For the nine months ended September 30, ~~2017,~~2019, certain significant cash flows were as follows:

~~$3.0 billion~~ ~~in net cash flows provided by operating activities, net of:~~


•	$5.1 billion in net cash flows provided by operating activities, net of:


◦	$~~765.4~~788.5 million in total payments for income taxes;


◦	$~~454.8~~74.0 million upfront payment made to ~~Forward Pharma for the litigation~~Skyhawk upon entering into a collaboration and ~~settlement charges that were accrued as of December 31, 2016;~~research and development services agreement; and


◦	$~~300.0~~45.0 million upfront payment made to ~~BMS;~~C4 Therapeutics (C4T) upon entering into a collaborative research and license agreement;

~~$1.4 billion~~ ~~used for share repurchases;~~

~~$900.0 million~~ ~~in contingent payments made to former shareholders of Fumapharm AG and holders of their rights;~~

~~$795.2 million payment made to Forward Pharma to license intellectual property related to TECFIDERA;~~

~~$636.8 million~~ ~~used for purchases of property, plant and equipment;~~

~~$302.7 million net cash contribution made to Bioverativ; and~~

~~$230.0 million in upfront and milestone payments made to Remedy and Ionis.~~


•	$3.8 billion used for share repurchases;


•	$923.7 million in proceeds received on the divestiture of our Hillerød, Denmark manufacturing operations;


•	$744.4 million payment made for our acquisition of NST, net of cash acquired;


•	$476.0 million in proceeds received on sales of strategic investments;


•	$404.1 million used for purchases of property, plant and equipment; and


•	$300.0 million for the final contingent payment made to former shareholders of Fumapharm AG and holders of their rights.

For the nine months ended September 30, ~~2016,~~2018, certain significant cash flows were as follows:

~~$3.0 billion~~ ~~in net cash flows provided by operating activities, net of:~~


•	$4.3 billion in net cash flows provided by operating activities, net of:


◦	$~~1.3 billion~~698.8 million in total payments for income taxes; and


◦	$375.0 million upfront payment made to Ionis upon the closing of the 2018 Ionis Agreement and a $162.1 million charge reflecting the premium paid for the purchase of Ionis common stock;


•	$3.0 billion used for share repurchases;


•	$1.2 billion in contingent payments made to former shareholders of Fumapharm AG and holders of their rights;


•	$544.7 million used for purchases of property, plant and equipment;


•	$462.9 million payment made to Ionis reflecting the fair value of the Ionis common stock purchased upon the closing of the 2018 Ionis Agreement; and

$~~900.0~~112.5 million in ~~contingent~~upfront payments made ~~to former shareholders~~for our acquisitions of ~~Fumapharm AG~~BIIB100, BIIB104 and ~~holders of their rights;~~

~~$434.0 million~~ ~~used for purchases of property, plant and equipment; and~~

~~$348.9 million~~ ~~used for share repurchases.~~

BIIB110.

Overview

We have historically financed our operating and capital expenditures primarily through cash flows earned from our operations. We expect to continue funding our current and planned operating requirements principally through our cash flows from

operations, as well as our existing cash resources. We believe that our existing funds, when combined with cash generated from operations and our access to additional financing resources, if needed, are sufficient to satisfy our operating, working capital, strategic alliance, milestone payment, capital expenditure and debt service requirements for the foreseeable future. In addition, we may choose to opportunistically return cash to shareholders and pursue other business initiatives, including acquisition and licensing activities. We may, from time to time, also seek additional funding through a combination of

new collaborative agreements, strategic alliances and additional equity and debt financings or from other sources should we identify a significant new opportunity.

The undistributed cumulative foreign earnings of certain of our foreign subsidiaries, exclusive of earnings that would result in little or no net income tax expense under current U.S. tax law or which has already been subject to tax under U.S. tax law, are invested indefinitely outside the U.S.

Of the total cash, cash equivalents and marketable securities at September 30, 2017, approximately $4.4 billion was generated in foreign jurisdictions and is primarily intended for use in our foreign operations or in connection with business development transactions outside the U.S. In managing our day-to-day liquidity in the U.S., we do not rely on the unrepatriated earnings as a source of funds and we have not provided for U.S. federal or state income taxes on these undistributed foreign earnings.

For additional information ~~related to~~on certain risks that could negatively impact our financial position or future results of operations, please read ~~the “Risk Factors” and “~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~” sections of~~ andItem 1A. Risk Factors included in this report.

Share Repurchase Programs

In March 2019 our Board of Directors authorized our 2019 Share Repurchase Program, which is a program to repurchase up to $5.0 billion of our common stock. Our 2019 Share Repurchase Program does not have an expiration date. All share repurchases under our 2019 Share Repurchase Program will be retired. Under our 2019 Share Repurchase Program, we repurchased and retired approximately 3.1 million and 7.0 million shares of our common stock at a cost of approximately $717.9 million and $1.6 billion during the three and nine months ended September 30, 2019, respectively.

From October 1, 2019 through October 21, 2019, we repurchased and retired approximately 2.3 million shares of our common stock at a cost of approximately $508.6 million under our 2019 Share Repurchase Program. Approximately $2.9 billion remained available under our 2019 Share Repurchase Program as of October 21, 2019.

In August 2018 our Board of Directors authorized a program to repurchase up to $3.5 billion of our common stock (2018 Share Repurchase Program), which was completed as of June 30, 2019. All share repurchases under our 2018 Share Repurchase Program were retired. Under our 2018 Share Repurchase Program, we repurchased and retired approximately 8.9 million shares of our common stock at a cost of approximately $2.1 billion during the nine months ended September 30, 2019.

In July 2016 our Board of Directors authorized a program to repurchase up to $5.0 billion of our common ~~stock. This authorization does not have an expiration date.~~stock (2016 Share Repurchase Program), which was completed as of June 30, 2018. All share

repurchases under ~~this authorization will be~~our 2016 Share Repurchase Program were retired. Under ~~this program,~~our 2016 Share Repurchase Program, we repurchased and retired ~~3.7~~approximately 10.5 million shares of our common stock at a cost of ~~$1.0~~approximately $3.0 billion during the nine months ended September 30, 2017. We did not repurchase any shares of common stock under this program during the three months ended September 30, 2017. During the three and nine months ended September 30, 2016, we repurchased and retired 1.1 million shares of common stock at a cost of $348.9 million. As of September 30, 2017, approximately $3.0 billion remains available to repurchase shares under this authorization.2018.

In February 2011 our Board of Directors authorized a program to repurchase up to 20.0 million shares of common stock, which was completed as of March 31, 2017. During the nine months ended September 30, 2017, we repurchased 1.3 million shares of common stock at a cost of $365.4 million under this program. We did not repurchase any shares of common stock under this program during the three and nine months ended September 30, 2016.

Cash, Cash Equivalents and Marketable Securities

Until required for another use in our business, we typically invest our cash reserves in bank deposits, certificates of deposit, commercial paper, corporate notes, U.S. and foreign government instruments, overnight reverse repurchase agreements and other ~~interest bearing~~interest-bearing marketable debt instruments in accordance with our investment policy. It is our policy to mitigate credit risk in our cash reserves and marketable securities by maintaining a well-diversified portfolio that limits the amount of exposure as to institution, maturity and investment type.

As of September 30, 2019, we had cash, cash equivalents and marketable securities totaling approximately $6.3 billion compared to approximately $4.9 billion as of December 31, 2018. The net ~~decrease~~increase in cash, cash equivalents and marketable securities at September 30, ~~2017~~2019 from December 31, ~~2016,~~2018, was primarily due to cash flows from operations, cash received upon the divestiture of our Hillerød, Denmark manufacturing operations and proceeds from sales of strategic investments, partially offset by cash used for share repurchases, ~~the payment made to Forward Pharma in connection with~~cash used for our ~~January 2017 settlement~~acquisition of NST, net purchases of property, plant and ~~license agreement,~~equipment, contingent payments made to former shareholders of Fumapharm AG and holders of their rights, net purchases of ~~property, plant~~marketable securities and ~~equipment,~~ upfront ~~and milestone~~ payments made to ~~BMS, Remedy~~Skyhawk and C4T.

Investments and other assets in our condensed consolidated balance sheet as of September 30, 2019 and December 31, 2018, includes the carrying value of our investment in Samsung Bioepis of $572.8 million and $680.6 million, respectively. As Samsung Bioepis is a privately-held entity, our ability to liquidate our investment in Samsung Bioepis may be limited and we may realize significantly less than the value of such investment. Investments and other assets, as of September 30, 2019 and December 31, 2018, also includes the fair value of our investment in Ionis common stock of $318.2 million and $563.8 million, respectively, which is subject to certain holding period restrictions.

For additional information on our acquisition of NST, please read Note 2, Acquisitions, to our condensed consolidated financial statements included in this report. For additional information on the divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures, to our condensed consolidated financial statements

included in this report. For additional information on our collaboration arrangements with Skyhawk and Samsung Bioepis, please read Note 17, Collaborative and Other Relationships,to our condensed consolidated financial statements included in this report. For additional information on our collaboration arrangements with Ionis and ~~the net cash contribution made~~ C4T, please read Note 19, Collaborative and Other Relationships,to ~~Bioverativ. These cash outflows were partially offset by cash flows related to operations.~~our consolidated financial statements included in our 2018 Form 10-K.

Borrowings

The following is a summary of our principal indebtedness:

~~$550.0 million aggregate principal amount of 6.875% Senior Notes due March 1, 2018;~~

$1.5 billion aggregate principal amount of 2.90% Senior Notes due September 15, 2020;

$1.0 billion aggregate principal amount of 3.625% Senior Notes due September 15, 2022;

$1.75 billion aggregate principal amount of 4.05% Senior Notes due September 15, 2025; and

$1.75 billion aggregate principal amount of 5.20% Senior Notes due September 15, 2045.

These ~~senior unsecured notes~~Senior Notes were issued at a discount and are amortized as additional interest expense over the period from issuance through maturity.

We expect to redeem our $550.0 million aggregate principal amount of 6.875% Senior Notes due March 1, 2018 during the fourth quarter of 2017. As a result, we expect to recognize an insignificant loss on the extinguishment of debt in other income (expense), net in our condensed consolidated statements of income. For additional information on our 6.875% Senior Notes due March 1, 2018 and related interest rate swap contracts, please read Note

~~11,~~ ~~Indebtedness, to our consolidated financial statements included in our 2016 Form 10-K.~~

During the third quarter of 2015 we entered into a $1.0 billion, ~~5-year~~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. As of

September 30, ~~2017,~~2019, we had no outstanding borrowings and were in compliance with all covenants under this facility.

For a summary of the fair and carrying values of our outstanding borrowings as of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, please read Note 7, Fair Value Measurements, to our condensed consolidated financial statements included in this report.

Working Capital

~~We define working~~Working capital is defined as current assets less current liabilities. The change in working capital at September 30, ~~2017~~2019, from December 31, ~~2016,~~2018, reflects ~~a decrease~~an increase in total current assets of approximately ~~$1.2 billion~~$807.3 million and an increase in total current liabilities of ~~$28.5 million.~~approximately $1.1 billion.

The ~~decrease~~net increase in total current assets was primarily driven by ~~a decrease~~an increase in net cash, cash equivalents and marketable securities, as described ~~above.~~above, offset by a decrease in inventory resulting from our sale of hemophilia-related inventory to Bioverativ.

The net increase in current liabilities was ~~driven by~~primarily due to the reclassification of $1.5 billion of our Senior Notes to current liabilities ~~of $550.0 million of our 6.875%~~from notes payable, as the Senior Notes ~~due March 1, 2018, as these notes~~ are due within one ~~year,~~year. This increase was partially offset by a reduction in accrued expenses and other. The net decrease in accrued expenses and other was primarily ~~due~~related to a decrease in the accrual of contingent payments related to FUMADERM and TECFIDERA, a decrease in the accrual for construction in progress and the $45.0 million upfront payment ~~of the $454.8 million charge that~~made to C4T, which was accrued as of December 31, ~~2016 in relation to our settlement and license agreement with Forward Pharma.~~2018.

Cash Flows

The following table summarizes our cash flow activity:

For the Nine Months
Ended September 30,
(In millions, except percentages) 2017 2016 % Change
Net cash flows provided by operating activities $ 3,032.7
$ 3,005.3
0.9 %
Net cash flows used in investing activities $ (2,193.6 ) $ (1,903.1 ) 15.3 %
Net cash flows used in financing activities $ (1,671.9 ) $ (326.1 ) **

** Percentage not meaningful.



	For the Nine Months Ended September 30,
(In millions, except percentages)	2019			2018			% Change
Net cash flows provided by operating activities	$	5,118.4		$	4,292.3		19.2	%
Net cash flows used in investing activities	$	(237.9	)	$	(421.0	)	(43.5	)%
Net cash flows used in financing activities	$	(3,744.0	)	$	(3,035.0	)	23.4	%

Operating Activities

Cash flows from operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities. We expect cash provided from operating activities will continue to be our primary source of funds to finance operating needs and capital expenditures for the foreseeable future.

Operating cash flow is derived by adjusting our net income for:

~~Non-cash~~non-cash operating items such as depreciation and amortization, impairment charges, unrealized gain (loss) on strategic investments, acquired ~~in-process research and development~~IPR&D and share-based compensation;

~~Changes~~changes in operating assets and liabilities which reflect timing differences between the receipt

and payment of cash associated with transactions and when they are recognized in results of operations; and

~~Changes associated with~~changes in the fair value of contingent payments associated with our acquisitions of businesses and payments related to collaborations.

For the nine months ended September 30, ~~2017,~~2019, compared to the same period in ~~2016, the increase in~~2018, net cash flows provided by operating activities ~~was~~increased primarily due to higher net income, the changes in working capital, as discussed above, the $375.0 million upfront payment made to Ionis upon the closing of the 2018 Ionis Agreement and a ~~decrease in income tax payments~~$162.1 million charge reflecting the premium paid for the purchase of Ionis common stock in the U.S., partially offset by the $454.8 million payment that was accrued as of December 31, 2016 and paid in the first quarter of 2017, in relation to our settlement and license agreement with Forward Pharma.prior year comparative period.

