the Years Ended December 31,

(In millions) Severance

Costs Accelerated Depreciation and Other Costs Total Severance Costs Accumulated Depreciation and Other Costs (1)

Restructuring charges $ ( 2.2 ) $ 2.6 $ 0.4 $ 112.6 $ 18.5 $ 131.1

Total charges $ ( 2.2 ) $ 2.6 $ 0.4 $ 112.6 $ 18.5 $ 131.1

(1) Amounts reflect a gain recorded during the third quarter of 2022 of approximately $ 5.3 million related to the partial termination of a portion of our lease located at 300 Binney Street.

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

AND SUBSIDIARIES

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 :

Charges and spending related to our 2023 and 2022 workforce reductions and Reata integration are summarized as follows:

(In millions) Total

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Restructuring reserve, December 31, 2022 35.9

Expense 181.6

Payment ( 140.5 )

Foreign currency and other adjustments ( 1.6 )

Restructuring reserve, December 31, 2023 $ 75.4

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States Rest of

Multiple Sclerosis (MS):

Multiple Sclerosis:

TECFIDERA $ 263.1 $ 749.4 $ 1,012.5 $ 417.7 $ 1,026.2 $ 1,443.9 $ 680.6 $ 1,271.3 $ 1,951.9

521.3 32.1 553.4 408.9 1.5 410.4 64.3 — 64.3

VUMERITY 512.1 64.2 576.3 521.3 32.1 553.4 408.9 1.5 410.4

Total Fumarate 775.2 813.6 1,588.8 939.0 1,058.3 1,997.3 1,089.5 1,272.8 2,362.3

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FAMPYRA — 90.5 90.5 — 96.6 96.6 — 105.2 105.2

MS 2,860.0 2,570.2 5,430.2 3,214.8 2,881.9 6,096.7 5,112.3 2,719.8 7,832.1

Spinal Muscular Atrophy:

Multiple Sclerosis 2,436.0 2,225.9 4,661.9 2,860.0 2,570.2 5,430.2 3,214.8 2,881.9 6,096.7

Rare Disease:

SPINRAZA 610.5 1,130.7 1,741.2 600.2 1,193.3 1,793.5 587.9 1,317.2 1,905.1

5.8 0.1 5.9 — — — — — —

SKYCLARYS (2)

55.9 — 55.9 — — — — — —

Rare Disease 672.2 1,130.8 1,803.0 600.2 1,193.3 1,793.5 587.9 1,317.2 1,905.1

BENEPALI — 438.8 438.8 — 441.0 441.0 — 498.3 498.3

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Biosimilars 29.2 740.8 770.0 4.3 746.8 751.1 — 831.1 831.1

FUMADERM — 8.2 8.2 — 11.0 11.0 — 12.2 12.2

ADUHELM 4.8 — 4.8 3.0 — 3.0 — — —

4.0 7.8 11.8 4.8 8.2 13.0 3.0 11.0 14.0

Total product revenue $ 3,141.4 $ 4,105.3 $ 7,246.7 $ 3,469.3 $ 4,518.5 $ 7,987.8 $ 3,805.7 $ 5,041.2 $ 8,846.9

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

(1) QALSODY became commercially available in the U.S.

during the second quarter of 2023.

(2) SKYCLARYS was obtained as part of our acquisition of Reata in September 2023.

SKYCLARYS became commercially available in the U.S.

during the second quarter of 2023 and we began recognizing revenue from SKYCLARYS in the U.S.

during the fourth quarter of 2023, subsequent to our acquisition.

(3) BYOOVIZ became commercially available in the U.S.

during the third quarter of 2022 and commercially available in certain international markets in 2023.

(4) Other includes FUMADERM, ADUHELM and ZURZUVAE, which became commercially available in the U.S.

during the fourth quarter of 2023.

(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 27.0 % and 9.9 % of gross product revenue in 2023, 26.8 % and 11.1 % of gross product revenue in 2022 and 28.8 % and 10.1 % of gross product revenue in 2021, respectively.

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Total revenue-related reserves $ 1,062.0 $ 1,035.0

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Revenue from Anti-CD20 Therapeutic Programs

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

for RITUXAN and GAZYVA 547.0 647.7 1,080.2

for RITUXAN, GAZYVA and LUNSUMIO (1)

409.4 547.0 647.7

Other revenue from anti-CD20 therapeutic programs 14.0 17.2 19.1

Total revenue from anti-CD20 therapeutic programs $ 1,689.6 $ 1,700.5 $ 1,658.5

(1) LUNSUMIO became commercially available in the U.S.

during the first quarter of 2023.

Approximately 17.2 %, 16.7 % and 15.1 % of our total revenue in 2023, 2022 and 2021, respectively, was derived from our collaboration arrangements with Genentech.

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

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

Contract Manufacturing, Royalty and Other Revenue

Contract manufacturing, royalty and other revenue is summarized as follows:

For the Years Ended December 31,

(In millions) 2023 2022 2021

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

Contract Manufacturing and Other Revenue

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

Contract manufacturing revenue $ 848.2 $ 417.7 $ 427.7

Royalty and other revenue 51.1 67.4 48.6

Total contract manufacturing, royalty and other revenue $ 899.3 $ 485.1 $ 476.3

Contract Manufacturing Revenue

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

During the first quarter of 2023 we began recognizing contract manufacturing revenue for LEQEMBI, upon accelerated approval of LEQEMBI in the U.S.

Prior to accelerated approval, our share of contract manufacturing amounts related to LEQEMBI were recognized in research and development expense within our consolidated statements of income.

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.

4 unchanged sentences

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.

Royalty and Other Revenue

Royalty and other revenue primarily 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 license arrangements with Samsung Bioepis and our 50.0 % share of LEQEMBI product revenue, net and cost of sales, including royalties, as we are not the principal.

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

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Total inventory $ 2,609.1 $ 1,365.5

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

We recorded approximately $ 1.3 billion of acquired inventory, which includes measurement period adjustments, related to SKYCLARYS as a result of our acquisition of Reata in September 2023.

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

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

Write Downs and Other Charges

Inventory amounts written down as a result of excess, obsolescence or unmarketability are charged to cost of sales, and totaled $ 124.4 million, $ 336.2 million and $ 167.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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

We recognized approximately $ 136.0 million related to Eisai's 45.0 % share of these charges in collaboration profit sharing/(loss reimbursement) 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.

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

As of December 31, 2023 and 2022, the carrying value of ADUHELM inventory was zero.

In November 2023 we notified Neurimmune of our decision to terminate our collaboration and license agreement with Neurimmune and to discontinue the development and commercialization of ADUHELM.

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

For additional information on the discontinuation of ADUHELM, please read Note 20, Investments in Variable Interest Entities , to these consolidated financial statements.

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Amortization Net

Completed technology 4 - 28 years

Completed technology

Acquired and in-licensed rights and patents

$ 8,180.2 $ ( 2,440.7 ) $ 5,739.5 $ 3,866.6 $ ( 2,219.1 ) $ 1,647.5

Developed technology and other

13 - 31 years

3,548.6 ( 3,429.1 ) 119.5 3,548.7 ( 3,410.1 ) 138.6

Total completed technology

11,728.8 ( 5,869.8 ) 5,859.0 7,415.3 ( 5,629.2 ) 1,786.1

In-process research and development Indefinite until commercialization 2,340.0 — 2,340.0 — — —

Priority review voucher Indefinite 100.0 — 100.0 — — —

Trademarks and trade names Indefinite 64.0 — 64.0 64.0 — 64.0

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Amortization and impairment of acquired intangible assets totaled $ 240.6 million, $ 365.9 million and $ 881.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

For the year ended December 31, 2023, we had no impairment charges.

Amortization of acquired intangible assets, excluding impairment charges, totaled $ 240.6 million, $ 246.3 million and $ 252.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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.

The decrease in amortization of acquired intangible assets, excluding impairment charges, over the three years was primarily due 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 DPN.

We monitor events and expectations regarding product performance.

If new information indicates that the assumptions underlying our most recent analysis are substantially different than those utilized in our current estimates, our analysis would be updated and may result in a significant change in the anticipated lifetime revenue of the relevant products.

The occurrence of an adverse event could substantially increase the amount of amortization expense related to our acquired intangible assets as compared to previous periods or our current expectations, which may result in a significant negative impact on our future results of operations.

Completed Technology

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

Completed technology intangible assets are amortized over their estimated useful lives, which range between 2 to 31 years, with a remaining weighted average useful life of 12 years for acquired and in-licensed rights and patents and 10 years for developed technology and other.

In connection with our acquisition of Reata in September 2023 we acquired SKYCLARYS, a commercially-approved product in the U.S., with an estimated fair value of approximately $ 4.2 billion , which includes measurement period adjustments.

IPR&D Related to Business Combinations

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

We review amounts capitalized as acquired IPR&D for impairment annually, as of October 31, and whenever events or changes in circumstances indicate to us that the carrying value of the assets might not be recoverable.

The carrying value associated with our IPR&D assets as of December 31, 2021, relates to the IPR&D programs we acquired in connection with our acquisition of Convergence Pharmaceuticals Holdings Ltd.

(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 .

We review amounts capitalized as

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

acquired IPR&D for impairment annually, as of October 31, and whenever events or changes in circumstances indicate to us that the carrying value of the assets might not be recoverable.

The carrying value associated with our IPR&D assets as of December 31, 2023, relates to the IPR&D programs we acquired in connection with our acquisition of Reata in September 2023 with an estimated fair value of approximately $ 2.3 billion , which includes measurement period adjustments.

Priority Review Voucher

In connection with our acquisition of Reata in September 2023 we acquired a rare pediatric disease priority review voucher that may be used to obtain priority review by the FDA for a future regulatory submission or sold to a third party.

We recorded the priority review voucher based on its estimated fair value of $ 100.0 million as an intangible asset.

The estimated fair value was based on recent external purchase and sale transactions of similar vouchers.

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

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

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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.

During the second quarter of 2021 we announced that our Phase 3 STAR study of BIIB111 and our Phase 2/3 XIRIUS study of BIIB112 did not meet their primary endpoints.

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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.

Although we made this determination in February 2021, it was based on conditions that existed as of December 31, 2020.

As a result, we recognized an impairment charge of approximately $ 75.4 million during the fourth quarter of 2020 to reduce the fair value of the related IPR&D intangible asset to zero .

The IPR&D impairment charges were included in amortization and impairment of acquired intangible assets and the gain resulting from the remeasurement of our contingent consideration obligation was recorded in (gain) loss on fair value remeasurement of contingent consideration in our consolidated statements of income.

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.

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Goodwill, beginning of year $ 5,749.0 $ 5,761.1

Goodwill resulting from Reata acquisition 464.5 —

Other 5.7 ( 12.1 )

Goodwill, end of year $ 6,219.2 $ 5,749.0

As of December 31, 2022, we had no accumulated impairment losses related to goodwill.