Investing Activities

For the nine months ended September 30, ~~2017,~~2019, compared to the same period in ~~2016,~~2018, the ~~increase~~decrease in net cash flows used in investing activities was primarily due to a decrease in net proceeds related to marketable securities and the ~~$795.2~~cash used for our acquisition of NST. These amounts were partially offset by a decrease in contingent payments made to former shareholders of Fumapharm AG and holders of their rights, the proceeds received upon the divestiture of our Hillerød, Denmark manufacturing operations, the proceeds received on our sales of strategic investments and the $462.9 million payment made to ~~license Forward Pharma's intellectual property related to TECFIDERA~~Ionis reflecting the fair value of the Ionis common stock purchased upon the closing of the 2018 Ionis Agreement in the first quarter of 2017, the $120.0 million payment made to Remedy for the purchase of BIIB093 in the second quarter of 2017, the $60.0 million and $50.0 million milestone payments made to Ionis in the first and third quarters of 2017, respectively, related to the approvals of SPINRAZA and an increase in purchases of property, plant and equipment primarily related to the construction of our Solothurn, Switzerland facility, partially offset by an ~~increase in net proceeds of marketable securities~~.prior year comparative period.

Financing Activities

For the nine months ended September 30, ~~2017,~~2019, compared to the same period in ~~2016,~~2018, the increase in net cash flows used in financing activities was primarily due to ~~approximately $1.4 billion of~~the increase in cash used for share ~~repurchases in the first half of 2017 and the $302.7 million net cash contribution made to Bioverativ in connection with the spin-off of our hemophilia business in February 2017.~~

repurchases.

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual Obligations

Our contractual obligations primarily consist of our obligations under non-cancellable operating ~~leases, capital~~ leases, long-term debt obligations and defined benefit and other purchase obligations, excluding amounts related to uncertain tax positions, funding commitments, contingent development, regulatory and commercial milestone payments, ~~TYSABRI~~ contingent payments and contingent consideration related to our business combinations, as described below.

There have been no material changes in our contractual obligations since December 31, ~~2016.~~2018.

Contingent Payments

TYSABRI ~~Contingent Payments~~

In 2013 we acquired from Elan Pharma International Ltd. (Elan), an affiliate of Elan Corporation plc, ~~(Elan)~~ full ownership of all remaining rights to TYSABRI that we did not already own or control. Under ~~the terms of~~ the acquisition agreement, we are obligated to make contingent payments to Elan of 18% on annual worldwide net sales up to $2.0 billion and 25% on annual worldwide net sales that exceed $2.0 billion. Royalty payments to Elan and other third parties are recognized as cost of sales in our condensed 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 ~~another third party~~a third-party effective January 2017.

SPINRAZA

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 sales of SPINRAZA using a tiered royalty rate between 11% and 15%, which are recognized as cost of sales in our condensed consolidated statements of income. For additional information on our collaboration arrangements with Ionis, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2018 Form 10-K.

Contingent Consideration related to Business Combinations

In connection with our acquisitions of Convergence Pharmaceuticals Ltd. (Convergence), Stromedix, Inc. (Stromedix) and Biogen International Neuroscience GmbH (BIN)~~, formerly Panima Pharmaceuticals AG,~~ in 2015, 2012 and 2010, respectively, we agreed to make additional payments based upon the achievement of certain milestone events.

As the acquisitions of Convergence, Stromedix and BIN occurred after January 1, 2009, we ~~record~~recognized the contingent consideration liabilities associated with these transactions at their fair value on the acquisition date and revalue these obligations each reporting period.

We may pay up to approximately ~~$1.2~~$0.7 billion in remaining milestones related to these acquisitions.

~~Fumapharm AG~~

In 2006 we acquired Fumapharm AG. As part of this acquisition we acquired FUMADERM and TECFIDERA (together, Fumapharm Products). We are required to make contingent payments to former shareholders of Fumapharm AG or holders of their rights based on the attainment of certain cumulative sales levels of Fumapharm Products and the level of total net sales of Fumapharm Products in the prior 12- month period.

During the nine months ended September 30, 2017, we paid $900.0 million in contingent payments as we reached the $11.0 billion, $12.0 billion and $13.0 billion cumulative sales levels related to the Fumapharm Products in the fourth quarter of 2016, the first quarter of 2017 and the second quarter of 2017, respectively, and accrued $300.0 million upon reaching $14.0 billion in total cumulative sales of Fumapharm Products in the third quarter of 2017.

We will owe an additional $300.0 million contingent payment for every additional $1.0 billion in cumulative sales level of Fumapharm Products reached if the prior 12 months sales of the Fumapharm Products exceed $3.0 billion, until such time as the cumulative sales level reaches $20.0 billion, at which time no further contingent payments will be due. If the prior 12 months sales of Fumapharm Products are less than $3.0 billion, contingent payments remain payable on a decreasing tiered basis. These payments are accounted for as an increase to goodwill as incurred, in accordance with the accounting standard applicable to business combinations when we acquired Fumapharm AG. Any portion of the payment that is tax deductible will be recorded as a reduction to goodwill. Payments are due within 60 days following the end of the quarter in which the applicable cumulative sales level has been reached.

Contingent Development, Regulatory and Commercial Milestone Payments

Based on our development plans as of September 30, ~~2017,~~2019, we could make potential future

milestone payments to third parties of up to approximately ~~$3.1~~$6.3 billion, including approximately ~~$0.6~~$0.9 billion in development milestones, approximately ~~$0.9~~$1.7 billion in regulatory milestones and approximately ~~$1.6~~$3.7 billion in commercial milestones, as part of our various collaborations, including licensing and development programs. Payments under these agreements generally become due and payable upon achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones ~~had~~was not ~~occurred~~considered probable as of September 30, ~~2017,~~2019, such contingencies have not been recorded in our financial statements. Amounts related to contingent milestone payments are not

considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory approval or commercial milestones.

Provided various development, regulatory or commercial milestones are achieved, we anticipate that we may pay approximately ~~$25.0~~$172.0 million of milestone payments during the remainder of ~~2017 in addition to the $40.0 million due to Ionis for the regulatory approval of SPINRAZA in Japan and the $25.0 million due to Samsung Bioepis for the marketing authorization of IMRALDI in the E.U.~~2019.

Other Funding Commitments

As of September 30, ~~2017,~~2019, we have several ongoing clinical studies in various clinical trial stages. Our most significant clinical trial expenditures are to contract research organizations (CROs). ~~Our~~The contracts with CROs are generally cancellable, with notice, at our option. We recorded accrued expenses of approximately ~~$35.0~~$37.0 million in our condensed consolidated balance sheet for expenditures incurred by CROs as of September 30, ~~2017.~~2019. We have approximately ~~$455.0~~$466.0 million in cancellable future commitments based on existing CRO contracts as of September 30, ~~2017.~~2019.

Tax Related Obligations

We exclude liabilities pertaining to uncertain tax positions from our summary of contractual obligations as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities. As of September 30, ~~2017,~~2019, we have approximately ~~$80.0~~$128.0 million of liabilities associated with uncertain tax positions.

As of both September 30, 2019 and December 31, 2018, included in other long-term liabilities we have accrued income tax liabilities of $697.0 million under a one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings (the Transition Toll Tax). Of the amounts accrued as of September 30, 2019, no amounts are expected to be paid within one year due to a $87.0 million carryforward of taxes paid in relation to the company's 2017 tax return. The Transition Toll Tax will be paid in installments over an eight-year period, which started in 2018, and will not

accrue interest.

Other Off-Balance Sheet Arrangements

We do not have any relationships with entities often referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships. We consolidate variable interest entities if we are the primary beneficiary.

New Accounting Standards

For a discussion of new accounting standards please read Note 1, Summary of Significant Accounting Policies - New Accounting Pronouncements, to our condensed consolidated financial statements included in this report.

Critical Accounting Estimates

The preparation of our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. ~~(U.S. GAAP)~~, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and methodologies. We base our estimates on historical experience and on various other assumptions that we believe ~~to be~~are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. Actual results may differ from these ~~estimates under different assumptions~~estimates.

Assets and Liabilities Held For Sale

Upon determining that a long-lived asset or ~~conditions.~~disposal group meets the criteria to be classified as held for sale, we cease depreciation and separately present such assets and liabilities of the disposal group in our condensed consolidated balance sheet. We initially measure a long-lived asset or disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset or disposal group until the date of sale. We assess the fair value of a long-lived asset or disposal group less any costs to sell each reporting period it remains classified as held for sale and recognize any subsequent changes as an adjustment to the carrying value of the asset or disposal group, as long as the remeasured carrying value does not exceed the carrying value less costs to sell of the asset or disposal group at the time it was initially classified as held for sale.

For a discussion of our critical accounting estimates, please read Part II, Item ~~7 “~~7. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~” of~~ in our ~~2016~~2018 Form 10-K. ~~There~~Except as discussed above, there have been no material changes to these critical accounting estimates since our ~~2016~~2018 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About ~~Market Risk~~

Market Risk

We are subject to certain risks that may affect our results of operations, cash flows and fair values of assets and liabilities, including volatility in foreign currency exchange rates, interest rate movements, pricing pressures worldwide and weak economic conditions in the foreign markets in which we operate. We manage the impact of foreign currency exchange rates and interest rates through various financial instruments, including derivative instruments such as foreign currency forward contracts, interest rate lock contracts and interest rate swap contracts. We do not enter into financial instruments for trading or speculative purposes. The counterparties to these contracts are major financial institutions and there is no significant concentration of exposure with any one counterparty.

Foreign Currency Exchange Risk

Our results of operations are subject to foreign currency exchange rate fluctuations due to the global nature of our operations. We have operations or maintain distribution relationships in the U.S., Europe, Canada, Asia and Central and South America. In addition, we recognize our share of pre-tax ~~co-promotion~~co-

promotion profits on RITUXAN in Canada. As a result, our condensed consolidated financial position, results of operations and cash flows can be affected by market fluctuations in foreign currency exchange rates, primarily with respect to the Euro, British pound sterling, Canadian dollar, Swiss franc, ~~Danish krone~~Japanese yen and ~~Japanese yen.~~South Korean won.

While the financial results of our global activities are reported in U.S. dollars, the functional currency for most of our foreign subsidiaries is their respective local currency. Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our operating results, often in ways that are difficult to predict. In particular, as the U.S. dollar strengthens versus other currencies, the value of the non-U.S. ~~revenue~~revenues will decline when reported in U.S. dollars. The impact to net income as a result of a strengthening U.S. dollar will be partially mitigated by the value of non-U.S. ~~expense,~~expenses, which will also decline when reported in U.S. dollars. As the U.S. dollar weakens versus other currencies, the value of the non-U.S. ~~revenue~~revenues and expenses will increase when reported in U.S. dollars.

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

~~In June 2016~~During the ~~U.K. voted in~~second quarter of 2018 the International Practices Task Force of the Center for Audit Quality categorized Argentina as a ~~referendum to voluntarily depart from the E.U.~~country with a projected three-year cumulative inflation rate greater than 100%, ~~known as Brexit, and in March 2017, the U.K. formally started the process for the U.K. to leave the E.U. The macroeconomic~~which indicated that Argentina's economy is highly inflationary. This categorization did not have a material impact on our results of operations ~~from these developments remains unknown. To date,~~or financial position as of September 30, 2019, and is not expected to have a material impact on our results of operations or financial position in the ~~foreign currency exchange impact has been negligible since we hedged the balance sheet foreign currency exchange risk.~~future.

Revenue and Operating Expense Hedging Program

Our foreign currency hedging program is designed to mitigate, over time, a portion of the impact resulting from volatility in exchange rate changes on revenues and operating expenses. We use foreign currency forward contracts to manage foreign currency risk, with the majority of our forward contracts used to hedge certain forecasted revenue and operating expense transactions denominated in foreign currencies in the next 2115 months. We do not engage in currency speculation. For a more detailed disclosure of our revenue and operating expense hedging program, please read Note 9, Derivative Instruments, to our condensed consolidated financial statements included in this report.

Our ability to mitigate the impact of foreign currency exchange rate changes on revenues and net

income diminishes as significant foreign currency exchange rate fluctuations are sustained over extended periods of time. In particular, devaluation or significant deterioration of foreign currency exchange rates are difficult to mitigate and likely to negatively impact earnings. The cash flows from these contracts are reported as operating activities in our condensed consolidated statements of cash flows.

Balance Sheet Risk Management Hedging Program

We also use forward contracts to mitigate the foreign currency exposure related to certain balance sheet items. The primary objective of our balance sheet risk management program is to mitigate the exposure of foreign currency denominated net monetary assets and liabilities of foreign affiliates. In these instances, we principally utilize currency forward contracts. We have not elected hedge accounting for the balance sheet related items. The cash flows from these contracts are reported as operating activities in our condensed consolidated ~~statement~~statements of cash flows.

The following quantitative information includes the impact of currency movements on forward contracts used in our revenue, operating expense and balance sheet hedging programs. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, a hypothetical adverse 10% movement in foreign currency exchange rates compared to the U.S. dollar across all maturities would result in a hypothetical decrease in the fair value of forward contracts of approximately ~~$210.0~~$284.0 million and ~~$172.0~~$290.0 million, respectively. The estimated fair value change was determined by measuring the impact of the hypothetical exchange rate movement on outstanding forward contracts. Our use of this methodology to quantify the market risk of such instruments is subject to assumptions and actual impact could be significantly different. The quantitative information about market risk is limited because it does not take into account all foreign currency operating transactions.

Net Investment Hedge Program

Our net investment hedging program is designed to mitigate currency fluctuations between the U.S. dollar and the South Korean won as a result of exercising our option to increase our ownership percentage in Samsung Bioepis to approximately 49.9%. We entered into foreign currency forward contracts to manage the foreign currency risk with our forward contracts used to hedge changes in the spot rate over the next one month. As of September 30, 2019 and December 31, 2018, a hypothetical adverse 10% movement would result in a hypothetical decrease in fair value of approximately $50.0 million and $64.0 million, respectively. The estimated fair value was determined by measuring the impact of the

hypothetical spot rate movement on outstanding forward contracts.

Interest Rate Risk

Our investment portfolio includes cash equivalents and short-term investments. The fair value of our marketable securities is subject to change as a result of potential changes in market interest rates. The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 100 basis point adverse movement across all maturities. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we estimate that such hypothetical 100 basis point adverse movement would result in a hypothetical loss in fair value of approximately ~~$53.0~~$27.0 million and ~~$50.0~~$19.0 million, respectively, to our interest rate sensitive instruments. The fair values of our investments were determined using third-party pricing services or other market observable data.

To achieve a desired mix of fixed and floating interest rate debt, we entered into interest rate swap contracts during 2015 for certain of our fixed-rate debt. These derivative contracts effectively converted a fixed-rate interest coupon to a floating-rate LIBOR-based coupon over the life of the respective note. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, a 100 basis-point adverse movement (increase in LIBOR) would increase annual interest expense by approximately $6.8 million.

Pricing Pressure

Governments in ~~some~~certain international markets in which we operate have implemented measures, ~~aimed at reducing healthcare~~and may in the future implement new or additional measures, to reduce health care costs to limit the overall level of government expenditures. These ~~implemented~~ measures vary by country and may include, among other things, ~~mandatory rebates and discounts,~~patient access restrictions, suspensions on price increases, prospective and possible retroactive price reductions and ~~suspensions on~~other recoupments and increased mandatory discounts or rebates, recoveries of past price increases and greater importation of ~~pharmaceuticals.~~

drugs from lower-cost countries. In addition, certain countries set prices by reference to the prices in other countries where our products are marketed. Thus, our inability to ~~secure favorable~~obtain and maintain adequate prices in a particular country may ~~impair~~adversely affect our ability to ~~obtain~~secure acceptable prices in existing and potential new markets, which may limit market growth. The continued implementation of pricing actions throughout Europe may also lead to higher levels of parallel trade.

care insurance programs and increasing pressure from social sources could significantly influence the ~~manner in which~~way our products are prescribed and purchased. It is possible that additional federal health care reform measures will be adopted in the future, which could result in increased pricing pressure and reduced reimbursement for our products and otherwise have an adverse impact on our financial position or results of operations.

Our products are also susceptible to increasing competition from generics and biosimilars in many markets. Generic versions of drugs and biosimilars are likely to be sold at substantially lower prices than branded products. Accordingly, the introduction of generic or biosimilar versions of our marketed products, as well as lower-priced competing products, likely would significantly reduce both the price that we receive for such marketed products and the volume of products that we sell, which may have an adverse impact on our results of operations.

There is also significant economic pressure on state budgets that may result in states increasingly seeking to achieve budget savings through mechanisms that limit coverage or payment for our drugs. Managed care organizations are also continuing to seek price discounts and, in some cases, to impose restrictions on the coverage of ~~particular~~certain drugs.

Our products are also susceptible to increasing competition in many markets from generics, biosimilars, prodrugs and other products approved under abbreviated regulatory pathways. Generic versions of drugs, biosimilars and other products approved under abbreviated regulatory pathways are likely to be sold at substantially lower prices than branded products. Accordingly, the introduction of such products, as well as other lower-priced competing products, may significantly reduce both the price that we receive for branded products and the volume of branded products that we sell, which will negatively impact our revenues.

Credit Risk

We are subject to credit risk from our accounts receivable related to our product sales. The majority of our accounts receivable arise from product sales in the U.S. and Europe with concentrations of credit risk limited due to the wide variety of customers and markets using our products, as well as their dispersion across many different geographic areas. Our accounts receivable are primarily due from wholesale and other third-party distributors, public hospitals, pharmacies and other government entities. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We operate in certain countries where weakness in economic conditions can result in extended collection periods. We continue to monitor these conditions, including the volatility associated with international economies and the relevant financial markets, and assess their possible impact on our business. To date, we have not experienced any significant losses with respect to the collection of our accounts receivable.

Credit and economic conditions in the E.U. continue to remain uncertain, which has, from time to time, led to long collection periods for our accounts

receivable and greater collection risk in certain countries.

We believe that our allowance for doubtful accounts was adequate as of September 30, ~~2017~~2019 and December 31, ~~2016.~~2018. However, if significant changes occur in the availability of government funding or the reimbursement practices of these or other governments, we may not be able to collect on amounts due to us from customers in such countries and our results of operations could be adversely affected.

Item 4. Controls and Procedures

Disclosure Controls and Procedures and Internal Control over Financial Reporting

Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of September 30, ~~2017.~~2019. 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 (a) the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and (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. 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.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, ~~2017,~~2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II — OTHER INFORMATION

Item 1. Legal Proceedings

~~Please refer to~~For a discussion of legal proceedings as of September 30, 2019, please read Note 19, Litigation, to our unaudited condensed consolidated financial statements included in this report, which is incorporated into this item by reference.

Item 1A. Risk Factors

We are substantially dependent on revenues from our ~~principal~~ products.

Our ~~current~~ revenues depend upon continued sales of our ~~principal~~ products, as well as the financial rights we have in our anti-CD20 therapeutic programs, and, unless we develop, or acquire rights to and/or commercialize new products and technologies, we will be substantially dependent on sales from our ~~principal~~ products and our financial rights in our anti-CD20 therapeutic programs for many years. ~~Further, following the completion of the spin-off~~Additionally, a significant portion of our ~~hemophilia business, our~~ revenues are ~~further reliant and~~ concentrated on sales of our MS products in an increasingly competitive ~~market, and revenues from sales of our product for SMA.~~markets. Any of the following negative developments relating to any of our ~~principal~~ products or any of our anti-CD20 therapeutic programs may adversely affect our revenues and results of operations or could cause a decline in our stock price:

safety or efficacy issues;

the introduction or greater acceptance of competing products, including ~~lower-priced competing products;~~generics, biosimilars, prodrugs and other products approved under abbreviated regulatory pathways;

~~constraints~~limitations and additional pressures on product pricing or price increases, including those resulting from governmental or regulatory requirements, increased competition or changes in, or implementation of, reimbursement policies and practices of payors and other third parties; or

adverse legal, administrative, regulatory or legislative developments.

SPINRAZA ~~was recently~~has been approved by, among others, the FDA, the ECEuropean Commission and the Japanese Ministry of Health, Labor and Welfare, and is in the early stages of commercial launch in ~~these and other~~certain markets. In addition to risks associated with new product launches and the other factors described in these “Risk Factors”, our ability to successfully commercialize SPINRAZA may be adversely affected due to:

~~our limited marketing experience within the SMA market, which may impact our ability to develop relationships with the associated medical and scientific community;~~

~~the lack of readiness of healthcare providers to treat patients with SMA;~~

~~the effectiveness of our commercial strategy for marketing SPINRAZA; and~~

our ability to maintain a positive reputation among patients, healthcare providers and others in the SMA community, which may be impacted by pricing and reimbursement decisions relating to ~~SPINRAZA.~~

~~If we fail to compete effectively, our business and market position would suffer.~~

The biopharmaceutical industry and the markets in which we operate are intensely competitive. We compete in the marketing and sale of our products, the development of new products and processes, the acquisition of rights to new products with commercial potential and the hiring and retention of personnel. We compete with biotechnology and pharmaceutical companies that have a greater number of products on the market and in the product pipeline, greater financial and other resources and other technological or competitive advantages. One or more of our competitors may benefit from significantly greater sales and marketing capabilities, may develop products that are accepted more widely than ours or may receive patent protection that dominates, blocks or adversely affects our product development or business.

In the MS market, we face intense competition as the number of products and competitors continues to expand. Due to our significant reliance on sales of our MS products, our business may be harmed if we are unable to successfully compete in the MS market. More specifically, our ability to compete, maintain and grow our share in the MS market may be adversely affected due to a number of factors, including:SPINRAZA;

the introduction of ~~more efficacious, safer, less expensive or more convenient alternatives to~~ a new gene therapy product that was approved in the U.S. in May 2019 for the treatment of SMA, and other products in development that, if successfully developed and approved, may compete with SPINRAZA in the SMA market, including potential oral products;

our ~~MS products, including our own products and products of our collaborators;~~

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

~~patient dynamics, including the size of the patient population and~~limited marketing experience within certain SMA markets, which may impact our ability to ~~attract new~~develop additional relationships with the associated medical and scientific community; and

the lack of readiness of healthcare providers to treat patients ~~to our therapies;~~

~~damage to physician and patient confidence in any of our MS products or to our sales and reputation as a result of label changes or adverse experiences or events that may occur~~ with ~~patients treated with our MS products;~~

~~inability to obtain appropriate pricing and reimbursement for our MS products compared to our competitors in key international markets; or~~

~~our ability to obtain and maintain patent, data or market exclusivity for our MS products.~~SMA.

Sales of our products depend, to a significant extent, on adequate coverage, pricing and reimbursement from ~~third party~~third-party payors, which are subject to increasing and intense pressure from political, social, competitive and other sources. Our inability to obtain and maintain adequate coverage, or a reduction in pricing or reimbursement, could have an adverse effect on our business, reputation, revenues and results of operations ~~and~~or could cause a decline or volatility in our stock price.

Sales of our products ~~are dependent, in large part,~~depend, to a significant extent, on the availability and extent of adequate coverage, pricing and reimbursement from government health administration authorities, private health insurers and other organizations. When a new pharmaceutical product is approved, the availability of government and private reimbursement for that product may be uncertain, as is the pricing and amount for which that product will be reimbursed.

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

changes in, and implementation of, federal, state or foreign government regulations or private third-party payors' reimbursement policies;

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

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

our value-based contracting ~~pilot~~ program pursuant to which we aim to tie the pricing of our products to their clinical values by either aligning price to patient outcomes or adjusting price for patients who discontinue therapy for any reason, including efficacy or tolerability concerns.

Our ability to set the price for our products varies significantly from country to country and as a result so can the price of our products. Certain countries set prices by reference to the prices in other countries where our products are marketed. Thus, our inability to ~~secure~~obtain and maintain adequate prices in a particular country may not only limit the ~~revenue~~revenues from our products within that country but may also adversely affect our ability to ~~obtain~~secure acceptable prices in ~~other~~existing and potential new markets. This may create the opportunity for third-party cross-border trade or influence our decision to sell or not to sell a product, thus adversely affecting our geographic expansion plans and revenues.

Our failure to maintain adequate coverage, pricing or reimbursement for our products would have an adverse effect on our business, revenues and results of operations, could curtail or eliminate our ability to adequately fund research and development programs for the discovery and commercialization of new products, and could cause a decline in our stock price.

Drug prices are under significant scrutiny in the markets in which our products are prescribed. We expect drug pricing and other health care costs to continue to be subject to intense political and societal pressures on a global basis. In addition, competition from current and future competitors may negatively impact our ability to maintain pricing and our market share. New products or treatments brought to market by our competitors could cause revenues for our products to decrease due to potential price reductions and lower sales volumes. As

Payors, including managed care organizations, health insurers, pharmacy benefit managers, government health administration authorities, private health insurers and other organizations, increasingly seek ways to reduce their costs. Many payors continue to adopt benefit plan changes that shift a greater portion of prescription costs to patients. Such measures include more limited benefit plan designs, higher patient co-pay or co-insurance obligations and limitations on patients’ use of commercial manufacturer co-pay payment assistance programs (including through co-pay accumulator adjustment or maximization programs). Payors also increasingly seek price discounts or rebates in connection with the placement of our products on their formularies or those they manage and control costs by imposing restrictions on access to or usage of our products, such as by requiring prior authorization or step therapy. Significant consolidation in the health insurance industry has resulted in a few large insurers and pharmacy benefit managers exerting greater pressure in pricing and usage negotiations with drug manufacturers, significantly increasing discounts and rebates required of manufacturers and limiting patient access and usage. Further consolidation among insurers, pharmacy benefit managers and other payors would increase the negotiating leverage such entities have over us and other drug manufacturers. Ultimately, additional discounts, rebates, coverage or plan changes, restrictions or exclusions as described above could have a material adverse effect on sales of our affected products.

Our failure to obtain or maintain adequate coverage, pricing or reimbursement for our products could have an adverse effect on our business, reputation, revenues and results of operations, could curtail or eliminate our ability to adequately fund research and development programs for the discovery and commercialization of new products or could cause a decline or volatility in our stock price.

If we are unable to obtain and maintain adequate protection for our data, intellectual property and other proprietary rights, our business may be harmed.

Our success depends in part on our ability to obtain and defend patent and other intellectual property rights that are important to the commercialization of our products and product candidates. The degree of patent protection that will be afforded to our products and processes in the U.S. and in other important markets remains uncertain and is dependent upon the scope of protection decided upon by the patent offices, courts, administrative bodies and lawmakers in these countries. We may fail to successfully obtain or preserve patent protection for the technologies incorporated into our products and processes, or the protection we obtain may not be of sufficient breadth and degree to protect our commercial interests in all countries where we conduct business. Under the Hatch-Waxman

Act, a manufacturer may file an Abbreviated New Drug Application, seeking approval of a generic copy of an approved innovator product, or a NDA under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, which may be for a new or improved version of the original innovator product. The manufacturers are allowed to rely on the safety and efficacy data of the innovator’s product, may not need to conduct clinical trials, can market a competing version of a product after the expiration or loss of patent exclusivity or the expiration or loss of regulatory exclusivity and often charge significantly lower prices. Upon the expiration or loss of patent protection or the expiration or loss of regulatory exclusivity for a product, especially a small molecule product, the major portion of revenues for that product may be dramatically reduced in a very short period of time. If we cannot prevent others from exploiting our inventions, we will not derive the expected benefit from them. Furthermore, our products may be determined to infringe patents or other intellectual property rights held by third parties, which could result in financial, legal, business or reputational harm to us.

We also rely on regulatory exclusivity for protection of our products. Implementation and enforcement of regulatory exclusivity, which may consist of regulatory data protection and market protection, varies widely from country to country. Failure to qualify for regulatory exclusivity, or failure to obtain or maintain the extent or duration of such protections that we expect in each of the markets for our products due to challenges, changes or interpretations in the law or otherwise, could affect our revenues for our products or our decision on whether to market our products in a particular country or countries or could otherwise have an adverse impact on our results of operations.

Litigation, interferences, oppositions, inter partes reviews, administrative challenges or other similar types of proceedings are, have been and may in the future be necessary in some instances to determine the validity and scope of certain of our proprietary rights, and in other instances to determine the validity, scope or non-infringement of certain patent rights claimed by third parties to be pertinent to the manufacture, use or sale of our products. We may also face challenges to our patent and regulatory protections covering our products by third parties, including manufacturers of generics and biosimilars that may choose to launch or attempt to launch their products before the expiration of our patent or regulatory exclusivity. Litigation, interference, oppositions, inter partes reviews, administrative challenges or other similar types of proceedings are unpredictable and may be protracted, expensive and distracting to management. The outcome of such proceedings could adversely affect the validity and scope of our patent or other proprietary rights, hinder our ability to manufacture and market our products, require us to seek a license for the infringed product or technology or result in the assessment of significant monetary damages against us that may exceed amounts, if any, accrued in our financial statements. An adverse determination in a judicial or administrative proceeding or a failure to obtain necessary licenses could prevent us from manufacturing or selling our products. Furthermore, payments under any licenses that we are able to obtain would reduce our profits derived from the covered products and services. Any of these circumstances could result in financial, business or reputational harm to us or could cause a decline or volatility in our stock price.

Our long-term success depends upon the successful development of new products and additional indications for existing products.

Our long-term viability and growth will depend upon the successful development of additional indications for our existing products as well as the successful development of new products and technologies from our research and development activities, our biosimilars joint venture with Samsung BioLogics or licenses or acquisitions from third parties.