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

As of December 31, 2023 and 2022, we had no accumulated impairment losses related to goodwill.

Other includes adjustments related to foreign currency exchange rate fluctuations.

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Cash equivalents $ 610.7 $ — $ 610.7 $ —

Marketable debt securities:

Corporate debt securities 1,231.6 — 1,231.6 —

Government securities 810.3 — 810.3 —

Mortgage and other asset backed securities 137.3 — 137.3 —

Marketable equity securities 416.8 416.8 — —

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430.0 — — 430.0

Other assets:

Derivative contracts 11.9 — 11.9 —

Other non-current assets:

Plan assets for deferred compensation 37.5 — 37.5 —

Receivable from Samsung BioLogics (1)

405.4 — — 405.4

Total $ 1,506.9 $ 416.8 $ 660.1 $ 430.0

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Total $ 31.6 $ — $ 31.6 $ —

(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.

(1) Represents the fair value of the current payment due from Samsung BioLogics as a result of the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics during the second quarter of 2022, for which we elected the fair value option.

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

During the third quarter of 2023 we sold all of our marketable debt securities and used the proceeds to partially fund our acquisition of Reata.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2022

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Marketable equity securities 791.1 791.1 — —

Other current assets:

Receivable from Samsung BioLogics (1)

798.8 — — 798.8

Other non-current 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 $ —

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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.

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.

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

Our marketable equity securities represent investments in publicly traded equity securities.

Our ability to liquidate our investments in Denali, Sage and Sangamo may be limited by the size of our interest, the volume of market related activity, our concentrated level of ownership and potential restrictions resulting from our status as a collaborator.

Therefore, we may realize significantly less than the current value of such investments.

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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, 2023 and 2022.

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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:

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

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

As of December 31,

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Fair value, end of year $ —

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.

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, reducing the remaining fair value of vixotrigine to zero, as well as changes in the interest rates used to revalue our contingent consideration liabilities.

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.

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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

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

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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.

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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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt Instruments

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(In millions) 2023 2022

3.625 % Senior Notes due September 15, 2022 (1)

$ — $ 1,020.0

Current portion:

2023 Term Loan 364-day tranche (1)

Current portion of notes payable and term loan 150.0 —

Non-current portion:

2023 Term Loan three-year tranche (1)

4.050 % Senior Notes due September 15, 2025

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3.250 % Senior Notes due February 15, 2051

Total $ 5,410.2 $ 8,004.7

(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.

Non-current portion of notes payable and term loan 6,137.7 5,410.2

Total notes payable and term loan $ 6,287.7 $ 5,410.2

(1) In connection with our acquisition of Reata we drew $ 1.0 billion from our 2023 Term Loan, comprised of a $ 500.0 million floating rate 364-day tranche and a $ 500.0 million floating rate three-year tranche.

For additional information on our 2023 Term Loan, 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, 2023, compared to 2022, are primarily related to increases in U.S.

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

treasury yields partially offset by a decrease in credit spreads used to value our Senior Notes since December 31, 2022.

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

Financial Instruments

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:

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

As of December 31,

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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.

We partially funded our Reata acquisition through available cash, cash equivalents and marketable securities.

As of December 31, 2023, we have sold all of our marketable debt securities.

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

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(In millions) Amortized

Marketable debt securities:

Corporate debt securities:

Current $ 936.2 $ — $ ( 4.9 ) $ 931.3

Non-current 305.3 0.1 ( 5.1 ) 300.3

Government securities:

Current 547.1 0.1 ( 5.0 ) 542.2

Non-current 271.4 — ( 3.3 ) 268.1

Mortgage and other asset backed securities:

Current — — — —

Non-current 139.1 0.1 ( 1.9 ) 137.3

Total marketable debt securities $ 2,199.1 $ 0.3 $ ( 20.2 ) $ 2,179.2

Marketable equity securities:

Marketable equity securities, current $ 31.6 $ — $ ( 21.0 ) $ 10.6

Marketable equity securities, non-current 948.3 — ( 542.1 ) 406.2

Total marketable equity securities $ 979.9 $ — $ ( 563.1 ) $ 416.8

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Marketable equity securities:

Marketable equity securities, current $ 33.9 $ 9.9 $ — $ 43.8

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Summary of Contractual Maturities:

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Fair Value Amortized

Cost Estimated

Fair Value Amortized

Due in one year or less $ 1,473.5 $ 1,483.3

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

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.

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

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Proceeds from Marketable Debt Securities

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Realized losses 18.4 12.6 4.0

Realized losses for the year ended December 31, 2022, 2021 and 2020, primarily relate to sales of corporate bonds, agency mortgage-backed securities and other asset-backed securities.

Realized losses for the year ended December 31, 2023, primarily relate to sales of U.S.

treasuries and corporate bonds.

Realized losses for the years ended December 31, 2022 and 2021, primarily relate to sales of corporate bonds, agency mortgage-backed securities and other asset-backed securities.

During the third quarter of 2023 we sold all of our marketable debt securities and used the proceeds to partially fund our acquisition of Reata.

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

Strategic Investments

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

As of December 31, 2023, our strategic investment portfolio was comprised of investments totaling $ 460.7 million which are included in other current assets and investments and other assets in our consolidated balance sheets.

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, 2022, was primarily due to a decrease in the fair value of our investments in Denali and Sangamo common stock.

The decrease in our strategic investment portfolio for the year ended December 31, 2023, was primarily due to the decrease in the fair value of our investments in Denali, Sangamo and Sage common stock.

Additionally, during 2023 we sold a portion of our Sangamo and Denali common stock and the remainder of our Ionis 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.

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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

Foreign currency forward contracts and foreign currency options in effect as of December 31, 2023 and 2022, had durations of 1 to 12 months.

These contracts have been designated as cash flow hedges and unrealized gains and losses on the portion of these foreign currency forward contracts and foreign currency options that are included in the effectiveness test are reported in AOCI.

Realized gains and losses of such contracts and options are recognized in revenue when the sale of product in the currency being hedged is recognized and in operating expense when the expense in the currency being hedged is recorded.

We recognize all cash flow hedge reclassifications from AOCI and fair value changes of excluded portions in the same line item in our consolidated statements of income that have been impacted by the hedged item.

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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 have been impacted by the hedged item.

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

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British pound — 162.8

Japanese yen — 72.7

Swiss franc — —

Canadian dollar — 57.2

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 and foreign currency options that were included in accumulated other comprehensive income (loss) in total equity is summarized as follows:

Total foreign currency forward contracts and options $ 1,169.0 $ 1,715.5

The pre-tax portion of the fair value of these foreign currency forward contracts and foreign currency options that were included in AOCI in total equity is summarized as follows:

For the Years Ended December 31,

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Net unrealized gains (losses) $ ( 34.8 ) $ 8.6 $ 53.8

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 expect the net unrealized losses of approximately $ 34.8 million to be settled over the next 12 months, with any amounts in AOCI to be reported as an adjustment to revenue or operating expense.

We consider the impact of our and our counterparties’ credit risk on the fair value of the contracts as well as the ability of each party to execute its contractual obligations.

As of December 31, 2022 and 2021, credit risk did not materially change the fair value of our foreign currency forward contracts.

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

As of December 31, 2023 and 2022, credit risk did not materially change the fair value of our foreign currency forward contracts and forward currency options.

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

For the Years Ended December 31,

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Operating expense 3.7 ( 5.5 ) ( 0.8 ) Operating expense — — —

Interest Rate Contracts - Hedging Instruments

We have entered into interest rate lock contracts or interest rate swap contracts on certain borrowing transactions to manage our exposure to interest rate changes and to reduce our overall cost of borrowing.

Interest Rate Swap Contracts

In connection with the issuance of our 2.90 % Senior Notes due September 15, 2020, we entered into interest rate swaps with an aggregate notional amount of $ 675.0 million, which were originally set to expire on September 15, 2020.

The interest rate swap contracts were designated as hedges of the fair value changes in our 2.90 % Senior Notes attributable to changes in interest rates.

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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net Investment Hedges - Hedging Instruments

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In June 2018 we exercised our option under our joint venture agreement 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.

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.

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

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

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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.

Upon completing this sale, the cumulative gains on our net investment hedges of $ 57.0 million were reclassified from AOCI 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 the year ended December 31, 2022.

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).

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 as of December 31, 2021.

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 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 as of December 31, 2021.

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 AOCI.

The pre-tax portion of the fair value of these foreign currency forward contracts that were included in AOCI in total equity reflected net gains of $ 10.6 million as of December 31, 2021.

We excluded fair value changes related to the forward rate from our hedging relationship and amortized the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 AOCI in total equity reflected net losses of $ 3.6 million as of December 31, 2021.

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

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The aggregate notional amount of these outstanding foreign currency forward contracts was $ 1,301.5 million and $ 1,238.8 million as of December 31, 2023 and 2022, 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.

Net gains of $ 3.8 million, net losses of $ 34.7 million and net losses of $ 43.3 million related to these contracts were recorded as a component of other (income) expense, net for the years ended December 31, 2023, 2022 and 2021, 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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Asset derivative instruments Other current assets $ 0.3 $ 37.9

Investments and other assets — 5.5

Liability derivative instruments Accrued expense and other 26.5 18.4

Net Investment Hedging Instruments:

Asset derivative instruments Other current assets — 4.1

Other Derivative Instruments:

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Liability derivative instruments Accrued expense and other 5.1 7.6

(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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Property, Plant and Equipment

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Solothurn, Switzerland Manufacturing Facility

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 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.

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

This facility includes 393,000 square feet related to a large-scale biologics manufacturing facility, 290,000 square feet of warehouse, utilities and support space and 51,000 square feet of administrative space.

As of December 31, 2023 and 2022, we had approximately $ 728.8 million and $ 711.1 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)

LEQEMBI by the FDA.

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

In the second quarter of 2021 a portion of this facility (the first manufacturing suite) received a GMP multi-product license from the SWISSMEDIC, resulting in approximately $ 1.2 billion of fixed assets being placed into service during the second quarter of 2021.

The second manufacturing suite became operational in January 2024, resulting in approximately $ 710.7 million of fixed assets being placed into service during the first quarter of 2024.

Solothurn has been approved for the manufacture of ADUHELM and LEQEMBI by the FDA.

125 Broadway Building Sale

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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 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 .

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

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

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.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

All of our leases qualify as operating leases.

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Net lease cost $ 140.3 $ 95.6 $ 97.9

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Variable lease cost primarily related to operating expense, taxes and insurance associated with our operating leases.

As these costs are generally variable in nature, they are not included in the measurement of the operating lease asset and related lease liability.

The minimum lease payments for the next five years and thereafter is expected to be as follows:

The minimum lease payments for the next five years and thereafter are expected to be as follows:

(In millions) As of December 31, 2023

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Weighted average discount rate 4.5 % 3.7 %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Supplemental disclosure of cash flow information related to our operating leases included in cash flow provided by operating activities in our consolidated statements of cash flow is as follows:

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Operating lease assets obtained in exchange for lease obligations 146.0 108.3 18.1

6100 Legacy Drive Lease

In connection with our acquisition of Reata we assumed responsibility for a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas, with an initial lease term of 16 years.

Included in our estimate of the market rental rate is the value of any leasehold improvements or tenant allowances related to the building.

We do not intend to occupy this building and are evaluating opportunities to sublease the property.

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

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.

In connection with the sale of our 125 Broadway building during the third quarter of 2022, 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 a new lease liability and right-of-use asset 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.

For additional information on the sale of our 125 Broadway 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.

In September 2022 we entered into an agreement to partially terminate a portion of our lease located at 300 Binney Street, 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.

The transaction was treated as a lease modification as of the effective date and resulted in the derecognition of a right-of-use asset of approximately $ 47.4 million and a lease liability 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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Current portion:

3.625 % Senior Notes due September 15, 2022 (1)

Current portion of notes payable $ — $ 999.1

2023 Term Loan 364-day tranche (1)

Current portion of notes payable and term loan $ 150.0 $ —

Non-current portion:

2023 Term Loan three-year tranche (1)

4.050 % Senior Notes due September 15, 2025

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3.250 % Senior Notes due February 15, 2051

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

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

Non-current portion of notes payable and term loan $ 6,788.2 $ 6,281.0

As of December 31, 2023, we were in compliance with our senior note covenants and term loan covenants.

2023 Term Loan Credit Agreement

In connection with our acquisition of Reata in September 2023 we entered into a $ 1.5 billion term loan credit agreement (2023 Term Loan).

On the closing date of the Reata acquisition we drew $ 1.0 billion from the 2023 Term Loan, comprised of a $ 500.0 million floating rate 364-day tranche and a $ 500.0 million floating rate three-year tranche.

The remaining unused commitment of $ 500.0 million was terminated.

During the fourth quarter of 2023 we repaid $ 350.0 million of the 364-day tranche.

As of December 31, 2023, we had $ 650.0 million outstanding under the 2023 Term Loan, of which $ 150.0 million was outstanding under the 364-day tranche and $ 500.0 million was outstanding under the three-year tranche.

2021 Exchange Offer

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This charge, which was recognized in interest expense in other (income) expense, net in our consolidated statements of income for the year ended December 31, 2021, reflects the payment of an early call premium and the write-off of the remaining unamortized original debt issuance costs and discount balances associated with such 2045 Senior Notes.

Upon settlement, we also made aggregate cash payments of approximately $ 13.8 million to settle all accrued and unpaid interest from the last interest payment date on our 2045 Senior Notes that were exchanged or redeemed.

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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Our 2020 Senior Notes contain a change-of-control provision that, under certain circumstances, may require us to purchase our 2020 Senior Notes at a price equal to 101.0 % of the principal amount plus accrued and unpaid interest to the date of repurchase.

We incurred approximately $ 24.4 million of costs associated with this offering, which have been recorded as a reduction to the carrying amount of the debt on our consolidated balance sheet.

These costs will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity.

The discounts will be amortized as additional interest expense over the period from issuance through maturity using the effective interest rate method.

The original costs associated with this offering of approximately $ 24.4 million have been recorded as a reduction to the carrying amount of the debt in our consolidated balance sheets.

These costs along with the discounts will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity.

Interest on our 2020 Senior Notes is payable May 1 and November 1 of each year, commencing November 1, 2020.

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

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.

These costs along with the discounts will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity.

Our 2015 Senior Notes are senior unsecured obligations and may be redeemed at our option at any time at 100.0 % of the principal amount plus accrued interest and a specified make-whole amount.

Our 2015 Senior Notes contain a change of control provision that may require us to purchase the notes at a price equal to 101.0 % of the principal amount plus accrued and unpaid interest to the date of purchase under certain circumstances.

On September 15, 2015, we issued $ 1.5 billion aggregate principal amount of 2.90 % Senior Notes due September 15, 2020, at 99.792 % of par.

Our 2.90 % Senior Notes were senior unsecured obligations.

In connection with the 2.90 % Senior Notes, we entered into interest rate swap contracts where we received a fixed rate and paid a variable rate.

In May 2020 we used the net proceeds from the sale of our 2020 Senior Notes to redeem our 2.90 % Senior Notes prior to their maturity and recognized a net pre-tax charge of $ 9.4 million upon the extinguishment of these notes.

This charge, which was recognized in interest expense in other (income) expense, net in our consolidated statements of income for the year ended December 31, 2020, reflects the payment of a $ 12.7 million early call premium and the write off of remaining unamortized original debt issuance costs and discount balances, partially offset by a $ 3.3 million gain related to the settlement of the associated interest rate swap contracts.

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

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.

These costs along with the discounts will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity.

3.625% Senior Notes due September 15, 2022

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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

2020 Revolving Credit Facility

In January 2020 we entered into a $ 1.0 billion, five-year senior unsecured revolving credit facility under which we are permitted to draw funds for working capital and general corporate purposes.

The terms of the revolving credit facility include a financial covenant that requires us not to exceed a maximum consolidated leverage ratio.

This revolving credit facility replaced the revolving credit facility that we entered into in August 2015.

The terms of the revolving credit facility

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

include a financial covenant that requires us not to exceed a maximum consolidated leverage ratio.

As of December 31, 2023, we had no outstanding borrowings and were in compliance with all covenants under this facility.

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2029 and thereafter 4,817.3

Total debt $ 6,567.3

Total current and non-current debt

debt discount and issuance fees ( 279.1 )

Total long-term debt $ 6,281.0

Total current and non-current debt, net

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

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Share Repurchases

In October 2020 our Board of Directors authorized a program to repurchase up to $ 5.0 billion of our common stock (2020 Share Repurchase Program).

In October 2020 our Board of Directors authorized our 2020 Share Repurchase Program, which is a program to repurchase up to $ 5.0 billion of our common stock.

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

All 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

Under our 2020 Share Repurchase Program, we repurchased and retired approximately 3.6 million and 6.0 million shares of our common stock at a cost of approximately $ 750.0 million and $ 1.8 billion during the years ended December 31, 2022 and 2021 , respectively.

There were no share repurchases of our common stock during the year ended December 31, 2023.

Approximately $ 2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2023.

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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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.

In December 2019 our Board of Directors authorized a program to repurchase up to $ 5.0 billion of our common stock (December 2019 Share Repurchase Program), which was completed as of September 30, 2020.

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

Under our December 2019 Share Repurchase Program, we repurchased and retired approximately 16.7 million shares of our common stock at a cost of approximately $ 5.0 billion during the year ended December 31, 2020.

In March 2019 our Board of Directors authorized a program to repurchase up to $ 5.0 billion of our common stock (March 2019 Share Repurchase Program), which was completed as of March 31, 2020.

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 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.

In August 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.

While we have historically made discretionary share repurchases, we had no share repurchases of our common stock during the year ended December 31, 2023.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in accumulated other comprehensive income (loss), net of tax by component:

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

December 31, 2023

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

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

Other comprehensive income (loss) before reclassifications 2.3 ( 26.8 ) ( 1.5 ) 37.1 11.1

Amounts reclassified from AOCI 13.4 ( 13.3 ) — — 0.1

Net current period other comprehensive income (loss) 15.7 ( 40.1 ) ( 1.5 ) 37.1 11.2

Balance, December 31, 2023 $ — $ ( 25.0 ) $ ( 2.6 ) $ ( 126.1 ) $ ( 153.7 )

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 Hedges, Net of Tax (1)

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Other comprehensive income (loss) before reclassifications ( 23.5 ) 137.3 12.6 43.7 ( 83.1 ) 87.0

Amounts reclassified from accumulated other comprehensive income (loss) 10.0 ( 176.0 ) ( 38.1 ) — 58.9 ( 145.2 )

Amounts reclassified from AOCI 10.0 ( 176.0 ) ( 38.1 ) — 58.9 ( 145.2 )

Net current period other comprehensive income (loss) ( 13.5 ) ( 38.7 ) ( 25.5 ) 43.7 ( 24.2 ) ( 58.2 )

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Other comprehensive income (loss) before reclassifications ( 6.6 ) 178.2 33.4 21.5 ( 92.4 ) 134.1

Amounts reclassified from accumulated other comprehensive income (loss) 3.0 54.6 0.6 — — 58.2

Amounts reclassified from AOCI 3.0 54.6 0.6 — — 58.2

Net current period other comprehensive income (loss) ( 3.6 ) 232.8 34.0 21.5 ( 92.4 ) 192.3

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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 )

Other comprehensive income (loss) before reclassifications ( 9.3 ) ( 165.0 ) ( 30.7 ) ( 33.5 ) 92.9 ( 145.6 )

Amounts reclassified from accumulated other comprehensive income (loss) 6.5 ( 21.8 ) ( 2.9 ) — — ( 18.2 )

Net current period other comprehensive income (loss) ( 2.8 ) ( 186.8 ) ( 33.6 ) ( 33.5 ) 92.9 ( 163.8 )

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

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

(In millions) Amounts Reclassified from

Accumulated Other Comprehensive Income (Loss) Income Statement Location

The following table summarizes the amounts reclassified from AOCI:

(In millions) Amounts Reclassified from AOCI Income Statement Location

For the Years Ended December 31,

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

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

There were no share repurchases of our common stock during the year ended December 31, 2023.

For additional information on our share repurchase programs, please read Note 14, Equity , to these consolidated financial statements.

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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.

For additional information on our share repurchase programs, please read Note 14, Equity , to these consolidated financial statements.

Share-Based Payments

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$ 525.6 $ 215.1 $ 204.1

In connection with our acquisition of Reata in September 2023 we recognized Reata equity-based compensation expense, inclusive of employer taxes, of approximately $ 393.4 million attributable to the post-acquisition service period, of which $ 196.4 million was recognized as a charge to selling, general and administrative expense with the remaining $ 197.0 million as a charge to research and development expense within our consolidated statements of income for the year ended December 31, 2023 .

T hese amounts were associated with the accelerated vesting of stock options and RSUs previously granted to Reata employees that required no future services to vest.

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

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

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Time-vested restricted stock units 220.0 202.3 159.8

Cash settled performance units — — ( 1.7 )

Performance units — — ( 0.1 )

Performance stock units settled in stock 35.5 35.0 23.9

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Stock options 3.7 0.3 —

Reata equity awards (1)

Subtotal 668.4 273.6 258.8

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Share-based compensation expense included in total cost and expense $ 658.2 $ 264.3 $ 250.8

(1) Relates to the Reata equity-based compensation expense attributable to the post-acquisition service period, associated with the accelerated vesting of stock options and RSUs previously granted to Reata employees that required no future services to vest.

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

As of December 31, 2023, unrecognized compensation cost related to unvested share-based compensation was approximately $ 287.4 million, net of estimated forfeitures.

We expect to recognize the cost of these unvested awards over a weighted-average period of 1.8 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Share-Based Compensation Plans

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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

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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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Stock Options

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.