Product development is very expensive and involves a high degree of uncertainty and risk. Only a small number of research and development programs result in the commercialization of a product. Furthermore, the development of novel approaches for the treatment of diseases, including development efforts in new modalities such as those based on the antisense oligonucleotide platform and gene therapy, may present additional challenges and risks, including obtaining regulatory approval from the FDA and other regulatory agencies that have limited experience with the development of such therapies. In addition, clinical trial data are subject to differing interpretations and, even if we view data as sufficient to support the safety, effectiveness and/or approval of an investigational therapy, regulatory authorities may disagree and may require additional data, may limit the scope of the approval or may deny approval altogether. Consequently, it may be difficult to predict the time and cost of product development of novel approaches for the treatment of diseases.

In addition, success in preclinical work or early stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful. Clinical trials may indicate that our product candidates lack efficacy, have harmful side effects, result in unexpected adverse events or raise other concerns that may significantly reduce the likelihood of regulatory approval. This may result in terminated programs, significant restrictions on use and safety

warnings in an approved label, adverse placement within the treatment paradigm or significant reduction in the commercial potential of the product candidate.

Even if we are able to successfully develop new products or indications, we may make a strategic decision to discontinue development of a product candidate or indication if, for example, we believe commercialization will be difficult relative to other opportunities in our pipeline.

If we fail to compete effectively, our business and ~~reputation~~market position would suffer.

The biopharmaceutical industry and the markets in which we operate are intensely competitive. We compete in the marketing and sale of our products, the development of new products and processes, the acquisition of rights to new products with commercial potential and the hiring and retention of personnel. We compete with biotechnology and pharmaceutical companies that have a greater number of products on the market and in the product pipeline, substantially greater financial, marketing and research and development and other resources and other technological or competitive advantages. One or more of our competitors may benefit from significantly greater sales and marketing capabilities, may develop products that are accepted more widely than ours or may receive patent protection that dominates, blocks or adversely affects our product development or business.

Our products are also susceptible to increasing competition in many markets from generics, biosimilars, prodrugs and other products approved under abbreviated regulatory pathways. Generic versions of drugs, biosimilars, prodrugs and other products approved under abbreviated regulatory pathways are likely to be sold at substantially lower prices than branded products. Accordingly, the introduction of such products, as well as other lower-priced competing products, may significantly reduce both the price that we receive for branded products and the volume of branded products that we sell, which will negatively impact our revenues.

In the MS market, we face intense competition as the number of products and competitors continues to expand. Due to our significant reliance on sales of our MS products, including TECFIDERA, our business may be harmed if we are unable to successfully compete in the MS market. More specifically, our ability to compete, maintain and grow our share in the MS market may be adversely affected due to a number of factors, including:

the introduction of more efficacious, safer, less expensive or more convenient alternatives to our MS products, including our own products and products of our collaborators;

the introduction of biosimilars, follow-on products, generic versions of branded MS products, prodrugs or products approved under other abbreviated regulatory pathways, which would be significantly less costly than our products to bring to market and would be offered for sale at lower prices, and could result in a significant percentage of the sales of our products being lost to such biosimilars, follow-on products, generic versions of branded MS products, prodrugs or products approved under other abbreviated regulatory pathways;

the off-label use by physicians of therapies indicated for other conditions to treat MS patients;

patient dynamics, including the size of the patient population and our ability to attract and maintain new and current patients to our therapies;

damage to physician and patient confidence in any of our MS products or generic or biosimilars of our MS products, or to our sales and reputation as a result of label changes or adverse experiences or events that may occur with patients treated with our MS products or generic or biosimilars of our MS products;

inability to obtain appropriate pricing and reimbursement for our MS products compared to our competitors in key international markets; or

our ability to obtain and maintain patent, data or market exclusivity for our MS products.

In the SMA market, we face competition from a gene therapy product that was approved in the U.S. in May 2019 for the treatment of SMA. Future sales of SPINRAZA may be adversely affected by the commercialization of this competing product.

Our business may be adversely affected if we do not successfully execute or realize the anticipated benefits of our strategic and growth initiatives.

The successful execution of our strategic and growth initiatives may depend upon internal development projects, commercial initiatives, external opportunities, which may include the acquisition, partnering and in-licensing

of products, technologies and companies or the entry into strategic alliances and collaborations, or the disposition of certain of our assets or operations.

While we believe we have a number of promising programs in our pipeline, failure or delay of internal development projects to advance or difficulties in executing on our commercial initiatives could impact our current and future growth, resulting in additional reliance on external development opportunities for growth. Supporting the further development of our existing products and potential new products in our pipeline will require significant capital expenditures and management resources, including investments in research and development, sales and marketing, manufacturing capabilities and other areas of our business.

The availability of high quality, fairly valued external product development is limited and the opportunity for their acquisition is highly competitive. As such, we are not certain that we will be able to identify suitable candidates for acquisition or if we will be able to reach agreement. Furthermore, if we decide to dispose of certain of our assets or operations, we are not certain that we will be able to identify a suitable counterparty or if we will be able to reach agreement.

We may fail to initiate or complete transactions for many reasons and we may not be able to achieve the full strategic and financial benefits expected to result from transactions, or the benefits may be delayed or not occur at all. We may also face additional costs or liabilities in completed transactions that were not contemplated prior to completion.

Any failure in the execution of a transaction, in the integration of an acquired asset or business or in achieving expected synergies could result in slower growth, higher than expected costs, the recording of asset impairment charges and other actions which could adversely affect our business, financial condition and results of operations.

A breakdown or breach of our technology systems could subject us to liability or interrupt the operation of our business.

We are increasingly dependent upon technology systems and data to operate our business. Our ability to effectively manage our business depends on the security, reliability and adequacy of our technology systems and data. A breakdown, invasion, corruption, destruction or breach of our technology systems and/or unauthorized access to our data and information could subject us to liability or negatively impact the operation of our business. Our technology systems continue to increase in multitude and complexity, making them potentially vulnerable to breakdown, malicious intrusion and random attack. Likewise, data privacy or security breaches by individuals authorized to access our technology systems or others may pose a risk that sensitive data, including intellectual property, trade secrets or personal information belonging to us, our patients, customers or other business partners, may be exposed to unauthorized persons or to the public. Cyber-attacks are increasing in their frequency, sophistication and intensity, and are becoming increasingly difficult to detect. They are often carried out by motivated, well-resourced, skilled and persistent actors, including nation states, organized crime groups, “hacktivists” and employees or contractors acting with malicious intent. Cyber-attacks could include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a malicious website, the use of social engineering and other means to affect the confidentiality, integrity and availability of our technology systems and data. Cyber-attacks could also include supply chain attacks, which could cause a delay in the manufacturing of our products or products produced for contract manufacturing. Our key business partners face similar risks and any security breach of their systems could adversely affect our security posture. While we continue to build and improve our systems and infrastructure, including our business continuity plans, there can be no assurance that our efforts will prevent breakdowns or breaches in our systems that could adversely affect our business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal, business, operational or reputational harm to us, loss of competitive advantage or loss of consumer confidence. In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.

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

Positive results in a clinical trial may not be replicated in subsequent or confirmatory trials. Additionally, success in preclinical work or early stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful or that regulatory approval will be obtained. In addition, even if later stage clinical trials are successful, regulatory authorities may delay or decline approval of our product candidates. Regulatory authorities may disagree with our view of the data, require additional studies or disagree with our trial design or endpoints. Regulatory authorities may also fail to approve the facilities or processes used to manufacture a product candidate,

our dosing or delivery methods or companion devices. Regulatory authorities may grant marketing approval that is more restricted than anticipated. These restrictions may include limiting indications to narrow patient populations and the imposition of safety monitoring, educational requirements and risk evaluation and mitigation strategies. The occurrence of any of these events could result in significant costs and expenses, have an adverse effect on our business, financial condition and results of operations and cause our stock price ~~may be adversely impacted and~~to decline or experience periods of ~~volatility~~volatility.

Even if we are able to successfully develop new products or indications, sales of new products or products with additional indications may not meet investor expectations. We may also make a strategic decision to discontinue development of a product or indication if, for example, we believe commercialization will be difficult relative to the standard of care or other opportunities in our pipeline.

Clinical trials and the development of biopharmaceutical products is a lengthy and complex process. If we fail to adequately manage our clinical activities, our clinical trials or potential regulatory approvals may be delayed or denied.

Conducting clinical trials is a complex, time-consuming and expensive process. Our ability to complete clinical trials in a timely fashion depends on a number of key factors. These factors include protocol design, regulatory and institutional review board approval, patient enrollment rates and compliance with current Good Clinical Practices. If we or our third-party clinical trial providers or third-party CROs do not successfully carry out these clinical activities, our clinical trials or the potential regulatory approval of a product candidate may be delayed or be unsuccessful.

We have opened clinical trial sites and are enrolling patients in a number of countries where our experience is limited. In most cases, we use the services of third parties to carry out our clinical trial related activities and rely on such parties to accurately report their results. Our reliance on third parties for these activities may impact our ability to control the timing, conduct, expense and quality of our clinical trials. One CRO has responsibility for a substantial portion of our activities and reporting related to our clinical trials. If this CRO does not adequately perform, many of our trials may be affected. We may need to replace our CROs. Although we believe there are a number of other CROs we could engage to continue these activities, the replacement of an existing CRO may result in the delay of the affected trials or otherwise adversely affect our efforts to obtain regulatory approvals and commercialize our product candidates.

Adverse safety events or restrictions on use and safety warnings for our products can negatively affect our business, product sales and stock price.

Adverse safety events involving our marketed products, or generic or biosimilar versions of our marketed products, may have a negative impact on our business. Discovery of safety issues with our products could create product liability and could cause additional regulatory scrutiny and requirements for additional labeling or safety monitoring, withdrawal of products from the market and the imposition of fines or criminal penalties. Adverse safety events may also damage physician, patient and/or investor confidence in our products and our reputation. Any of these could result in liabilities, loss of revenues, material write-offs of inventory, material impairments of intangible assets, goodwill and fixed assets, material restructuring charges or other adverse impacts on our results of ~~operations~~operations.

Regulatory authorities are making greater amounts of stand-alone safety information directly available to the public through periodic safety update reports, patient registries and other reporting requirements. The reporting of adverse safety events involving our products or products similar to ours and public rumors about such events may increase claims against us and may also cause our product sales or stock price to decline or experience periods of volatility.

Restrictions on use or significant safety warnings that may be required to be included in the label of our products, such as the risk of developing progressive multifocal leukoencephalopathy or liver injury in the label for certain of our products, may significantly reduce expected revenues for those products and require significant expense and management time.

We depend on relationships with collaborators, joint venture partners and other third parties for revenues, and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates, which are outside of our full control.

We rely on a number of significant collaborative and other third-party relationships, including joint venture partners, for revenues, and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates. We also outsource to third parties certain aspects of our regulatory affairs and

clinical development relating to our products and product candidates. Reliance on collaborative and other third-party relationships, including joint venture partners, subjects us to a number of risks, including:

we may be unable to control the resources our collaborators, joint venture partners or third parties devote to our programs, products or product candidates;

disputes may arise under an agreement, including with respect to the achievement and payment of milestones or ownership of rights to technology developed with our collaborators, joint venture partners or other third parties, and the underlying agreement with our collaborators, joint venture partners or other third parties may fail to provide us with significant protection or may fail to be effectively enforced if the collaborators, joint ventures partners or third parties fail to perform;

the interests of our collaborators, joint venture partners or third parties may not always be aligned with our interests, and such parties may not pursue regulatory approvals or market a product in the same manner or to the same extent that we would, which could adversely ~~impacted.~~ affect our revenues;

third-party relationships, joint ventures and collaborations often require the parties to cooperate, and failure to do so effectively could adversely affect product sales, or the clinical development or regulatory approvals of products under joint control, could result in termination of the research, development or commercialization of product candidates or could result in litigation or arbitration;

any failure on the part of our collaborators, joint venture partners or other third parties to comply with applicable laws and regulatory requirements in the marketing, sale and maintenance of the marketing authorization of our products or to fulfill any responsibilities our collaborators, joint venture partners or other third parties may have to protect and enforce any intellectual property rights underlying our products could have an adverse effect on our revenues as well as involve us in possible legal proceedings; and

any improper conduct or actions on the part of our collaborators, joint venture partners or other third parties could subject us to civil or criminal investigations and monetary and injunctive penalties, and could adversely impact our ability to conduct business, our operating results and our reputation.

Given these risks, there is considerable uncertainty regarding the success of our current and future collaborative efforts. If these efforts fail, our product development or commercialization of new products could be delayed, or revenues from products could decline and/or we may not realize the anticipated benefits of the collaboration arrangements and/or joint ventures.

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

In the U.S., federal and state legislatures, health agencies and third-party payors continue to focus on containing the cost of health care. Legislative and regulatory proposals, ~~and~~ enactments to reform health care insurance programs and increasing pressure from social sources could significantly influence the manner in which our products are prescribed and purchased. For example, provisions of the Patient Protection and Affordable Care Act (PPACA) have resulted in changes in the way health care is paid for by both governmental and private insurers, including increased rebates owed by manufacturers under the Medicaid Drug Rebate Program, annual fees and taxes on manufacturers of certain branded prescription drugs, the requirement that manufacturers participate in a discount program for certain outpatient drugs under Medicare Part D and the expansion of the number of hospitals eligible for discounts under Section 340B of the Public Health Service Act. These changes have had and are expected to continue to have a significant impact on our business.

We may face uncertainties as a result of federal and administrative efforts to repeal, substantially modify or invalidate some or all of the provisions of the PPACA. There is no assurance that the PPACA, as currently enacted or as amended in the future, will not adversely affect our business and financial results, and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform will affect our business.

The administration has also indicated an intent to address prescription drug pricing and recent Congressional hearings have brought increased public attention to the costs of prescription drugs. These actions and the uncertainty about the future of the PPACA and healthcare laws may put downward pressure on pharmaceutical pricing and increase our regulatory burdens and operating costs.

There is also significant economic pressure on state budgets that ~~results~~may result in states increasingly seeking to achieve budget savings through mechanisms that limit coverage or payment for our drugs. In recent years, some states have considered legislation and ballot initiatives that would control the prices of drugs, including laws to allow

importation of pharmaceutical products from lower cost jurisdictions outside the U.S. and laws intended to impose price controls on state drug purchases. State Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug for which supplemental rebates are not being paid. Government efforts to reduce Medicaid expenses may lead to increased use of managed care organizations by Medicaid programs. This may result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding ~~constraint~~limitation on prices and reimbursement for our products.