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

The fair value of the stock option grant is estimated as of the date of grant using a Black-Scholes option valuation model.

The estimated fair value of the stock option is then expensed over the options' vesting periods.

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

The outstanding stock 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

Tax benefit realized for stock options $ 2.9

Cash received from the exercise of stock options 0.7

Market Stock Units (MSUs)

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

December 31, 2023

Shares Weighted Average

Exercise Price

Weighted Average Remaining Contractual Term

Outstanding at December 31, 2022

81,000 $ 301.85 9.9 years

Forfeited — —

Outstanding at December 31, 2023

81,000 $ 301.85 8.9 years

Exercisable at December 31, 2023

27,000 $ 301.85 8.9 years

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Market Stock Units

MSUs awarded to employees prior to 2014 vested in four equal annual increments beginning on the first anniversary of the grant date.

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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.

MSUs granted in 2021 had a weighted average grant date fair value of $ 358.77 .

The following table summarizes our MSU activity:

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The assumptions used in our valuation are summarized as follows:

For the Years Ended December 31,

December 31, 2021

Expected dividend yield — %

Range of expected stock price volatility 54.8 % - 61.6 %

37.8 % - 44.1 %

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

1.41 % - 1.48 %

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

$ 257.83 - $ 325.40

Weighted-average per share grant date fair value $ 358.77

The fair values of MSUs vested in 2023, 2022 and 2021 totaled $ 20.7 million, $ 18.8 million and $ 22.5 million, respectively.

Cash Settled Performance Units (CSPUs)

CSPUs awarded to employees vest in three equal annual increments beginning on the first anniversary of the grant date.

The vesting of these awards is subject to the respective employee’s continued employment with such awards settled in cash.

The number of CSPUs granted represents the target number of units that are eligible to be earned based on the attainment of certain performance measures established at the beginning of the performance period, which ends on December 31 of each year.

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

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

CSPUs are classified as liability awards and will be settled in cash 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.

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

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

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

Performance-vested Restricted Stock Units (PUs)

PUs are granted to certain employees in the form of RSUs that may be settled in cash or shares of our common stock at the sole discretion of the Compensation and Management Development Committee of our Board of Directors.

These awards are structured and accounted for the same way as the CSPUs, and vest in three equal annual increments beginning on the first anniversary of the grant date.

The number of PUs granted represents the target number of units that are eligible to be earned based on the attainment of certain performance measures established at the beginning of the performance period, which ends on December 31 of each year.

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

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

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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 were settled in cash totaling $ 3.4 million.

Performance Stock Units (PSUs)

Performance Stock Units

PSUs Settled in Stock

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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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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.

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

PSUs settled in stock granted in 2022 and 2021 had weighted average grant date fair values of $ 294.43 and $ 276.61 , respectively.

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

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The assumptions used in our valuation are summarized as follows:

December 31, 2022

For the Years Ended December 31,

Expected dividend yield — %

Range of expected stock price volatility 44.7 %

44.0 % - 45.9 %

Range of risk-free interest rates 4.1 %

1.8 % - 3.9 %

30 calendar day average stock price on grant date $ 283.93

$ 231.31 - $ 294.86

Weighted-average per share grant date fair value $ 383.61

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

The fair values of PSUs settled in stock that vested in 2023, 2022 and 2021 totaled $ 28.6 million, $ 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

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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.

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.

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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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.

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

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Unvested at December 31, 2023 41,000

(1) PSUs settled in cash granted in 2022 include awards granted in conjunction with our annual awards made in February 2022 and PSUs granted in conjunction with the hiring of employees.

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

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)

(1) PSUs settled in cash granted in 2023 represent the adjustment recorded to reflect the total number of units earned based on the finalization of the related performance multiplier for awards previously granted in 2020.

The fair values of PSUs settled in cash that vested in 2023, 2022 and 2021 totaled $ 11.7 million, $ 11.0 million and $ 9.9 million, respectively.

Time-Vested Restricted Stock Units

RSUs awarded to employees generally vest no sooner than one-third per year over three years on the anniversary of the date of grant, or upon the third anniversary of the date of the grant, provided the employee remains continuously employed with us, except as otherwise provided in the plan.

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The fair values of RSUs vested in 2023, 2022 and 2021 totaled $ 232.1 million, $ 116.3 million and $ 132.2 million, respectively.

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Employee Stock Purchase Plan (ESPP)

Employee Stock Purchase Plan

In June 2015 our shareholders approved the 2015 ESPP.

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Cash received under the 2015 ESPP $ 45.1 $ 44.2 $ 54.4

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Income Tax Expense

Income before income tax expense and the income tax expense consist of the following:

Income before income tax (benefit) expense and the income tax (benefit) expense consist of the following:

For the Years Ended December 31,

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The Tax Cuts and Jobs Act of 2017 eliminated the deferral of U.S.

income tax on the historical unrepatriated earnings by imposing the one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings (the Transition Toll Tax).

income tax on the historical unrepatriated earnings by imposing the one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings.

The Transition Toll Tax was assessed on our share of our foreign corporations' accumulated foreign earnings that were not previously taxed.

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Of the amounts accrued as of December 31, 2023, approximately $ 185.4 million is expected to be paid within one year.

The Transition Toll Tax will be paid in installments over an eight--year period, which started in 2018, and will not accrue interest.

The Transition Toll Tax is being paid in installments over an eight--year period, which started in 2018, and will not accrue interest.

Unremitted Earnings

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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, 2022, primarily arising through the impacts of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

purchase accounting.

Other than for earnings, we are permanently reinvested for book/tax basis differences of approximately $ 1.5 billion as of December 31, 2023, primarily arising through the impacts of purchase accounting.

These permanently reinvested basis differences could reverse through sales of the foreign subsidiaries, as well as various other events, none of which were considered probable as of December 31, 2023.

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tax liability, if these differences reverse, would be between $ 300.0 million and $ 400.0 million as of December 31, 2023.

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.

and reduced the net value of certain deferred tax assets by approximately $ 1.7 billion and reduced the net value of deferred tax liabilities associated with GILTI and tax credits by approximately $ 1.6 billion.

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.

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.

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Deferred Tax Assets and Liabilities

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Deferred tax liabilities:

Purchased intangible assets $ ( 76.1 ) $ ( 256.6 )

Purchased inventory valuation step-up and intangible assets

$ ( 1,257.4 ) $ ( 76.1 )

Samsung Bioepis investment installments ( 35.5 ) ( 138.0 )

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Total deferred tax liabilities $ ( 2,645.5 ) $ ( 1,696.6 )

The change in the valuation allowance between December 31, 2022 and 2021, was primarily related to the establishment of a valuation allowance against the deferred tax asset related to Neurimmune SubOne AG's (Neurimmune) tax basis in ADUHELM, as discussed below, and the adjustment of a valuation against certain deferred tax assets, the realization of which is dependent on future sales of TECFIDERA in the U.S., as discussed above.

As of December 31, 2023, 2022, 2021 and 2020, we had a valuation allowance of $ 1,278.7 million, $ 2,003.3 million, $ 1,961.3 million and $ 1,753.9 million, respectively, related to net operating losses in Switzerland and Neurimmune's tax basis in ADUHELM.

The change in the valuation allowance between December 31, 2023 and 2022, was primarily driven by a reduction of approximately $ 470.3 million related to the elimination of Neurimmune's tax basis in ADUHELM as a result of its deconsolidation and reduction of approximately $ 230.3 million due to movements in net operating loss deferred tax assets in Switzerland.

The net income tax impact of the changes in the valuation allowance was an expense of approximately $ 7.4 million for the year ended December 31, 2023.

The change in the valuation allowance between December 31, 2022 and 2021, and between December 31, 2021 and 2020, was primarily driven by additions of $ 85.0 million and $ 390.0 million, respectively, related to Neurimmune's tax basis in ADUHELM.

For additional information on the deconsolidation and our collaboration arrangement with Neurimmune, please read Note 20, Investments in Variable Interest Entities , to these consolidated financial statements.

In addition to deferred tax assets and liabilities, we have recorded deferred charges related to intra-entity sales of inventory.

As of December 31, 2023 and 2022, the total deferred charges were $ 69.3 million and $ 56.6 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Inflation Reduction Act

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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.

The provisions of the IRA are effective for periods after December 31, 2022.

The IRA did not result in any material adjustments to our income tax provision or income tax balances as of December 31, 2023 and 2022.

Preliminary guidance has been issued by the IRS and we expect additional guidance and regulations to be issued in future periods.

We will continue to assess its potential impact on our business and results of operations as further information becomes available.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A reconciliation between the U.S.

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Tax credits ( 7.3 ) ( 1.7 ) ( 3.8 )

Purchased intangible assets 0.3 ( 1.6 ) 0.7

TECFIDERA impairment — — 1.8

Purchased inventory valuation step-up and intangible assets

0.7 0.3 ( 1.6 )

GILTI ( 0.6 ) 0.7 1.3

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Internal reorganization ( 0.1 ) ( 1.4 ) —

Other ( 0.8 ) 1.1 ( 1.2 )

Other, including permanent items 1.5 ( 0.8 ) 1.1

Effective tax rate 10.4 % 17.6 % 3.0 %

Changes in Tax Rate

For the year ended December 31, 2023, compared to 2022, the decrease in our effective tax rate was driven by the impact of the non-cash changes in the value of our equity investments, the impact of Fit for Growth related expenses and Reata acquisition-related expenses, as well as the combined net unfavorable tax rate impacts in 2022 related to a litigation settlement agreement, the sale of our equity interest in Samsung Bioepis, the impact of a Neurimmune valuation allowance, as discussed below, and an international reorganization to align with global tax developments.

The change also benefits from the resolution of an uncertain tax matter during the first quarter of 2023 related to tax credits.

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.

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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.

market, the tax impacts of the BIIB111 and BIIB112 impairment charges and the impact of the non-cash tax effects of changes in the value of our equity investments, where we recorded net unrealized losses in 2021 and net unrealized gains in 2020.

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.

For additional information on our acquisition of Reata, please read Note 2, Acquisitions , 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.

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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.

These adjustments to our net deferred tax asset were 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.

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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.

During the fourth quarter of 2023 Neurimmune was deconsolidated from our consolidated financial statements.

Tax Attributes

As of December 31, 2023, 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.

federal income tax purposes of approximately $ 141.8 million that begin to expire in 2030 and net operating losses of approximately $ 913.1 million that do not expire.

state income tax purposes, we had research and investment credit carry forwards of approximately $ 140.5 million that begin to expire in 2027 and net operating losses of approximately $ 21.0 million that begin to expire in 2036.

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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.

We and our subsidiaries are routinely examined by various taxing authorities.

As of December 31, 2022, the unrecognized tax benefits related to Neurimmune was approximately $ 450.0 million.

During the year ended December 31, 2023, we decreased our gross unrecognized tax benefits by approximately $ 450.0 million related to this item as a result of the deconsolidation of Neurimmune.

We file income tax returns in various U.S.

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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.

Included in the balance of unrecognized tax benefits as of December 31, 2023, 2022 and 2021, are $ 147.6 million, $ 134.0 million and $ 87.5 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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

We recognize potential interest and penalties related to unrecognized tax benefits in income tax expense.

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We have accrued $ 30.2 million and $ 25.2 million for the payment of interest and penalties as of December 31, 2023 and 2022, respectively.

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.

It is reasonably possible that we will adjust the value of our uncertain tax positions related to certain transfer pricing, collaboration matters, withholding taxes and other issues as we receive additional information from various taxing authorities, including reaching settlements with such authorities.

We estimate that it is reasonably possible that our gross unrecognized tax benefits, exclusive of interest, could decrease by up to approximately $ 20.0 million in the next 12 months as a result of various audit closures, settlements and expiration of the statute of limitations.

Other Consolidated Financial Statement Detail

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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.

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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.

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The following table summarizes our (gains) losses on investments, net that relates to our equity securities held as of December 31, 2023, 2022 and 2021:

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Net (gains) losses realized on equity securities 5.2 — ( 10.3 )

Unrealized (gains) losses recognized on equity securities $ 264.7 $ 831.4 $ ( 681.8 )

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.

Net unrealized (gains) losses recognized on equity securities $ 270.0 $ 264.7 $ 831.4

The net unrealized losses recognized during the year ended December 31, 2023, primarily reflect a decrease in the aggregate fair value of our investments in Sage, Denali, Sangamo and Ionis common stock of approximately $ 248.5 million.

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, partially offset by an increase in the fair value of Ionis and Sage common stock of approximately $ 27.3 million.

Accrued Expense and Other

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Royalties and licensing fees 191.5 209.4

Reata acquisition-related accrued expense 117.5 —

Other 838.4 746.9

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OCREVUS for the treatment of PPMS and RMS;

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;

LUNSUMIO for the treatment of relapsed or refractory follicular lymphoma;

COLUMVI, a bispecific antibody for the treatment of non-Hodgkin's lymphoma, which was granted accelerated approval by the FDA during the second quarter of 2023;

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.

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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.

has impacted our percentage of the co-promotion profits for RITUXAN and LUNSUMIO, as summarized in the table below.

If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to GAZYVA in exchange for the continued payment of the current compensation payable for GAZYVA under the collaboration arrangement until the 11 year anniversary of the first commercial sale of GAZYVA in the U.S.

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.

The commercialization of OCREVUS does not impact the percentage of the co-promotion profits we receive for RITUXAN or GAZYVA.

The commercialization of OCREVUS does not impact the percentage of the co-promotion profits we receive for RITUXAN, LUNSUMIO or GAZYVA.

Genentech is solely responsible for development and commercialization of OCREVUS and funding future costs.

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only, until the 11 year anniversary of the first commercial sale of OCREVUS in the U.S.

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LUNSUMIO (mosunetuzumab)

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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.

For the year ended December 31, 2023, we began to record our share of LUNSUMIO development and sales and marketing expense as a reduction of our share of pre-tax profits in revenue from anti-CD20 therapeutic programs within our consolidated statements of income.

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.

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In December 2022 LUNSUMIO was granted accelerated approval by the FDA for the treatment of relapsed or refractory follicular lymphoma.

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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.

COLUMVI (glofitamab)

In December 2022 we entered into an agreement with Genentech related to the commercialization and sharing of economics for COLUMVI, a bispecific antibody for the treatment of B-cell non-Hodgkin's lymphoma, which was subsequently granted accelerated approval by the FDA in June 2023.

Under the terms of this agreement, we will have no payment obligations.

Genentech will have sole decision-making rights on the commercialization of COLUMVI within the U.S.

and we will receive tiered royalties in the mid-single digit range on net sales of COLUMVI in the U.S.

The commercialization of COLUMVI does not impact the percentage of the co-promotion profits we receive for RITUXAN, LUNSUMIO or GAZYVA.

If we undergo a change in control, as defined in our collaboration agreement, Genentech will be deemed to have purchased our rights to COLUMVI in exchange for a mid-single digit royalty on net sales (as defined in our collaboration agreement) in the U.S.

only, until the 11 year anniversary of the first commercial sale of the product in the U.S.

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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.

gross sales of LUNSUMIO reach $ 350.0 million or (ii) January 1 of the calendar year following the calendar year in which the First Threshold Date occurs.

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In March 2023 the First Threshold Date was achieved.

As a result, beginning in April 2023 the pre-tax profit share for RITUXAN and LUNSUMIO was 35.0 %.

Our share of RITUXAN pre-tax profits in the U.S.

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The Second GAZYVA Threshold Date can be achieved regardless of whether GAZYVA has been approved in a non-CLL indication.

In March 2023 the Second GAZYVA Threshold Date was achieved.

As a result, beginning in April 2023 the pre-tax profit share for GAZYVA was 35.0 %.

Our share of GAZYVA pre-tax profits in excess of $ 50.0 million for the years ended December 31, 2022 and 2021, 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.

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Revenue from Anti-CD20 Therapeutic Programs

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

for RITUXAN and GAZYVA 547.0 647.7 1,080.2

for RITUXAN, GAZYVA and LUNSUMIO (1)

409.4 547.0 647.7

Other revenue from anti-CD20 therapeutic programs 14.0 17.2 19.1

Total revenue from anti-CD20 therapeutic programs $ 1,689.6 $ 1,700.5 $ 1,658.5

(1) LUNSUMIO became commercially available in the U.S.

during the first quarter of 2023.

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.

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Ionis Pharmaceuticals, Inc.

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.

In January 2012 we entered into a collaboration and license agreement with Ionis pursuant to which we have an exclusive, worldwide license to develop and commercialize SPINRAZA for the treatment of SMA.

Under our agreement with Ionis, we make royalty payments to Ionis on annual worldwide net sales of SPINRAZA using a tiered royalty rate between 11.0 % and 15.0 %, which are recognized in cost of sales within our consolidated statements of income.

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2018 Ionis Agreement

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.

In June 2018 we entered into a 10-year exclusive collaboration agreement with Ionis to develop novel ASO drug candidates for a broad range of neurological diseases for a total payment of $ 1.0 billion, consisting of an upfront payment of $ 375.0 million and the purchase of approximately 11.5 million shares of Ionis common stock at a cost of $ 625.0 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

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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.

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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.

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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 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.

In December 2018 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize QALSODY (tofersen), for the treatment of ALS with SOD1 mutations.

Following the option exercise, we are solely responsible for the costs and expense related to the development, manufacturing and commercialization of QALSODY.

We may pay post-licensing milestone payments to Ionis of up to $ 55.0 million based on the successful achievement of certain regulatory and commercial milestones.

In April 2023 the FDA approved QALSODY for the treatment of ALS in adults who have a mutation in the SOD1 gene.

This indication is approved under accelerated approval based on reduction in plasma neurofilament light chain observed in patients treated with QALSODY.

Continued approval for this indication may be contingent upon verification of clinical benefit in confirmatory trial(s).

Under this agreement, we make royalty payments to Ionis on annual worldwide net sales of QALSODY using a tiered royalty rate between 11.0 % and 15.0 %, which are recognized in cost of sales within our consolidated statements of income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the year ended December 31, 2023, we incurred a milestone payment of $ 16.0 million to Ionis following the FDA's approval of QALSODY, which was recorded within intangible assets, net in our consolidated balance sheets.

We may pay Ionis an additional milestone of $ 20.0 million if QALSODY receives regulatory approval in the E.U.

During the years ending December 31, 2022 and 2021, we incurred milestones of $ 17.0 million and $ 10.0 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.

2012 Ionis Agreement

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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)

Eisai Co., Ltd.

During the first quarter of 2023 we accrued a $ 31.0 million payable to Eisai related to the termination of an agreement whereby Eisai co-promoted or distributed our MS products in certain Asia-Pacific markets and settings.

As of December 31, 2023, we paid approximately $ 16.0 million of the $ 31.0 million payable.

The remaining portion was subsequently paid in January 2024.

This termination fee is included in selling, general and administrative expense in our consolidated statements of income for the year ended December 31, 2023.

LEQEMBI (lecanemab) Collaboration

We have a collaboration agreement with Eisai to jointly develop and commercialize LEQEMBI (lecanemab), an anti-amyloid antibody for the potential treatment of Alzheimer's disease (the LEQEMBI Collaboration).

We have a collaboration agreement with Eisai to jointly develop and commercialize LEQEMBI (lecanemab), an anti-amyloid antibody for the treatment of Alzheimer's disease (the LEQEMBI Collaboration).

Eisai serves as the lead of LEQEMBI development and regulatory submissions globally with both companies co-commercializing and co-promoting the product, and Eisai having final decision-making authority.

All costs, including research, development, sales and marketing expense, are shared equally between us and Eisai.

Upon LEQEMBI marketing approval, we and Eisai will co-promote LEQEMBI and share profits and losses equally.

We and Eisai co-promote LEQEMBI and share profits and losses equally.

We currently manufacture LEQEMBI drug substance and drug product and in March 2022 we extended our supply agreement with Eisai related to LEQEMBI from five years to ten years for the manufacture of LEQEMBI drug substance.

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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).

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On March 14, 2022, we amended our ADUHELM Collaboration Agreement with Eisai.

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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.

In July 2023 the FDA granted traditional approval of LEQEMBI.

Prior to receiving traditional approval, LEQEMBI had been granted accelerated approval by the FDA in January 2023, at which time it became commercially available in the U.S.

Additionally, in September 2023 the Japanese Ministry of Health, Labor and Welfare approved LEQEMBI in Japan, which was subsequently launched in Japan in December 2023.

Upon commercialization of LEQEMBI, we began recognizing our 50.0 % share of LEQEMBI product revenue, net and cost of sales, including royalties, within other revenue in our consolidated statements of income, as we are not the principal.

Our share of LEQEMBI sales and marketing expense and development expense are recorded within selling, general and administrative expense and research and development expense, respectively, within our consolidated statements of income.

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

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ADUHELM Collaboration Agreement

The LEQEMBI Collaboration also provided Eisai with an option to jointly develop and commercialize ADUHELM (aducanumab) (ADUHELM 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 (the ADUHELM Collaboration Agreement).

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On March 14, 2022, we amended our ADUHELM Collaboration Agreement with Eisai.

In March 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.