In the E.U. and some other international markets, the government provides health care at low cost to consumers and regulates pharmaceutical prices, patient eligibility or reimbursement levels to control costs for the government-sponsored health care system. Many countries have announced or implemented measures, and may in the future implement new or additional measures, to reduce health care costs to ~~constrain their~~limit the overall level of government expenditures. These measures vary by country and may include, among other things, patient access restrictions, suspensions on price increases, prospective and ~~possibly~~possible retroactive price reductions and other recoupments and increased mandatory discounts or rebates, recoveries of past price increases and greater importation of drugs from lower-cost ~~countries to higher-cost~~ countries. These measures have negatively impacted our revenues and may continue to adversely affect our revenues and results of operations in the future.

~~Adverse safety events or restrictions on use and safety warnings for our products can negatively affect our business, product sales and stock price.~~

Adverse safety events involving our marketed products may have a negative impact on our business. Discovery of safety issues with our products could create product liability and could cause additional regulatory scrutiny and requirements for additional labeling or safety monitoring, withdrawal of products from the market and the imposition of fines or criminal penalties. Adverse safety events may also damage physician, patient and/or investor confidence in our products and our reputation. Any of these could result in liabilities, loss of revenue, material write-offs of inventory, material impairments of intangible assets, goodwill and fixed assets, material restructuring charges and other adverse impacts on our results of operations.

Restrictions on use or significant safety warnings that may be required to be included in the label of our products, such as the risk of developing progressive multifocal leukoencephalopathy, a serious brain infection, or liver injury, in the label for certain of our products, may significantly reduce expected revenues for those products and require significant expense and management time.

~~If we are unable to obtain and maintain adequate protection for our data, intellectual property and other proprietary rights, our business may be harmed.~~

Our success depends in part on our ability to obtain and defend patent and other intellectual property rights that are important to the commercialization of our products and product candidates. The degree of patent protection that will be afforded to our products and processes in the U.S. and in other important markets remains uncertain and is dependent upon the scope of protection decided upon by the patent offices, courts, administrative bodies and lawmakers in these countries. We can provide no assurance that we will successfully obtain or preserve patent protection for the technologies incorporated into our products and processes, or that the protection obtained will be of sufficient breadth and degree to protect our commercial interests in all countries where we conduct business. If we cannot prevent others from exploiting our inventions, we will not derive the benefit from them that we currently expect. Furthermore, we can provide no assurance that our products will not infringe patents or other intellectual property rights held by third parties.

We also rely on regulatory exclusivity for protection of our products. Implementation and enforcement of regulatory exclusivity, which may consist of regulatory data protection and market protection, varies widely from country to country. Failure to qualify for regulatory exclusivity, or failure to obtain or maintain the extent or duration of such protections that we expect in each of the markets for our products due to challenges, changes or interpretations in the law or otherwise, could affect our revenue for our products or our decision on whether to market our products in a particular country or countries or could otherwise have an adverse impact on our results of operations.

~~Litigation, interferences, oppositions,~~ ~~inter partes~~ reviews or other proceedings are, have been and may in the future be necessary in some instances to determine the validity and scope of certain of our proprietary rights, and in other instances to determine the validity, scope or non-infringement of certain patent rights claimed by third parties to be pertinent to the manufacture, use or sale of our products. We may also face challenges to our patent and regulatory protections covering our products by third parties, including manufacturers of generics and biosimilars that may choose to launch or attempt to launch their products before the expiration of our patent or regulatory exclusivity. Litigation, interference, oppositions, ~~inter partes~~ reviews, administrative challenges or other similar types of proceedings are unpredictable and may be protracted, expensive and distracting to management. The outcome of such proceedings could adversely affect the validity and scope of our patent or other proprietary rights, hinder our ability to manufacture and market our products, require us to seek a license for the infringed product or technology or result in the assessment of significant monetary damages against us that may exceed amounts, if any, accrued in our financial statements. An adverse determination in a judicial or administrative proceeding or a failure to obtain necessary licenses could prevent us from manufacturing or selling our products. Furthermore, payments under any licenses that we are able to obtain would reduce our profits derived from the covered products and services.

~~Our long-term success depends upon the successful development of new products and additional indications for existing products.~~

Our long-term viability and growth will depend upon successful development of additional indications for our existing products as well as successful development of new products and technologies from our research and development activities, our biosimilars joint venture with Samsung Biologics or licenses or acquisitions from third parties.

Product development is very expensive and involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. Clinical trials may indicate that our product candidates lack efficacy, have harmful side effects, result in unexpected adverse events or raise other concerns that may significantly reduce the likelihood of regulatory approval. This may result in terminated programs, significant restrictions on use and safety warnings in an approved label, adverse placement within the treatment paradigm or significant reduction in the commercial potential of the product candidate.

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

Positive results in a trial may not be replicated in subsequent or confirmatory trials. Additionally, success in preclinical work or early stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful or that regulatory approval will be obtained. In addition, even if later stage clinical trials are successful, regulatory authorities may delay or decline approval of our product candidates. Regulatory authorities may disagree with our view of the data, require additional studies or disagree with our trial design or endpoints. Regulatory authorities may also fail to approve the facilities or the processes used to manufacture a product candidate, our dosing or delivery methods or companion devices. Regulatory authorities may grant marketing approval that is more restricted than anticipated. These restrictions may include limiting indications to narrow patient populations and the imposition of safety monitoring, educational requirements and risk evaluation and mitigation strategies. The occurrence of any of these events could result in significant costs and expenses, have an adverse effect on our business, financial condition and results of operations, and cause our stock price to decline or experience periods of volatility.

Conducting clinical trials is a complex, time-consuming and expensive process. Our ability to complete clinical trials in a timely fashion depends in large part on a number of key factors. These factors include protocol design, regulatory and institutional review board approval, patient enrollment rates and compliance with current Good Clinical Practices. If we or our third-party clinical trial providers or third-party CROs do not successfully carry out these clinical activities, our clinical trials or the potential regulatory approval of a product candidate may be delayed or be unsuccessful.

We have opened clinical sites and are enrolling patients in a number of countries where our experience is limited. In most cases, we use the services of third parties to carry out our clinical trial related activities and rely on such parties to accurately report their results. Our reliance on third parties for these activities may impact our ability to control the timing, conduct, expense and quality of our clinical trials. One CRO has responsibility for a substantial portion of our clinical trial related activities and reporting. If this CRO does not adequately perform, many of our trials may be affected. We may need to replace our CROs. Although we believe there are a number of other CROs we could engage to continue these activities, the replacement of an existing CRO may result in the delay of the affected trials or otherwise adversely affect our efforts to obtain regulatory approvals and commercialize our product candidates.

Management and key personnel changes may disrupt our operations, and we may have difficulty retaining key personnel or attracting and retaining qualified replacements on a timely basis for management and other key personnel who may leave the Company.

We have experienced changes in management and other key personnel in critical functions across our organization, including most recently our chief executive officer and our chief financial officer. Changes in management and other key personnel have the potential to disrupt our business, and any such disruption could adversely affect our operations, programs, growth, financial condition and results of operations. Further, new members of management may have different perspectives on programs and opportunities for our business, which may cause us to focus on new business opportunities or reduce or change emphasis on our existing business programs.

number of reasons, such as management changes, the underperformance or discontinuation of one or more late stage programs or recruitment by competitors. We cannot assure you that we will be able to hire or retain the personnel necessary for our operations or that the loss of any such personnel will not have a material impact on our financial condition and results of operations.

~~Manufacturing issues could substantially increase our costs, limit supply of our products and reduce our revenues.~~

~~The process of manufacturing our products is complex, highly regulated and subject to numerous risks, including:~~

~~Risk of Product Loss.~~ The manufacturing process for our products is extremely susceptible to product loss due to contamination, oxidation, equipment failure or improper installation or operation of equipment, or vendor or operator error. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our products or manufacturing facilities, we may need to close our manufacturing facilities for an extended period of time to investigate and remediate the contaminant.

~~Risks of Reliance on Third Parties and Single Source Providers.~~ We rely on third-party suppliers and manufacturers for many aspects of our manufacturing process for our products and product candidates. In some cases, due to the unique manner in which our products are manufactured, we rely on single source providers of raw materials and manufacturing supplies. These third parties are independent entities subject to their own unique operational and financial risks that are outside of our control. These third parties may not perform their obligations in a timely and cost-effective manner or in compliance with applicable regulations, and they may be unable or unwilling to increase production capacity commensurate with demand for our existing or future products. Finding alternative providers could take a significant amount of time and involve significant expense due to the specialized nature of the services and the need to obtain regulatory approval of any significant changes to our suppliers or manufacturing methods. We cannot be certain that we could reach agreement with alternative providers or that the FDA or other regulatory authorities would approve our use of such alternatives.

~~Global Bulk Supply Risks.~~ We rely on our principal manufacturing facilities for the production of drug substance for our large molecule products and product candidates. Our global bulk supply of these products and product candidates depends on the uninterrupted and efficient operation of these facilities, which could be adversely affected by equipment failures, labor shortages, natural disasters, power failures and numerous other factors.

~~Risks Relating to Compliance with current Good Manufacturing Practices (cGMP).~~ We and our third-party providers are generally required to maintain compliance with cGMP and other stringent requirements and are subject to inspections by the FDA and comparable agencies in other jurisdictions to confirm such compliance. Any delay, interruption or other issues that arise in the manufacture, fill-finish, packaging or storage of our products as a result of a failure of our facilities or the facilities or operations of third parties to pass any regulatory agency inspection could significantly impair our ability to develop and commercialize our products. Significant noncompliance could also result in the imposition of monetary penalties or other civil or criminal sanctions and damage our reputation.

Any adverse developments affecting our manufacturing operations or the operations of our third-party suppliers and manufacturers may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls or other interruptions in the commercial supply of our products. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Such developments could increase our manufacturing costs, cause us to lose revenue or market share as patients and physicians turn to competing therapeutics, diminish our profitability or damage our reputation.

We depend on relationships with collaborators and other third parties for revenues, and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates, which are outside of our full control.

We rely on a number of significant collaborative and other third-party relationships for revenues, and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates. We also outsource to third parties certain aspects of our regulatory affairs and clinical development relating to our products and product candidates. Reliance on collaborative and other third-party relationships subjects us to a number of risks, including:

~~we may be unable to control the resources our collaborators or third parties devote to our programs or products;~~

disputes may arise under the agreement, including with respect to the achievement and payment of milestones or ownership of rights to technology developed with our collaborators or other third parties, and the underlying contract with our collaborators or other third parties may fail to provide significant protection or may fail to be effectively enforced if the collaborators or third parties fail to perform;

the interests of our collaborators or third parties may not always be aligned with our interests, and such parties may not pursue regulatory approvals or market a product in the same manner or to the same extent that we would, which could adversely affect our revenues;

third-party relationships and collaborations often require the parties to cooperate, and failure to do so effectively could adversely affect product sales, or the clinical development or regulatory approvals of products under joint control or could result in termination of the research, development or commercialization of product candidates or result in litigation or arbitration; and

any failure on the part of our collaborators or other third parties to comply with applicable laws and regulatory requirements in the marketing, sale and maintenance of the marketing authorization of our products or to fulfill any responsibilities our collaborators or other third parties may have to protect and enforce any intellectual property rights underlying our products could have an adverse effect on our revenues as well as involve us in possible legal proceedings.

~~Our business may be adversely affected if we do not successfully execute our growth initiatives.~~

We anticipate growth through internal development projects, commercial initiatives and external opportunities, which may include the acquisition, partnering and in-licensing of products, technologies and companies or the entry into strategic alliances and collaborations. While we believe we have a number of promising programs in our pipeline, failure of internal development projects to advance or difficulties in executing on our commercial initiatives could impact our current and future growth, resulting in additional reliance on external development opportunities for growth. The availability of high quality, cost-effective development opportunities is limited and competitive, and we are not certain that we will be able to identify candidates that we and our shareholders consider suitable or complete transactions on terms that are acceptable to us and our shareholders. We may fail to complete transactions for other reasons, including if we are unable to obtain desired financing on favorable terms, if at all. Even if we are able to successfully identify and complete acquisitions and other strategic alliances and collaborations, we may face unanticipated costs or liabilities in connection with the transaction or we may not be able to integrate them or take full advantage of them or otherwise realize the benefits that we expect.

Supporting our growth initiatives and the further development of our existing products and potential new products in our pipeline will require significant capital expenditures and management resources, including investments in research and development, sales and marketing, manufacturing capabilities and other areas of our business. If we do not successfully execute our growth initiatives, then our business and financial results may be adversely affected and we may incur asset impairment or restructuring charges.

We are pursuing opportunities to expand our manufacturing capacity for future clinical and commercial requirements for product candidates, which will result in the incurrence of significant investment with no assurance that such investment will be recouped.

While we believe we currently have sufficient large scale manufacturing capacity to meet our near-term manufacturing requirements, it is probable that we would need additional large scale manufacturing capacity to support future clinical and commercial manufacturing requirements for product candidates in our pipeline, if such candidates are successful and approved. We are building a large scale biologics manufacturing facility in Solothurn, Switzerland. Due to the long lead times necessary for the expansion of manufacturing capacity, we expect to make significant investments to build or obtain third-party contract manufacturers with no assurance that such investment will be recouped. If we are unable to adequately and timely manufacture and supply our products and product candidates or if we do not fully utilize our manufacturing facilities, our business may be harmed.

~~A breakdown or breach of our technology systems could subject us to liability or interrupt the operation of our business.~~

We are increasingly dependent upon technology systems and data. Our computer systems continue to increase in multitude and complexity due to the growth in our business, making them potentially vulnerable to breakdown, malicious intrusion and random attack. Likewise, data privacy or security breaches by individuals authorized to access our technology systems or others may pose a risk that sensitive data, including intellectual property, trade secrets or personal information belonging to us, our patients, customers or other business partners, may be exposed to unauthorized persons or to the public. Cyber-attacks are increasing in their frequency, sophistication and intensity, and are becoming increasingly difficult to detect. They are often carried out by motivated, well-resourced, skilled and persistent actors including nation states, organized crime groups, “hacktivists" and employees or contractors acting with malicious intent. Cyber-attacks could include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a malicious website, the use of social engineering and other means to affect the confidentiality, integrity and availability of our technology systems and data. Our key business partners face similar risks and any security breach of their systems could adversely affect our security posture. While we continue to build and improve our systems and infrastructure and believe we have taken appropriate security measures to reduce these risks to our data and information technology systems, there can be no assurance that our efforts will prevent breakdowns or breaches in our systems that could adversely affect our business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal, business or reputational harm to us. In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.

If we fail to comply with the extensive legal and regulatory requirements affecting the health care industry, we could face increased costs, penalties and a loss of business.