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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:

For the Years Ended December 31,

A summary of development expense, sales and marketing expense and milestone payments related to our initial ADUHELM Collaboration Agreement is as follows:

For the Year Ended December 31,

(In millions) 2022 2021

Total ADUHELM development expense $ 149.4 $ 183.7 $ 152.0

Total ADUHELM Collaboration development expense $ 149.4 $ 183.7

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

Total ADUHELM sales and marketing expense incurred by the ADUHELM Collaboration Agreement 134.2 562.3 353.0

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 sales and marketing expense incurred by the ADUHELM Collaboration 134.2 562.3

Biogen's share of the ADUHELM Collaboration sales and marketing expense reflected in selling, general and administrative expense and collaboration profit sharing/(loss reimbursement) in our consolidated statements of income 71.5 301.4

Total ADUHELM Collaboration third party milestones — 100.0

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

Biogen's share of reimbursement from Eisai of ADUHELM milestone payments reflected in collaboration profit sharing/(loss reimbursement) in our consolidated statements of income — 45

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.

Under our initial ADUHELM Collaboration Agreement, we recognized revenue on sales of ADUHELM in the U.S.

to third parties as a component of product revenue, net in our consolidated statements of income.

We also recorded the related cost of revenue and sales and marketing expense in our consolidated statements of income as these costs were incurred.

Payments made to and received from Eisai for its 45.0 % share of the co-promotion profits or losses in the U.S.

are recognized in collaboration profit (loss) sharing in our consolidated statements of income.

were recognized in collaboration profit sharing/(loss reimbursement) in our consolidated statements of income.

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.

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 sharing/(loss reimbursement) 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.

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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.

We 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 sharing/(loss reimbursement) 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 $ 1.4 million a nd $ 88.0 million as of December 31, 2023 and 2022, respectively.

Amounts payable to Eisai related to the agreements discussed above we re approximately $ 118.4 million a nd $ 81.2 million as of December 31, 2023 and 2022, respectively.

We have a collaboration agreement with UCB, effective November 2003, to jointly develop and commercialize dapirolizumab pegol, an anti-CD40L pegylated Fab, for the potential treatment of SLE and other future agreed

AND SUBSIDIARIES

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.

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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Biogen's share of the UCB collaboration development expense reflected in research and development expense in our consolidated statements of income 30.3 34.0 42.1

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.

In November 2017 we entered into an exclusive license and collaboration agreement with Alkermes Pharma Ireland Limited, a subsidiary of Alkermes, for VUMERITY, a novel fumarate for the treatment of RMS.

In October 2019 the FDA approved VUMERITY in the U.S.

for the treatment of RMS.

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.).

During the fourth quarter of 2021 VUMERITY was approved for the treatment of RRMS in certain international markets.

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.

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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.

In January 2023 we entered into a new supply agreement with Alkermes for FAMPYRA through January 2025.

In December 2023 Alkermes entered into a definitive agreement to sell its development and manufacturing facility to Novo Nordisk, which is expected to close in mid-2024.

Alkermes and Novo Nordisk plan to enter into subcontracting arrangements to continue work currently performed at the facility for a period of time after closing the transaction, which may continue through the end of 2025.

Acorda Therapeutics, Inc.

In June 2009 we entered into a collaboration and license agreement with Acorda Therapeutics, Inc.

(Acorda) to develop and commercialize products containing fampridine, such as FAMPYRA, in markets outside the U.S.

We are responsible for all regulatory activities and the future clinical development of related products in those markets.

In June 2009 we entered into a collaboration and license agreement with Acorda to develop and commercialize products containing fampridine, such as FAMPYRA, in markets outside the U.S.

Under this agreement, we pay tiered royalties based on the level of ex-U.S.

net sales and we may pay potential milestone payments based on the successful achievement of certain regulatory and commercial milestones, which would be capitalized as intangible assets upon achievement of the milestones and amortized utilizing an economic consumption model.

During the third quarter of 2020 we recognized a milestone of $ 15.0 million, which became due

net sales and we may pay potential milestone payments based on the successful achievement of certain regulatory and commercial milestones.

In January 2024 we notified Acorda of our decision to terminate our collaboration and license agreement, effective January 1, 2025.

As a result of this termination, Acorda will regain global commercialization rights to FAMPYRA.

For the years ended December 31, 2023, 2022 and 2021, total cost of sales related to royalties and commercial supply of FAMPYRA reflected in our consolidated statements of income were approximately $ 55.2 million, $ 46.1 million and $ 46.6 million, respectively.

AND SUBSIDIARIES

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 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 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.

In November 2020 we entered into a global collaboration and license agreement with Sage to jointly develop and commercialize ZURZUVAE (zuranolone) for the treatment of PPD and potential treatment of MDD and BIIB124 (SAGE-324) for the potential treatment of essential tremor with potential in other neurological conditions such as epilepsy.

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 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 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 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.

Both companies will share equal responsibility and costs for development as well as profits and losses for commercialization in the U.S.

We may 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.

In August 2023 the FDA approved ZURZUVAE for adults with PPD, pending DEA scheduling, which was completed in October 2023.

Upon approval, ZURZUVAE became the first and only oral, once-daily, 14-day treatment that can provide rapid improvements in depressive symptoms by day 15 for women with PPD.

ZURZUVAE for PPD became commercially available in the U.S.

during the fourth quarter of 2023.

Additionally, the FDA issued a CRL for the NDA for zuranolone in the treatment of adults with MDD.

The CRL stated that the application did not provide substantial evidence of effectiveness to support the approval of zuranolone for the treatment of MDD and that an additional study or studies would be needed.

We and Sage are continuing to seek feedback from the FDA and evaluating next steps.

Under this collaboration, both companies will share equal responsibility and costs for development as well as profits and losses for commercialization in the U.S.

Outside of the U.S., we are responsible for development and commercialization, excluding Japan, Taiwan and South Korea, with respect to zuranolone and may pay Sage potential tiered royalties in the high teens to low twenties.

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:

During the fourth quarter of 2023 we accrued a milestone payment due to Sage of $ 75.0 million upon the first commercial sale of ZURZUVAE for PPD in the U.S., which was recorded within intangible assets, net in our consolidated balance sheets, and subsequently paid in January 2024.

For the year ended December 31, 2023, we recognized net reductions to our operating expense of approximately $ 4.7 million to reflect Sage's 50.0 % share of net collaboration losses in the U.S., which is recognized in collaboration profit sharing/(loss reimbursement) in our consolidated statements of income.

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

For the Years Ended December 31,

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Biogen's share of the Sage collaboration development expense reflected in research and development expense in our consolidated statements of income 88.3 86.7 83.8

Total Sage sales and marketing expense incurred by the collaboration 109.9 36.4 —

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 —

Total sales and marketing expense incurred by the Sage collaboration 187.0 109.9 36.4

Biogen's share of the Sage collaboration sales and marketing expense reflected in selling, general and administrative expense and collaboration profit sharing/(loss reimbursement) in our consolidated statements of income 93.5 55.0 18.2

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Denali Therapeutics Inc.

In August 2020 we entered into a collaboration and license agreement with Denali to co-develop and co-commercialize Denali's small molecule inhibitors of leucine-rich repeat kinase 2 (LRRK2) for Parkinson's disease.

In addition to the LRRK2 program, we also have an exclusive option to license two preclinical programs from Denali’s Transport Vehicle platform, including its Antibody Transport Vehicle (ATV):

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 ATV-enabled therapeutics for indications within specific neurodegenerative diseases, should Denali decide to seek a collaboration for such programs.

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

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 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 as well as profits and losses for commercialization in the U.S.

We may pay Denali development and commercial milestone payments that could total up to approximately $ 1.1 billion if the milestones related to the LRRK2 Collaboration are achieved.

In April 2023 we exercised our option with Denali to license the ATV-enabled anti-amyloid beta program.

In connection with this exercise, we assumed responsibility for all development and commercial activities and associated expenses related to this program.

In addition, we made a one-time option exercise payment to Denali and, should certain milestones be achieved, may pay Denali additional development and commercial milestone payments and royalties based on future net sales.

Our agreement with Denali was amended in August 2023, whereby certain milestone criteria were changed, while the total amount of development, regulatory and commercial milestones remains the same.

In addition, we agreed to waive our option right to the second option program.

Under the LRRK2 Collaboration, both companies share responsibility and costs for global development based on specified percentages as well as profits and losses for commercialization in the U.S.

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:

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

For the Years Ended December 31,

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Sangamo Therapeutics, Inc.

In February 2020 we entered into a collaboration and license agreement with Sangamo to develop and commercialize ST-501 for tauopathies, including Alzheimer's disease;

ST-502 for synucleinopathies, including Parkinson’s disease;

a third neuromuscular disease target;

and up to nine additional neurological disease targets to be identified and selected within a five-year period.

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 February 2020 we entered into a collaboration and license agreement with Sangamo to pursue certain neurological targets 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 within our consolidated statements of income for the year ended December 31, 2020.

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 specified milestones set forth in this collaboration are achieved.

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)

A summary of development expense related to this collaboration is as follows:

These restrictions have now lapsed.

In March 2023 we terminated our collaboration and license agreement with Sangamo.

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

For the Years Ended December 31,

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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 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 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In February 2023 we terminated our collaboration and license agreement with InnoCare for orelabrutinib, for the potential treatment of MS.

Other Research and Discovery Arrangements

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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.

In April 2022 we completed the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics.

In April 2022 we completed the sale of our 49.9 % equity interest in Samsung Bioepis to Samsung BioLogics in exchange for total consideration of approximately $ 2.3 billion.

Under the terms of this transaction, we received approximately $ 1.0 billion in cash at closing, with approximately $ 1.3 billion in cash to be deferred over two payments.

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)

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.

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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.

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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.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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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.

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.

During the third quarter of 2021 we accrued $ 15.0 million in milestone payments related to the approval of BYOOVIZ in the U.S., the E.U.

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We may also pay Samsung Bioepis up to approximately $ 180.0 million in additional development, regulatory and sales-based milestones.

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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2013 Commercial Agreement

In December 2013 we entered into an agreement with Samsung Bioepis to commercialize, over a 10-year term, 3 anti-tumor necrosis factor (TNF) biosimilar product candidates in Europe and in the case of BENEPALI, Japan.

As discussed above, we have an option to extend this agreement by an additional five years .

Under this agreement, we have made upfront and clinical development milestone payments totaling $ 46.0 million, which were recorded as research and development expense in our consolidated statements of income as the programs they relate to had not achieved regulatory approval.

We also agreed to make additional milestone payments of $ 25.0 million upon regulatory approval in the E.U.

for each of the three anti-TNF biosimilar product candidates.

IMRALDI, an adalimumab biosimilar referencing HUMIRA, FLIXABI, an infliximab biosimilar referencing REMICADE, and BENEPALI, an etanercept biosimilar referencing ENBREL, received regulatory approval in the E.U.

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 December 2013 we entered into an agreement with Samsung Bioepis to commercialize, over a 10-year term, 3 anti-TNF biosimilar product candidates which includes IMRALDI, an adalimumab biosimilar referencing HUMIRA, FLIXABI, an infliximab biosimilar referencing REMICADE, and BENEPALI, an etanercept biosimilar referencing ENBREL, in Europe, and in the case of BENEPALI, Japan.

We have an option to extend this agreement by an additional five years , subject to payment of an option exercise fee of $ 60.0 million by August 2024.

We also have an option to acquire exclusive rights to commercialize these products in China.

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 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.

Royalty payments to AbbVie on sales of IMRALDI are recognized in cost of sales within our consolidated statements of income.

We share 50.0 % of the profit or loss related to our commercial agreement with Samsung Bioepis, which is recognized in collaboration profit sharing/(loss reimbursement) in our consolidated statements of income.

For the years ended December 31, 2023, 2022 and 2021, we recognized net profit-sharing expense o f $ 223.5 million , $ 217.4 million and $ 285.4 million, respectively, to reflect Samsung Bioepis' 50.0 % sharing of the net collaboration profits.

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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.

Under this license agreement, we granted Samsung Bioepis an exclusive license to use, develop, manufacture and commercialize biosimilar products created by Samsung Bioepis using Biogen product-specific technology.

In exchange, we receive single digit royalties on biosimilar products developed and commercialized by Samsung Bioepis.

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.

Royalty revenue under the license agreement is recognized as a component of contract manufacturing, royalty and other revenue in our consolidated statements of income.

For the years ended December 31, 2023, 2022 and 2021, we recognized $ 13.6 million, $ 20.6 million and $ 20.7 million, respectively, as a component of contract manufacturing, royalty and other revenue in our consolidated statements of income related to the license agreement and other services performed under our collaboration with Samsung Bioepis.

Amounts receivable from Samsung Bioepis related to the agreements discussed above were $ 9.9 million and $ 2.0 million as of December 31, 2023 and 2022, respectively.

Amounts payable to Samsung Bioepis related to the agreements discussed above were $ 73.7 million and $ 40.5 million as of December 31, 2023 and 2022, respectively.

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Investments in Variable Interest Entities

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Neurimmune SubOne AG

We have a collaboration and license agreement with Neurimmune for the development and commercialization of antibodies for the potential treatment of Alzheimer's disease, including ADUHELM (as amended, the Neurimmune Agreement).

We are responsible for the development, manufacturing and commercialization of all collaboration products.

The Neurimmune Agreement is effective for the longer of the duration of certain patents relating to a licensed product or 12 years from the first commercial sale of a licensed product.

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.

Our royalty rates payable on products developed under the

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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.

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 addition, during the second quarter of 2020 we recognized net profit-sharing income of $ 33.8 million to reflect Eisai's 45.0 % share of the $ 75.0 million milestone payment, which was recognized in collaboration profit (loss) sharing in our consolidated statements of income.

Beginning in 2007 we consolidated the results of Neurimmune as we determined we were the primary beneficiary because we had the power through the collaboration to direct the activities that most significantly impacted the entity's economic performance and we were required to fund 100.0 % of the research and development costs incurred in support of the collaboration.

The collaboration and license agreement with Neurimmune was for the development and commercialization of antibodies for the potential treatment of Alzheimer's disease, including ADUHELM (as amended, the Neurimmune Agreement).

In November 2023 we notified Neurimmune of our decision to terminate the Neurimmune Agreement.

Subsequent to the termination, we reconsidered our relationship with Neurimmune and determined that we were no longer the primary beneficiary of the variable interest entity.

As a result, we recorded a net gain on the deconsolidation of Neurimmune of approximately $ 3.0 million, which was recorded in other (income) expense, net within our consolidated statements of income for the year ended December 31, 2023.

In June 2021 ADUHELM was granted accelerated approval by the FDA.

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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.

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.

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 sharing/(loss reimbursement) in our consolidated statements of income.

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.

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.

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.

Research and development costs for which we reimbursed Neurimmune are reflected in research and development expense in our consolidated statements of income.

For the years ended December 31, 2023, 2022 and 2021, 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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We have also entered into research collaboration agreements with certain variable interest entities where we are required to fund certain development activities.

These development activities are included in research and development expense in our consolidated statements of income as they are incurred.

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.

These development activities are included in research and

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development expense in our consolidated statements of income as they are incurred.

We have provided no financing to these variable interest entities other than previous contractually required amounts.

We are currently involved in various claims, investigations and legal proceedings, including the matters described below.

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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ADUHELM Securities Litigation

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 actions allege violations of federal securities laws under 15 U.S.C §78j(b) and §78t(a) and 17 C.F.R.

We and certain current and former officers are defendants in two actions related to ADUHELM filed in the United States District Court for the District of Massachusetts (the District Court).

Both 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.

In October 2023 the United States Court of Appeals for the First Circuit reversed in part and affirmed in part the dismissal of the shareholder action related to ADUHELM that was filed in November 2020.

In March 2023 the District Court dismissed the shareholder action that was filed in February 2022.

In May 2023 the plaintiff filed a motion to alter the judgment and amend the complaint, which is pending.

Derivative Actions

We and members of the Board of Directors are named as defendants in derivative actions filed by shareholders in February and July 2022, in the U.S.

District Court for the District of Massachusetts.

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§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.

§240 14.a-9, and 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 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 (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.

In June 2022 Fresenius Kabi Deutschland GmbH (Fresenius Kabi) filed a claim for damages and injunctive relief against Biogen France SAS in the Tribunal de Grande Instance de Paris, alleging that IMRALDI, the adalimumab biosimilar product of Samsung Bioepis that Biogen commercializes in Europe, infringes the French counterpart of European Patent 3 145 488 (the EP ‘488 Patent), which expires in May 2035.

In August 2022 Fresenius Kabi filed a claim for damages and injunctive relief against Biogen GmbH in the Düsseldorf Regional Court, alleging infringement of the German counterpart of the EP '488 Patent.

A hearing in the Düsseldorf Regional Court was held in December 2023 and a decision is pending.

The EP '488 Patent is the subject of opposition proceedings in the EPO Technical Boards of Appeal.

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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.

Litigation with Former Convergence Shareholders

In 2015 Biogen acquired Convergence, a U.K.

In 2019 Shareholder Representative Services LLC, on behalf of the former shareholders of Convergence, asserted claims of $ 200.0 million for alleged breaches of the contract pursuant to which we acquired Convergence.

In June 2023 Shareholder Representative Services LLC and 24 former shareholders filed suit against us in the High Court of Justice of England and Wales on one of the previously asserted claims, seeking payment of $ 49.9 million, interest and costs.

ERISA Class Action Litigation

In September 2020 the U.S.

District Court for the District of Massachusetts consolidated two cases filed against us in July and August 2020 by participants in the Biogen 401(k) Savings Plan, alleging breach of fiduciary duty under ERISA.

Plaintiffs seek a declaration of the action as a class action and monetary and other relief.

In 2020 participants in the Biogen 401(k) Savings Plan filed actions against us in the U.S.

District Court for the District of Massachusetts alleging breach of fiduciary duty under ERISA and seeking a declaration of the actions as class actions and monetary and other relief.

In January 2024 the Court granted final approval of a settlement under which we agreed to pay $ 9.75 million without any admission of liability and dismissed the actions with prejudice.

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 alleges violation of the federal RICO Act and state laws and seeks statutory treble damages, attorneys' fees and costs.

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.

In March 2023 the U.S.

District Court for the District of Massachusetts dismissed the previously disclosed action filed against us by Humana in September 2020.

Humana had alleged damages related to our providing MS patients with free medications and making charitable contributions to non-profit organizations that assist MS patients and had alleged violations of the federal RICO Act and state laws.

In December 2023 Humana appealed to the United States Court of Appeals for the First Circuit and the appeal is pending.

Genentech Litigation

In February 2023 Genentech, Inc.

filed suit against us in the U.S.

District Court for the Northern District of California, alleging that it is owed royalties on sales of TYSABRI that occurred after the expiration of a patent licensed by Genentech to Biogen, together with interest and costs.

The Company estimates that the royalties claimed total approximately $ 88.3 million.

Bardoxolone Securities Litigation

In 2021 and 2022 putative stockholders of Reata (later acquired by Biogen) filed litigation in the United States District Court for the Eastern District of Texas alleging violations of the federal securities laws by Reata, certain former officers and directors and certain underwriters under 15 U.S.C.

§78j(b) and §78t(a), 17 C.F.R.

§240.10b-5, and 15 U.S.C.

§§77k, 77l(a)(2) and 77o in connection with Reata's asset bardoxolone.

Plaintiffs seek declaration of the actions as a class actions and monetary relief.

In October 2023 the parties reached a settlement providing for payment by Reata of $ 45.0 million without any admission of liability.

The Court preliminarily approved the settlement in November 2023 and has set a final fairness hearing for March 2024.

We expect a portion of the payment to be reimbursed under Reata's insurance coverage.

Lender Dispute

One of Reata's lenders claims that approximately $ 23.3 million is owing under a loan agreement with Reata.

Other Matters

Government Investigations

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

The Company has received subpoenas from the SEC seeking information relating to ADUHELM and its launch.

The Company has received a subpoena from the DOJ seeking information relating to our business operations in several foreign countries.

The Company is also providing information relating to our business operations in several foreign countries to the SEC.

TYSABRI Biosimilar Patent Matter

In September 2022 we filed an action in the U.S.

District Court for the District of Delaware against Sandoz Inc.

and Polpharma Biologics S.A.

District Court for the District of Delaware against Sandoz Inc., other Sandoz entities and Polpharma Biologics S.A.

under the Biologics Price Competition and Innovation Act, 42 U.S.C.

§262, seeking a declaratory judgment of patent infringement.

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.

(Mylan Ireland) each filed actions in the General Court of the European Union (Polpharma in October 2018 and Mylan Ireland in November 2020) to annul the European Medicines Agency's (EMA) decision not to validate their applications to market generic versions of TECFIDERA on the grounds that TECFIDERA benefits from regulatory data protection.

On May 5, 2021, the European General Court annulled the EMA's non-validation decision with respect to Polpharma.

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.

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

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Hatch-Waxman Act Litigation relating to VUMERITY Orange-Book Listed Patents

In July 2023 Biogen and Alkermes Pharma Ireland Limited filed patent infringement proceedings relating to VUMERITY Orange-Book listed patents (U.S.

8,669,281, 9,090,558 and 10,080,733) pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act) in the U.S.

District Court for the District of Delaware against Zydus Worldwide DMCC.

Product Liability and Other Legal Proceedings

We are also involved in product liability claims and other legal proceedings generally incidental to our normal business activities.

While the outcome of any of these proceedings cannot be accurately predicted, we do not believe

While the outcome of any of these proceedings cannot be accurately predicted, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our business or financial condition.

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the ultimate resolution of any of these existing matters would have a material adverse effect on our business or financial condition.

Commitments and Contingencies

Royalty Payments

In 2013 we acquired from Elan full ownership of all remaining rights to TYSABRI that we did not already own or control.

Under the acquisition agreement, we are obligated to make contingent payments to Elan of 18.0 % on annual worldwide net commercial sales up to $ 2.0 billion and 25.0 % on annual worldwide net commercial sales that exceed $ 2.0 billion.

Royalty payments to Elan and other third parties are recognized as cost of sales in our consolidated statements of income.