Our activities, and the activities of our collaborators, distributors and other third-party providers, are subject to extensive government regulation and oversight both in the U.S. and in foreign jurisdictions. The FDA and comparable agencies in other jurisdictions directly regulate many of our most critical business activities, including the conduct of preclinical and clinical studies, product manufacturing, advertising and promotion, product distribution, adverse event reporting and product risk management. Our interactions in the U.S. or abroad with physicians and other health care providers that prescribe or purchase our products are also subject to government regulation designed to prevent fraud and abuse in the sale and use of ~~the~~ products and place significant restrictions on the marketing practices of health care companies. Health care companies such as ours are facing heightened scrutiny of their relationships with health care providers from anti-corruption enforcement officials. In addition, health care companies such as ours have been the target of lawsuits and investigations alleging violations of government regulation, including claims asserting submission of incorrect pricing information, impermissible off-label promotion of pharmaceutical products, payments intended to influence the referral of health care business, submission of false claims for government reimbursement, antitrust violations or violations related to environmental matters. There is also enhanced scrutiny of company-sponsored patient assistance programs, including insurance premium and co-pay assistance programs and donations to third-party charities that provide such assistance. The U.S. government has challenged some of our donations to third-party charities that provide patient assistance. If we, or our vendors or donation recipients, are ~~deemed~~found to fail to comply with relevant laws, regulations or government guidance in the operation of these programs, we could be subject to significant fines or penalties. Risks relating to compliance with laws and regulations may be heightened as we continue to expand our global operations and enter new therapeutic areas with different patient populations, which may have different product distribution methods, marketing programs or patient assistance programs from those we currently utilize or support.

~~Regulations~~Conditions and regulations governing the health care industry are subject to change, with ~~possibly~~possible retroactive effect, including:

new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or judicial decisions, related to health care availability, pricing or marketing practices, compliance with wage and hour laws and other employment practices, method of delivery, payment for health care products and services, compliance with health information and data privacy and security laws and regulations, tracking and reporting payments and other transfers of value made to physicians and teaching hospitals, extensive anti-bribery and anti-corruption prohibitions, product serialization and labeling requirements and used product take-back requirements;

changes in the FDA and foreign regulatory approval processes that may delay or prevent the approval of new products and result in lost market opportunity;

~~the hiring freeze implemented by the federal~~ government shutdowns or relocations may result in ~~2017, including at the FDA, could impact~~delays to the review and ~~potential~~ approval ofprocess, slowing the time necessary for new ~~products,~~drug candidates to be reviewed and/or approved, which may adversely affect our ~~business and financial condition;~~business;

requirements that provide for increased transparency of clinical trial results and quality data, such as the European Medicines Agency's clinical transparency policy, which could impact our ability to protect trade secrets and competitively-sensitive information contained in approval applications or could be misinterpreted leading to reputational damage, misperception or legal action, which could harm our business; and

changes in FDA and foreign regulations that may require additional safety monitoring, labeling changes, restrictions on product distribution or use or other measures after the introduction of our products to market, which could increase our costs of doing business, adversely affect the future permitted uses of approved products or otherwise adversely affect the market for our products.

Violations of governmental regulation may be punishable by criminal and civil sanctions against us, including fines and civil monetary penalties and exclusion from participation in government programs, including Medicare and Medicaid, as well as against executives overseeing our business. In addition to penalties for violation of laws and regulations, we could be required to repay amounts we received from government payors or pay additional rebates and interest if we are found to have miscalculated the pricing information we have submitted to the government. We cannot ensure that our compliance controls, policies and procedures will in every instance protect us from acts committed by our employees, collaborators, partners or third-party providers that would violate the laws or regulations of the jurisdictions in which we operate. Whether or not we have complied with the law, an investigation into alleged unlawful conduct could increase our expenses, damage our reputation, divert management time and attention and adversely affect our business.

Our sales and operations are subject to the risks of doing business internationally.

We are increasing our presence in international markets, particularly emerging markets, subjecting us to many risks that could adversely affect our business and revenues. There is no guarantee that our efforts and strategies to expand sales in international markets will succeed. Emerging market countries may be especially vulnerable to periods of global and local political, legal, regulatory and financial instability and may have a higher incidence of corruption and fraudulent business practices. Further, certain countries may require local clinical trial data as part of the drug registration process in addition to global clinical trials, which can add to overall drug development and registration timelines. We may also be required to increase our reliance on third-party agents and unfamiliar operations and arrangements previously utilized by companies we partner or collaborate with or acquire in emerging markets.

Our sales and operations are subject to the risks of doing business internationally, including:

less favorable intellectual property or other applicable laws;

the introduction or greater acceptance of competing products, including generics, biosimilars, prodrugs and other products approved under abbreviated regulatory pathways;

the inability to obtain necessary foreign regulatory or pricing approvals of products in a timely manner;

limitations and additional pressures on our ability to obtain and maintain product pricing or receive price increases, including those resulting from governmental or regulatory requirements;

the inability to successfully complete subsequent or confirmatory clinical trials in countries where our experience is limited;

longer payment and reimbursement cycles and uncertainties regarding the collectability of accounts receivable;

fluctuations in foreign currency exchange rates that may adversely impact our revenues, net income and value of certain of our investments;

difficulties in staffing and managing international operations;

the imposition of governmental controls;

diverse data privacy and protection requirements;

increasingly complex standards for complying with foreign laws and regulations that may differ substantially from country to country and may conflict with corresponding U.S. laws and regulations;

the far-reaching anti-bribery and anti-corruption legislation in the U.K., including the U.K. Bribery Act 2010, and elsewhere and escalation of investigations and prosecutions pursuant to such laws;

the effects of the implementation of the U.K.'s decision to voluntarily depart from the E.U., known as Brexit;

compliance with complex import and export control laws;

restrictions on direct investments by foreign entities and trade restrictions;

greater political or economic instability;

changes in tax laws; and

the imposition of tariffs or embargoes and other trade restrictions, including the recent tariffs imposed by the U.S. and China and the possibility of additional tariffs or other trade restrictions relating to trade between the two countries.

In addition, our international operations are subject to regulation under U.S. law. For example, the Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies and their representatives from paying, offering to pay, promising to pay or authorizing the payment of anything of value to any foreign government official, government staff member, political party or political candidate for the purpose of obtaining or retaining business or to otherwise obtain favorable treatment or influence a person working in an official capacity. In many countries, the health care professionals we regularly interact with may meet the FCPA's definition of a foreign government official. Failure to comply with domestic or foreign laws could result in various adverse consequences, including: possible delay in approval or refusal to approve a product, recalls, seizures or withdrawal of an approved product from the market, disruption in the supply or availability of our products or suspension of export or import privileges, the imposition of civil or criminal sanctions, the prosecution of executives overseeing our international operations and damage to our reputation. Any significant impairment of our ability to sell products outside of the U.S. could adversely impact our business and financial results.

We have experienced changes in management and other key personnel in critical functions across our organization in recent years. Changes in management and other key personnel have the potential to disrupt our business, and any such disruption could adversely affect our operations, programs, growth, financial condition or results of operations. Further, new members of management may have different perspectives on programs and opportunities for our business, which may cause us to focus on new business opportunities or reduce or change emphasis on our existing business programs.

Our success is dependent upon our ability to attract and retain qualified management and key personnel in a highly competitive environment. Qualified individuals are in high demand, and we may incur significant costs to attract them, particularly at the executive level. We may face difficulty in attracting and retaining key talent for a number of reasons, including management changes, the underperformance or discontinuation of one or more late stage programs or recruitment by competitors. We cannot ensure that we will be able to hire or retain the personnel necessary for our operations or that the loss of any such personnel will not have a material impact on our financial condition and results of operations.

We are building a large-scale biologics manufacturing facility, which will result in the incurrence of significant investment with no assurance that such investment will be recouped.

We believe we currently have sufficient large-scale manufacturing capacity to meet our near-term manufacturing requirements. However, due to the long lead times necessary for the expansion of manufacturing capacity, in 2015 we made the decision to expand our large molecule production capacity by building a large-scale biologics manufacturing facility in Solothurn, Switzerland with no assurance that the additional capacity will be required. In addition, we have made and expect to make significant investments in connection with the building of this manufacturing facility with no assurance that such investment will be recouped. If we are unable to adequately and timely manufacture and supply our products and product candidates or if we do not fully utilize our manufacturing facilities, our business may be harmed. Charges resulting from excess capacity would have a negative effect on our financial condition and results of operations.

Manufacturing issues could substantially increase our costs, limit supply of our products and/or reduce our revenues.

The process of manufacturing our products is complex, highly regulated and subject to numerous risks, including:

•

Risks of Reliance on Third Parties and Single Source Providers. We rely on third-party suppliers and manufacturers for many aspects of our manufacturing process for our products and product candidates. In some cases, due to the unique manner in which our products are manufactured, we rely on single source providers of raw materials and manufacturing supplies. These third parties are independent entities subject to their own unique operational and financial risks that are outside of our control. These third parties may not perform their obligations in a timely and cost-effective manner or in compliance with applicable regulations, and they may be unable or unwilling to increase production capacity commensurate with demand for our existing or future products. Finding alternative providers could take a significant amount of time and involve significant expense due to the specialized nature of the services and the need to obtain regulatory approval of any significant changes to our suppliers or manufacturing methods. We cannot be certain that we could reach agreement with alternative providers or that the FDA or other regulatory authorities would approve our use of such alternatives.

•

Risks Relating to Compliance with current Good Manufacturing Practices (cGMP). We and our third-party providers are generally required to maintain compliance with cGMP and other stringent requirements and are subject to inspections by the FDA and comparable agencies in other jurisdictions to confirm such compliance. Any delay, interruption or other issues that arise in the manufacture, fill-finish, packaging or storage of our products as a result of a failure of our facilities or the facilities or operations of third parties to pass any regulatory agency inspection could significantly impair our ability to develop and commercialize our products. Significant noncompliance could also result in the imposition of monetary penalties or other civil or criminal sanctions and damage our reputation.

•

Global Bulk Supply Risks. We rely on our principal manufacturing facilities for the production of drug substance for our large molecule products and product candidates. Our global bulk supply of these products and product candidates depends on the uninterrupted and efficient operation of these facilities, which could be adversely affected by equipment failures, labor shortages, natural disasters, power failures, cyber-attacks and numerous other factors.

•

Risk of Product Loss. The manufacturing process for our products is extremely susceptible to product loss due to contamination, oxidation, equipment failure or improper installation or operation of equipment or vendor or operator error. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our products or manufacturing facilities, we may need to close our manufacturing facilities for an extended period of time to investigate and remediate the contaminant.

Any adverse developments affecting our manufacturing operations or the operations of our third-party suppliers and manufacturers may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls or other interruptions in the commercial supply of our products. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Such developments could increase our manufacturing costs, cause us to lose revenues or market share as patients and physicians turn to competing therapeutics, diminish our profitability or damage our reputation.

In addition, although we have business continuity plans to reduce the potential for manufacturing disruptions or delays and reduce the severity of a disruptive event, there is no guarantee that these plans will be adequate, which could adversely affect our business and operations.

Our success in commercializing biosimilars developed by Samsung Bioepis is subject to risks and uncertainties inherent in the development, manufacture and commercialization of biosimilars. If Samsung Bioepis is unsuccessful in the development, manufacture and commercialization of biosimilars, we may not realize the anticipated benefits of our investment in Samsung Bioepis.

Our success in commercializing biosimilars developed by Samsung Bioepis is subject to a number of risks, including:

•

Reliance on Third Parties. We are dependent on the efforts of Samsung Bioepis and other third parties over whom we have limited or no control in the development and manufacturing of biosimilars products. In addition, following the divestiture of our Hillerød, Denmark manufacturing operations, we are dependent on FUJIFILM for the manufacture of biosimilar products. If Samsung Bioepis, FUJIFILM or other third parties fail to perform successfully, we may not realize the anticipated benefits of our investment in Samsung Bioepis;


•	Regulatory Compliance. Biosimilar products may face regulatory hurdles or delays due to the evolving and uncertain regulatory and commercial pathway of biosimilars products in certain jurisdictions;


•	Intellectual Property and Regulatory Challenges. Biosimilar products may face extensive patent clearances, patent infringement litigation, injunctions or regulatory challenges, which could prevent the commercial launch of a product or delay it for many years or result in imposition of monetary damages, penalties or other civil sanctions and damage our reputation;


•	Failure to Gain Market and Patient Acceptance. Market success of biosimilar products will be adversely affected if patients, physicians and/or payors do not accept biosimilar products as safe and efficacious products offering a more competitive price or other benefit over existing therapies;

•

Ability to Provide Adequate Supply. Manufacturing biosimilars is complex. If we encounter any manufacturing or supply chain difficulties, we may be unable to meet higher than anticipated demand. In addition, following the divestiture of our Hillerød, Denmark manufacturing operations, we are dependent on FUJIFILM for the manufacture of biosimilar products. FUJIFILM may not perform their obligations in a timely and cost-effective manner or in compliance with applicable regulations and may be unable or unwilling to increase production capacity commensurate with demand for our existing or future biosimilar products;

•

Competitive Challenges. Biosimilar products face significant competition, including from innovator products and from biosimilar products offered by other companies. In some jurisdictions, local tendering processes may restrict biosimilar products from being marketed and sold in those jurisdictions. The number of competitors in a jurisdiction, the timing of approval and the ability to market biosimilar products successfully in a timely and cost-effective manner are additional factors that may impact our success and/or the success of Samsung Bioepis in this business area; and

•

Legal and Regulatory Requirements. Any improper conduct or actions on the part of Samsung Bioepis or our joint venture partner, Samsung BioLogics, could damage our reputation and be distracting to management. In particular, Samsung BioLogics is currently subject to an ongoing criminal investigation, which may impact the operations of Samsung Bioepis and its business or divert the attention of the Samsung Bioepis management team from its ongoing operations and business.

If Samsung Bioepis is unsuccessful in the development, manufacture and commercialization of biosimilar products, we may not realize the anticipated benefits of our investment in Samsung Bioepis.

In addition, as Samsung Bioepis is a privately-held entity, our ability to liquidate our investment in Samsung Bioepis may be limited and we may realize significantly less than the value of such investment.

Our operating results are subject to significant fluctuations.