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.

In 2016 we exercised our option to develop and commercialize SPINRAZA from Ionis.

Under our agreement with Ionis, we make royalty payments to Ionis on annual worldwide net commercial sales of SPINRAZA using a tiered royalty rate between 11.0 % and 15.0 %, which are recorded as cost of sales in our consolidated statements of income.

We are obligated to make contingent payments of 18.0 % on annual worldwide net sales of TYSABRI up to $ 2.0 billion and 25.0 % on annual worldwide net sales of TYSABRI that exceed $ 2.0 billion.

Royalty payments are recognized as cost of sales in our consolidated statements of income.

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 as cost of sales in our consolidated statements of income.

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

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.

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.

We make royalty payments to Ionis on annual worldwide net sales of QALSODY using a tiered royalty rate between 11.0 % and 15.0 %, which are recognized as cost of sales in our consolidated statements of income.

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

We make royalty payments to Alkermes on worldwide net sales of VUMERITY using a royalty rate of 15.0 %, which are recognized as cost of sales in our consolidated statements of income.

Royalties payable on net sales of VUMERITY are subject, under certain circumstances, to tiered minimum annual payment requirements for a period of five years following FDA approval.

In October 2019 we entered into a new supply agreement and amended our license and collaboration agreement with Alkermes for VUMERITY.

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

In connection with our acquisition of Reata in September 2023 we assumed additional contractual obligations related to royalty payments.

Reata entered into agreements to pay royalties on future sales of SKYCLARYS, which will cumulatively range in the low- to mid-single digits.

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

Regulatory and Commercial Milestone Payments

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Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones.

If certain clinical and commercial milestones are met, we may pay up to $ 356.2 million in milestones in 2023 under our current agreements.

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.

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consolidated balance sheets, and subsequently paid in January 2024.

If certain clinical and commercial milestones are met, we may pay up to approximately $ 109.0 million in milestones in 2024 under our current agreements.

In June 2021 ADUHELM was granted accelerated approval by the FDA.

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Other Funding Commitments

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Of the amounts accrued as of December 31, 2023, approximately $ 185.4 million is expected to be paid within one year.

The Transition Toll Tax will be paid in installments over an eight--year period, which started in 2018, and will not accrue interest.

The Transition Toll Tax is being paid in installments over an eight--year period, which started in 2018, and will not accrue interest.

For additional information on the Transition Toll Tax, please read Note 17, Income Taxes , to these consolidated financial statements.

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Expense related to our 401(k) Savings Plan totaled approximately $ 55.9 million, $ 56.0 million and $ 58.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Deferred Compensation Plan

We maintain a non-qualified deferred compensation plan, known as the Supplemental Savings Plan (SSP), which allows a select group of management employees in the U.S.

We maintain a non-qualified deferred compensation plan, known as the SSP, which allows a select group of management employees in the U.S.

to defer a portion of their compensation.

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The SSP also holds certain transition contributions on behalf of participants who previously participated in the Biogen, Inc.

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Retirement Plan.

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 2.00 % in 2022 and 1.00 % in both 2021 and 2020.

The minimum investment return is determined annually by the Swiss government and was 1.75 % in 2023, 2.00 % in 2022 and 1.00 % in 2021.

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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Net periodic pension cost related to the German plans totaled $ 3.6 million, $ 5.9 million and $ 7.6 million for the years ended December 31, 2023, 2022 and 2021, respectively, of which $ 0.8 million, $ 1.8 million and $ 2.1 million, respectively, was included in other (income) expense, net in our consolidated statements of income.

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Segment Information

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 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 CODM, 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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Revenue is primarily attributed to individual countries based on location of the customer or licensee.

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Geographic Information

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Revenue from anti-CD20 therapeutic programs 1,618.5 0.4 — — 70.7 1,689.6

Other revenue from external customers 425.8 11.7 — 47.6 — 485.1

Contract manufacturing, royalty and other revenue 673.6 11.7 — 214.0 — 899.3

Long-lived assets 1,443.0 2,248.0 17.5 8.3 12.9 3,729.7

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Revenue from anti-CD20 therapeutic programs 1,636.4 0.1 — — 64.0 1,700.5

Other revenue from external customers 429.9 9.7 — 36.7 — 476.3

Contract manufacturing, royalty and other revenue 425.8 11.7 — 47.6 — 485.1

Long-lived assets 1,369.4 2,275.8 21.0 13.7 22.6 3,702.5

4 unchanged sentences

Revenue from anti-CD20 therapeutic programs 1,596.7 — — — 61.8 1,658.5

Other revenue from external customers 733.6 8.0 0.1 32.9 — 774.6

Contract manufacturing, royalty and other revenue 429.9 9.7 — 36.7 — 476.3

Long-lived assets 1,390.5 2,337.8 25.4 16.4 21.7 3,791.8

24 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management has excluded Reata Pharmaceuticals, Inc.

(Reata) from its assessment of internal control over financial reporting as of December 31, 2023, because it was acquired by the Company in a purchase business combination during 2023.

We have also excluded Reata from our audit of internal control over financial reporting.

Reata is a wholly-owned subsidiary whose total assets and total revenue excluded from management’s assessment and our audit of internal control over financial reporting represent 1.0% and 0.6%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

4 unchanged sentences

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Reserves for Medicaid and Managed Care Rebates

As described in Notes 1 and 5 to the consolidated financial statements, the Company recognized revenue from product sales net of reserves, including Medicaid and managed care rebates.

Within accrued expense and other, total contractual adjustments amounted to $868.1 million as of December 31, 2022.

A portion of this balance includes provisions for Medicaid and managed care rebates in the US.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Reserves for Medicaid and Managed Care Rebates in the U.S.

As described in Notes 1 and 5 to the consolidated financial statements, the Company recognized revenue from product sales, net of reserves, including contractual adjustments related to Medicaid and managed care rebates in the U.S.

Within accrued expense and other, revenue-related reserves amounted to $926.5 million as of December 31, 2023.

A portion of this balance includes contractual adjustments for Medicaid and managed care rebates in the U.S.

Medicaid rebates relate to the Company’s estimated obligations to states under established reimbursement arrangements.

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

Managed care rebates represent the Company’s estimated obligations to third-parties, primarily pharmacy benefit managers.

Managed care rebates in the U.S.

represent the Company’s estimated obligations to third-parties, primarily pharmacy benefit managers.

These rebates result from performance-based goals, formulary position and price increase limit allowances (price protection).

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

Rebate accruals for Medicaid and managed care are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities.

The Medicaid and managed care estimates reflect historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.

The principal considerations for our determination that performing procedures relating to reserves for Medicaid and managed care rebates is a critical audit matter are the significant judgment by management due to the significant measurement uncertainty involved in developing these reserves, as the reserves are based on assumptions developed using historical experience, current contractual requirements, specific known market events and payment patterns, which in turn led to a high degree of auditor judgment, subjectivity, and effort in applying procedures and evaluating audit evidence related to these assumptions.

Rebate accruals for Medicaid and managed care in the U.S.

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

The estimates of the reserves for Medicaid and managed care in the U.S.

reflect historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.

The principal considerations for our determination that performing procedures relating to reserves for Medicaid and managed care rebates in the U.S.

is a critical audit matter are (i) the significant judgment by management due to the significant measurement uncertainty when developing the estimate of the reserves and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating assumptions related to historical experience, current contractual requirements, specific known market events, and forecasted customer buying and payment patterns.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the reserves for Medicaid and managed care rebates, including controls over the assumptions used to estimate these Medicaid and managed care rebate reserves.

These procedures also included, among others (i) developing an independent estimate of the Medicaid and managed care rebate reserves by utilizing third-party data related to product demand, data related to price changes, the terms of the specific rebate programs, the historical trend of actual rebate claims paid and consideration of contractual requirement changes and market events;

(ii) comparing the independent estimate to management’s estimate;

and (iii) testing rebate claims paid by the Company, including evaluating the claims for consistency with the contractual terms of the Company’s rebate agreements.

These procedures included testing the effectiveness of controls relating to management's estimate of the reserves for Medicaid and managed care rebates in the U.S.

These procedures also included, among others (i) developing an independent estimate of the reserves for Medicaid and managed care rebates in the U.S.

by utilizing third-party data related to product demand, data related to price changes, the terms of the specific rebate programs, the historical trend of actual rebate claims paid and consideration of contractual requirement changes and market events;

(ii) comparing the independent estimate to management’s estimate to evaluate the reasonableness of management's estimate;

and (iii) testing, on a sample basis, rebate claims paid by the Company, including evaluating the claims for consistency with the contractual terms of the Company’s rebate agreements.

Acquisition of Reata - Valuation of Completed Technology and In-Process Research and Development Intangible Assets

As described in Notes 1 and 2 to the consolidated financial statements, the Company completed the acquisition of Reata for total consideration of $7,193.4 million.

Of the acquired intangible assets, $4,200.0 million of completed technology and $2,300.0 million of in-process research and development (IPR&D) were recorded.

Management uses the multi-period excess earnings method, which is a form of the income approach, utilizing post-tax cash flows and discount rates in estimating the fair value of identifiable intangible assets acquired when allocating the purchase consideration paid for the acquisition.

The estimates of the fair value of identifiable intangible assets involve significant judgment by management and include assumptions with measurement uncertainty, such as the amount and timing of projected cash flows, long-term sales forecasts, discount rate, and additionally for the IPR&D intangible asset, the timing and probability of regulatory and commercial success.

The principal considerations for our determination that performing procedures relating to the valuation of completed technology and IPR&D intangible assets acquired in the acquisition of Reata is a critical audit matter are (i) the significant judgment by management due to the significant measurement uncertainty when developing the fair value estimate of the completed technology and IPR&D intangible assets acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to long-term sales forecasts and discount rate for the completed technology intangible asset and long-term sales forecasts, discount rate, and probability of regulatory and commercial success for the IPR&D intangible asset;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the completed technology and IPR&D intangible assets acquired.

These procedures also included, among others (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the completed technology and IPR&D intangible assets acquired;

(iii) evaluating the appropriateness of the multi-period excess earnings method used by management;

(iv) testing the completeness and accuracy of certain of the data used in the multi-period excess earnings method;

and (v) evaluating the reasonableness of the significant assumptions used by management related to long-term sales forecasts and discount rate for the completed technology intangible asset and long-term sales forecasts, discount rate, and probability of regulatory and commercial success for the IPR&D intangible asset.

Evaluating management’s assumptions related to long-term sales forecasts for the completed technology and IPR&D intangible assets and probability of regulatory and commercial success for the IPR&D intangible asset involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the acquired business and (ii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Evaluating management’s assumption related to long-term sales forecasts also involved considering the consistency with external market and industry data.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings method and (ii) the reasonableness of the discount rate significant assumption for the completed technology and IPR&D intangible assets.

/s/ PricewaterhouseCoopers LLP

3 unchanged sentences

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