Our quarterly revenues, expenses and net income (loss) have fluctuated in the past and are likely to fluctuate significantly in the future due to the risks described in these Risk Factors as well as the timing of charges and expenses that we may take. We have recorded, or may be required to record, charges that include:

the cost of restructurings or other initiatives to streamline our operations and reallocate resources;

impairments with respect to investments, fixed assets and long-lived assets, including IPR&D and other intangible assets;

inventory write-downs for failed quality specifications, charges for excess or obsolete inventory and charges for inventory write downs relating to product suspensions, expirations or recalls;

changes in the fair value of contingent consideration;

bad debt expenses and increased bad debt reserves;

outcomes of litigation and other legal or administrative proceedings, regulatory matters and tax matters;

milestone payments under license and collaboration agreements;

payments in connection with acquisitions and other business development activities; and

failure to meet certain contractual commitments, including, for example, the minimum batch production commitment guarantees we have provided as part of the transaction with FUJIFILM.

Our revenues and certain assets and liabilities are also subject to foreign currency exchange rate fluctuations due to the global nature of our operations. Although we have foreign currency forward contracts to hedge specific forecasted transactions denominated in foreign currencies, our efforts to mitigate the impact of fluctuating currency exchange rates may not be successful. As a result, currency fluctuations among our reporting currency, the U.S. dollar, and other currencies in which we do business will affect our operating results, often in unpredictable ways. Our net income may also fluctuate due to the impact of charges we may be required to take with respect to foreign currency hedge transactions. In particular, we may incur higher than expected charges from early termination of a hedge relationship.

Our operating results during any one period do not necessarily suggest the anticipated results of future periods.

Our effective tax rate fluctuates, and we may incur obligations in tax jurisdictions in excess of accrued amounts.

As a global biopharmaceutical company, we are subject to taxation in numerous countries, states and other jurisdictions. As a result, our effective tax rate is derived from a combination of applicable tax rates (including withholding taxes) in the various places that we operate. In preparing our financial statements, we estimate the amount of tax that will become payable in each of such places. Our effective tax rate, however, may be different than experienced in the past due to numerous factors, including changes in the mix of our profitability from country to country, the results of examinations and audits of our tax filings, adjustments to the value of our uncertain tax positions, interpretations by tax authorities or other bodies with jurisdiction, the result of tax cases, changes in accounting for income taxes and changes in tax ~~laws.~~laws either prospectively or retrospectively (including by regulation). Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations.

In addition, our inability to secure or sustain acceptable arrangements with tax authorities and future changes in the tax laws, among other things, may result in tax obligations in excess of amounts accrued in our financial statements.

InThe Tax Cuts and Jobs Act of 2017 (2017 Tax Act) resulted in significant changes to the U.S.~~, there are several proposals under consideration to reform tax law, including proposals that may reduce or eliminate the deferral of U.S.~~ corporate income tax system. These changes include a federal statutory rate reduction from 35% to 21%, the elimination or reduction of certain domestic deductions and credits and limitations on the deductibility of interest expense and executive compensation. The 2017 Tax Act also transitions international taxation from a worldwide system to a modified territorial system, which has the effect of subjecting certain earnings of our foreign subsidiaries to immediate U.S. taxation as global intangible low-taxed income, includes base erosion prevention measures on non-U.S. earnings and the reduced effective tax rate on income that comes from U.S. exports, called Foreign Derived Intangible Income. These changes became effective in 2018.

The 2017 Tax Act also includes the Transition Toll Tax, which is a one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings. The Transition Toll Tax will be paid in installments over an eight-year period, which started in 2018, and will not accrue interest.

Our estimates concerning the impact of the 2017 Tax Act on our ~~unrepatriated earnings, penalize certain transfer pricing structures~~accounting and ~~reduce~~on our business remain subject to developing interpretations of the provisions of the 2017 Tax Act. U.S. Treasury regulations, administrative interpretations or ~~eliminate certain foreign~~court decisions interpreting the 2017 Tax Act may require further adjustments and changes in our estimates, which could have a material adverse effect on our business, results of operations or ~~domestic~~financial condition.

The Swiss Federal Act on Tax Reform and AHV Financing (TRAF) will result in significant changes to the Swiss cantonal income tax ~~credits or deductions. Our future reported financial results may be adversely affected~~system. These changes include the elimination of historic favorable cantonal tax regimes, the introduction of a patent box regime and the introduction of a research and development super deduction. The TRAF also provides for transitional rules to lessen the immediate impact of the elimination of the favorable cantonal tax regimes. These changes will become effective on January 1, 2020. In response to the TRAF, each canton must enact cantonal tax reform to comply with the framework provided by the TRAF and are also expected to lower the statutory tax ~~law~~rate to compensate for the elimination of the historic favorable cantonal tax regimes. We will account for the impact of the TRAF and the specific cantonal tax reform changes in the period in which ~~restrict or eliminate certain foreign~~each canton in which we

operate enacts the cantonal tax ~~credits or~~reform. Zug, a canton in which we operate, enacted cantonal tax reform in the third quarter of 2019 and we expect Solothurn, another canton in which we operate, to enact cantonal tax reform within the next six months. Upon the enactment of Zug cantonal tax reform, we were required to remeasure our ~~ability~~Swiss deferred tax assets and liabilities, to ~~deduct expenses attributable to foreign earnings, or otherwise affect~~account for the ~~treatment~~elimination of the historic favorable cantonal tax regimes, the impact of the transitional rules and the change in the statutory cantonal tax rate. Further remeasurement of our ~~unrepatriated earnings.~~Swiss deferred tax assets and liabilities could have a significant impact on our income tax provision in the period of enactment.

In addition, ~~to U.S. tax reform proposals,~~ the ~~adoption~~enactment of some or all of the recommendations set forth or that may be forthcoming in the Organization for Economic Cooperation and Development’s project on “Base Erosion and Profit Shifting” (BEPS) by tax authorities and economic blocs in the countries in which we operate, could negatively impact our effective tax rate. These ~~recommendations~~initiatives focus on ~~payments from affiliates in high tax jurisdictions to affiliates in lower tax jurisdictions and the activities that give rise to a taxable presence in a particular country.~~

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

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

~~increase our vulnerability to general adverse economic and industry conditions;~~

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

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

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

~~Our sales and operations are subject to the risks of doing business internationally.~~

~~We are increasing our presence in~~common international ~~markets, particularly emerging markets, subjecting us to many risks that could adversely affect our business and revenues, such as:~~

~~the inability to obtain necessary foreign regulatory or pricing approvals of products in a timely manner;~~

~~uncertainties regarding the collectability of accounts receivable;~~

~~fluctuations in foreign currency exchange rates, in particular the recent strength of the U.S. dollar versus foreign currencies, which has adversely impacted our revenues and net income;~~

~~difficulties in staffing and managing international operations;~~

~~the imposition of governmental controls;~~

~~less favorable intellectual property or other applicable laws;~~

~~increasingly complex standards for complying with foreign laws and regulations that may differ substantially from country to country and may conflict with corresponding U.S. laws and regulations;~~

~~the far-reaching anti-bribery and anti-corruption legislation in the U.K., including the U.K. Bribery Act 2010, and elsewhere and escalation of investigations and prosecutions pursuant to such laws;~~

~~the effects of the implementation of the U.K.'s decision to voluntarily depart from the E.U., known as Brexit;~~

~~compliance with complex import and export control laws;~~

~~restrictions on direct investments by foreign entities and trade restrictions;~~

~~greater political or economic instability; and~~

~~changes in tax laws and tariffs.~~

In addition, our international operations are subject to regulation under U.S. law. For example, the Foreign Corrupt Practices Act prohibits U.S. companies and their representatives from offering, promising, authorizing or making payments to foreign officialsprinciples for the ~~purpose~~entitlement to taxation of obtaining or retaining business abroad. In many countries, the health care professionals we regularly interact with may meet the definition of a foreign government official for purposes of the Foreign Corrupt Practices Act. Failure to comply with domestic or foreign laws could result in various adverse consequences, including: possible delay in approval or refusal to approve a product; recalls, seizures or withdrawal of an approved product from the market; disruption in the supply or availability of our products or suspension of export or import privileges; the imposition of civil or criminal sanctions; the prosecution of executives overseeing our international operations;global corporate profits and ~~damage to our reputation. Any significant impairment of our ability to sell products outside of the U.S. could adversely impact our business and financial results.~~

~~Our operating results are subject to significant fluctuations.~~

~~Our quarterly revenues, expenses and net income (loss) have fluctuated in the past and are likely to fluctuate significantly in the future due to the risks described in these~~ ~~“Risk Factors”~~ ~~as well as the timing of charges and expenses that we may take. We have recorded, or may be required to record, charges that include:~~

~~the cost of restructurings or other initiatives to streamline our operations and reallocate resources;~~

~~impairments with respect to investments, fixed assets and long-lived assets, including in-process R&D and other intangible assets;~~

~~inventory write-downs for failed quality specifications, charges for excess or obsolete inventory and charges for inventory write downs relating to product suspensions, expirations or recalls;~~

~~changes in the fair value of contingent consideration;~~

~~bad debt expenses and increased bad debt reserves;~~

~~outcomes of litigation and other legal or administrative proceedings, regulatory matters and~~minimum global tax ~~matters;~~

~~milestone payments under license and collaboration agreements; and~~

~~payments in connection with acquisitions and other business development activities.~~

Our revenues are also subject to foreign currency exchange rate fluctuations due to the global nature of our operations. Although we have foreign currency forward contracts to hedge specific forecasted transactions denominated in foreign currencies, our efforts to mitigate the impact of fluctuating currency exchange rates may not be successful. As a result, currency fluctuations among our reporting currency, the U.S. dollar and the currencies in which we do business will affect our operating results, often in unpredictable ways. Our net income may also fluctuate due to the impact of charges we may be required to take with respect to foreign currency hedge transactions. In particular, we may incur higher than expected charges from hedge ineffectiveness or from the termination of a hedge relationship.

~~Our operating results during any one period do not necessarily suggest the anticipated results of future periods.~~

Our investment in Samsung Bioepis, and our success in commercializing biosimilars developed by Samsung Bioepis, is subject to risks and uncertainties inherent in the development, manufacture and commercialization of biosimilars.

~~Our investment in Samsung Bioepis, and our success in commercializing biosimilars developed by Samsung Bioepis, is subject to a number of risks, including:~~

~~Reliance on Third Parties.~~ We are dependent on the efforts of Samsung Bioepis and other third parties over whom we have limited or no control in the development and manufacturing of biosimilars products. If Samsung Bioepis or such other third parties fail to perform successfully, we may not realize the anticipated benefits of our investment in Samsung Bioepis;

~~Regulatory Compliance.~~ ~~Biosimilar products may face regulatory hurdles or delays due to the evolving and uncertain regulatory and commercial pathway of biosimilars products in certain jurisdictions;~~

~~Intellectual Property and Regulatory Challenges.~~ Biosimilar products may face extensive patent clearances, patent infringement litigation, injunctions or regulatory challenges, which could prevent the commercial launch of a product or delay it for many years;

~~Failure to Gain Market and Patient Acceptance.~~ Market success of biosimilar products will be adversely affected if patients, physicians and/or payers do not accept biosimilar products as safe and efficacious products offering a more competitive price or other benefit over existing therapies;

~~Ability to Provide Adequate Supply.~~ ~~Manufacturing biosimilars is complex. If we encounter any manufacturing or supply chain difficulties, we may be unable to meet higher than anticipated demand; and~~

~~Competitive Challenges.~~ Biosimilar products face significant competition, including from innovator products and from biosimilar products offered by other companies. In some jurisdictions, local tendering processes may restrict biosimilar products from being marketed and sold in those jurisdictions. The number of competitors in a jurisdiction, the timing of approval and the ability to market biosimilar products successfully in a timely and cost-effective matter are additional factors that may impact our success and/or the success of Samsung Bioepis in this business area.

rates.

Our investments in properties may not be fully realized.

We own or lease real estate primarily consisting of buildings that contain research laboratories, office space and manufacturing operations. For strategic or other operational reasons, we may decide to consolidate or co-locate certain aspects of our business operations or dispose of one or more of our properties, some of which may be located in markets that are experiencing high vacancy rates and decreasing property values. If we determine that the fair value of any of our owned properties is lower than their book value, we may not realize the full investment in these properties and incur significant impairment charges or additional depreciation when the expected useful lives of certain assets have been shortened due to the anticipated closing of facilities. If we decide to fully or partially vacate aan owned or leased property, we may incur significant cost, including facility closing costs, employee separation and retention expenses, lease termination fees, rent expense in excess of sublease income and impairment of leasehold improvements and accelerated depreciation of assets. Any of these events may have an adverse impact on our results of operations.

Our portfolio of marketable securities is subject to market, interest and credit risk that may reduce its value.

We maintain a portfolio of marketable securities for investment of our cash. Changes in the value of our portfolio of marketable securities could adversely affect our earnings. In particular, the value of our investments may decline due to increases in interest rates, downgrades of the bonds and other securities included in our portfolio, instability in the global financial markets that reduces the liquidity of securities included in our portfolio, declines in the value of collateral underlying the securities included in our portfolio and other factors. Each of these events may cause us to record charges to reduce the carrying value of our investment portfolio or sell investments for less than our acquisition cost. Although we attempt to mitigate these risks through diversification of our investments and continuous monitoring of our portfolio's overall risk profile, the value of our investments may nevertheless decline.

There can be no assurance that we will continue to repurchase ~~stock~~shares or that we will repurchase ~~stock~~shares at favorable prices.

From time to time our Board of Directors authorizes ~~stock~~share repurchase programs, including, most recently, our ~~2016~~2019 Share Repurchase Program. The amount and timing of ~~stock~~share repurchases are subject to capital availability and our determination that ~~stock~~share repurchases are in the best interest of our shareholders and are in compliance with all respective laws and our agreements applicable to the repurchase of ~~stock.~~shares. Our ability to repurchase ~~stock~~shares will depend upon, among other factors, our cash balances and potential future capital requirements for strategic transactions, our results of operations, our financial condition and other factors beyond our control that we may deem relevant. A reduction in repurchases under, or the completion ~~or expiration~~ of, our ~~stock repurchase programs~~2019 Share Repurchase Program could have a negative effect on our stock price. We can provide no assurance that we will repurchase ~~stock~~shares at favorable prices, if at all.

We may not be able to access the capital and credit markets on terms that are favorable to us.

We may seek access to the capital and credit markets to supplement our existing funds and cash generated from operations for working capital, capital expenditure and debt service requirements and other business initiatives. The capital and credit markets have experienced extreme volatility and disruption in the past, which leads to uncertainty and liquidity issues for both borrowers and investors. In the event of adverse capital and credit market conditions, we may be unable to obtain capital or credit market financing on favorable terms. Changes in credit ratings issued by nationally recognized credit rating agencies could also adversely affect our cost of financing and the market price of our securities.

~~We may incur operational difficulties or be exposed to claims and liabilities as a result of the separation and distribution of Bioverativ.~~

On February 1, 2017, we distributed all of the then outstanding shares of Bioverativ common stock to Biogen shareholders in connection with the separation of our hemophilia business. In connection with the distribution, we entered into a separation and distribution agreement and various other agreements (including a transition services agreement, a tax matters agreement, a manufacturing and supply agreement, an employee matters agreement, an intellectual property matters agreement and certain other commercial agreements). These agreements govern the separation and distribution and the relationship between us and Bioverativ going forward, including with respect to potential tax-related losses associated with the separation and distribution. They also provide for the performance of services by each company for the benefit of the other for a period of time (including under the manufacturing and supply agreement pursuant to which we will manufacture and supply certain products and materials to Bioverativ).

The spin-off of our hemophilia business as an independent public company is intended to qualify for tax-free treatment to Biogen and its shareholders under the Internal Revenue Code. Completion of the spin-off was conditioned upon, among other things, our receipt of a favorable opinion from our tax advisors with respect to the tax-free nature of the transaction. The opinion is not binding on the U.S. Internal Revenue Service (IRS), or the courts, and there can be no assurance that the IRS or the courts will not challenge the qualification of the spin-off as a tax-free transaction or that any such challenge would not prevail. If the spin-off is determined to be taxable, Biogen and its shareholders could incur significant tax liabilities, whichOur indebtedness could adversely affect our business ~~financial condition,~~and limit our ability to plan for or ~~results of operations.~~respond to changes in our business.

~~Bioverativ has agreed~~Our indebtedness, together with our significant contingent liabilities, including milestone and royalty payment obligations, could have important consequences to ~~indemnify us~~our business; for ~~certain potential liabilities that may arise, but we cannot guarantee that Bioverativ will be able~~example, such obligations could:

increase our vulnerability to ~~satisfy its indemnification obligations. The separation~~general adverse economic and ~~distribution agreement provides for indemnification obligations designed~~industry conditions;

limit our ability to ~~make Bioverativ financially responsible for many liabilities that may exist relating to its business activities, whether incurred prior to or after~~access capital markets and incur additional debt in the ~~distribution, including any pending or future litigation. It is possible that a court would disregard the allocation agreed to between us and Bioverativ and~~ future;

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

limit our flexibility in planning for, or reacting to, ~~Bioverativ. Third parties could also seek to hold us~~

~~responsible for any of these liabilities or obligations,~~changes in our business and the ~~indemnity rights~~industry in which we operate, thereby placing us at a competitive disadvantage compared to our competitors that have under the separation and distribution agreement may not be sufficient to fully cover all of these liabilities and obligations. Even if we are successful in obtaining indemnification, we may have to bear costs temporarily. In addition, our indemnity obligations to Bioverativ may be significant. These risks could negatively affect our business, financial condition or results of operations.

The separation of Bioverativ continues to involve a number of risks, including, among other things, the indemnification risks described above and the potential that management’s and our employees’ attention will be significantly diverted by the provision of transitional services. Certain of the agreements described above provide for the performance of services by each company for the benefit of the other for a period of time. If Bioverativ is unable to satisfy its obligations under these agreements, including its indemnification obligations, we could incur losses. These arrangements could also lead to disputes over rights to certain shared property and over the allocation of costs and revenues for products and operations. Our inability to effectively manage the separation activities and related events could adversely affect our business, financial condition or results of operations.

~~We may not achieve some or all of the anticipated benefits of the separation of Bioverativ, which may adversely affect our business.~~

We may not be able to achieve the full strategic and financial benefits expected to result from the separation of Bioverativ, or such benefits may be delayed or not occur at all. If we fail to achieve some or all of the expected benefits of the separation, or if such benefits are delayed, our business, financial condition, results of operations and the value of our stock could be adversely impacted.less debt.

Our business involves environmental risks, which include the cost of compliance and the risk of contamination or injury.

Our business and the business of several of our strategic partners involve the controlled use of hazardous materials, chemicals, biologics and radioactive compounds. Although we believe that our safety procedures for handling and disposing of such materials comply with state, federal and foreign standards, there will always be the risk of accidental contamination or injury. If we were to become liable for an accident, or if we were to suffer an extended facility shutdown, we could incur significant costs, damages and penalties that could harm our business. Manufacturing of our products and product candidates also requires permits from government agencies for water supply and wastewater discharge. If we do not obtain appropriate permits, including permits for sufficient quantities of water and wastewater, we could incur significant costs and limits on our manufacturing volumes that could harm our business.

The illegal distribution and sale by third parties of counterfeit or unfit versions of our products or stolen products could have a negative impact on our reputation and business.

Third parties might illegally distribute and sell counterfeit or unfit versions of our products, which do not meet our rigorous manufacturing, distribution and testing standards. A patient who receives a counterfeit or unfit drug may be at risk for a number of dangerous health consequences. Our reputation and business could suffer harm as a result of counterfeit or unfit drugs sold under our brand name. ~~Stolen inventory that is not properly stored or sold through unauthorized channels could adversely impact patient safety, our reputation and our business.~~ In addition, inventory that is stolen from warehouses, plants or while in-transit, and that is subsequently improperly stored and sold through unauthorized channels, could adversely impact patient safety, our reputation and our business.

The increasing use of social media platforms presents new risks and challenges.

Social media is increasingly being used to communicate about our products and the diseases our therapies are designed to treat. Social media practices in the biopharmaceutical industry continue to evolve and regulations relating to such use are not always clear. This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business. For example, patients may use social media channels to comment on the effectiveness of a product or to report an alleged adverse event. When such disclosures occur, there is a risk that we fail to monitor and comply with applicable adverse event reporting obligations or we may not be able to defend the company or the public's legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our products. There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face overly restrictive regulatory actions or incur other harm to our business.

Some of our collaboration agreements contain change in control provisions that may discourage a third party from attempting to acquire us.

Some of our collaboration agreements include change in control provisions that could reduce the potential acquisition price an acquirer is willing to pay or discourage a takeover attempt that could be viewed as beneficial to shareholders. Upon a change in control, some of these provisions could trigger reduced milestone, profit or royalty payments to us or give our collaboration partner rights to terminate our collaboration agreement, acquire operational control or force the purchase or sale of the programs that are the subject of the collaboration.

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

Issuer Purchases of Equity Securities

The following table summarizes our common stock repurchase activity under our ~~2016~~2019 Share Repurchase Program during the third quarter of ~~2017:~~2019:

~~Period~~

~~Total Number of~~

~~Shares Purchased~~

~~(#)~~

~~Average Price~~

~~Paid per Share~~

~~($)~~

~~Total Number of~~

~~Shares Purchased~~

~~as Part of Publicly~~

~~Announced Programs~~

~~(#)~~

~~Maximum~~

~~Approximate Dollar Value~~

~~of Shares That May Yet Be~~

~~Purchased Under~~

~~Our Programs ($ in millions)~~

~~July 2017~~

—

~~3,000.0~~

~~August 2017~~

—

~~3,000.0~~

~~September 2017~~

—

~~3,000.0~~

~~Total~~

—



Period	Total Number of Shares Purchased (#)	Average Price Paid per Share ($)		Total Number of Shares Purchased as Part of Publicly Announced Programs (#)	Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under Our Programs ($ in millions)
July 2019	378,467	$	237.94	378,467	$	4,000.0
August 2019	—	$	—	—	$	4,000.0
September 2019	2,700,000	$	232.52	2,700,000	$	3,372.2
Total	3,078,467	$	233.19

In ~~July 2016~~March 2019 our Board of Directors authorized our 2019 Share Repurchase Program, which is a program to repurchase up to $5.0 billion of our common stock. ~~This authorization~~Our 2019 Share Repurchase Program does not have an expiration date. All share repurchases under ~~this authorization~~our 2019 Share Repurchase Program will be retired. Under ~~this program,~~our 2019 Share Repurchase Program, we repurchased and retired ~~3.7~~approximately 3.1 million and 7.0 million shares of our common stock at a cost of ~~$1.0~~approximately $717.9 million and $1.6 billion during the nine months ended September 30, 2017. We did not repurchase any shares of common stock under this program during the three months ended September 30, 2017. During the three and nine months ended September 30, 2016, we repurchased and retired 1.1 million shares of common stock at a cost of $348.9 million. As of September 30, 2017, approximately $3.0 billion remains available to repurchase shares under this authorization.

In August 2018 our Board of Directors authorized our 2018 Share Repurchase Program, which was a program to repurchase up to $3.5 billion of our common stock that was completed as of June 30, 2019. All share repurchases under our 2018 Share Repurchase Program were retired. Under our 2018 Share Repurchase Program, we repurchased and retired approximately 8.9 million shares of our common stock at a cost of approximately $2.1 billion during the nine months ended September 30, 2019.

From October 1, 2019 through October 21, 2019, we repurchased and retired approximately 2.3 million shares of our common stock at a cost of approximately $508.6 million under our 2019 Share Repurchase Program. As of October 21, 2019, we have repurchased and retired approximately 9.3 million shares of our common stock at a cost of approximately $2.1 billion under our 2019 Share Repurchase Program. Approximately $2.9 billion remained available under our 2019 Share Repurchase program as of October 21, 2019.

Item 6. Exhibits

The exhibits listed below are filed or furnished as part of this Quarterly Report on Form 10-Q.

EXHIBIT INDEX



Exhibit Number		Description of Exhibit
10.1*+		Annual Retainer Summary for Board of Directors (effective as of January 1, 2020).

31.1+		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2+		Certification of the ~~Principal~~Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1++		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101++		The following materials from Biogen Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2017,~~2019, formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Equity and ~~(v)~~(vi) Notes to Condensed Consolidated Financial Statements.

104		The cover page from this Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in Inline XBRL.

* Management contract or compensatory plan or arrangement

+ Filed herewith

++ Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BIOGEN INC.

/s/ ~~Gregory F. Covino~~Jeffrey D. Capello

~~Gregory F. Covino~~Jeffrey D. Capello

Executive Vice President ~~Finance~~and

Chief ~~Accounting~~Financial Officer ~~and~~

~~Interim Principal Financial Officer (principal~~(principal financial officer)

October ~~24, 2017~~22, 2019

8195



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



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



Large accelerated filer	x	Accelerated filero	☐
Non-accelerated filero	☐	Smaller reporting companyo	☐
~~(Do not check if a smaller reporting company)~~		Emerging growth companyo	☐


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Revenues:
Product, net	$	2,622.5		$	2,539.6		$	7,642.3		$	7,315.0		$	2,894.7		$	2,780.1		$	8,455.0		$	8,061.1
Revenues from anti-CD20 therapeutic programs	406.5			317.6			1,144.2			996.3			595.8			511.7			1,689.6			1,445.3
Other	48.8			98.6			180.4			265.5			109.6			147.2			562.0			420.2
Total revenues	3,077.8			2,955.8			8,966.9			8,576.8			3,600.1			3,439.0			10,706.6			9,926.6
Cost and expenses:
Cost of sales, excluding amortization of acquired intangible assets	370.0			416.9			1,120.8			1,100.2
Cost of sales, excluding amortization and impairment of acquired intangible assets													430.0			460.8			1,508.3			1,327.8
Research and development	446.4			529.0			1,666.0			1,439.4			540.4			507.9			1,588.9			1,985.6
Selling, general and administrative	433.8			462.7			1,363.1			1,452.4			554.5			497.7			1,709.8			1,515.2
Amortization of acquired intangible assets	108.9			99.7			674.9			281.4
Acquired in-process research and development	—			—			120.0			—
Amortization and impairment of acquired intangible assets													283.9			281.9			422.2			493.2
Collaboration profit (loss) sharing	35.2			4.7			82.5			(0.9		)	60.2			47.5			181.8			129.2
Loss on divestiture of Hillerød, Denmark manufacturing operations													(17.7		)	—			95.5			—
(Gain) loss on fair value remeasurement of contingent consideration	30.0			5.9			61.2			18.8			(57.8		)	(87.9		)	(66.3		)	(91.6		)
Restructuring charges	—			11.6			—			21.3			0.3			6.0			1.5			9.2
Acquired in-process research and development													—			27.5			—			112.5
Total cost and expenses	1,424.3			1,530.5			5,088.5			4,312.6			1,793.8			1,741.4			5,441.7			5,481.1
Income from operations	1,653.5			1,425.3			3,878.4			4,264.2			1,806.3			1,697.6			5,264.9			4,445.5
Other income (expense), net	(43.6		)	(58.1		)	(149.4		)	(169.4		)	(27.3		)	115.1			132.6			39.6
Income before income tax expense and equity in loss of investee, net of tax	1,609.9			1,367.2			3,729.0			4,094.8			1,779.0			1,812.7			5,397.5			4,485.1
Income tax expense	383.8			337.0			892.6			1,047.0			211.3			369.8			881.9			956.0
Equity in loss of investee, net of tax	—			—			—			—			21.8			—			66.8			—
Net income	1,226.1			1,030.2			2,836.4			3,047.8			1,545.9			1,442.9			4,448.8			3,529.1
Net income (loss) attributable to noncontrolling interests, net of tax	—			(2.7		)	(0.1		)	(5.8		)	—			(1.5		)	—			45.2
Net income attributable to Biogen Inc.	$	1,226.1		$	1,032.9		$	2,836.5		$	3,053.6		$	1,545.9		$	1,444.4		$	4,448.8		$	3,483.9

Net income per share:
Basic earnings per share attributable to Biogen Inc.	$	5.80		$	4.72		$	13.32		$	13.95		$	8.40		$	7.17		$	23.38		$	16.86
Diluted earnings per share attributable to Biogen Inc.	$	5.79		$	4.71		$	13.30		$	13.92		$	8.39		$	7.15		$	23.35		$	16.83

Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Inc.	211.4			218.9			213.0			219.0			184.0			201.4			190.3			206.6
Diluted earnings per share attributable to Biogen Inc.	211.8			219.4			213.3			219.4			184.2			201.9			190.5			207.0


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2017			2016			2017			2016			2019		2018			2019			2018
Net income attributable to Biogen Inc.	$	1,226.1		$	1,032.9		$	2,836.5		$	3,053.6		$	1,545.9	$	1,444.4		$	4,448.8		$	3,483.9
Other comprehensive income:
Unrealized gains (losses) on securities available for sale, net of tax	1.0			(5.4		)	6.6			1.6			0.1		(0.2		)	10.3			(1.8		)
Unrealized gains (losses) on cash flow hedges, net of tax	(35.5		)	1.3			(162.3		)	(17.0		)	59.1		5.2			38.1			109.0
Gains (losses) on net investment hedges													21.2		—			46.9			—
Unrealized gains (losses) on pension benefit obligation, net of tax	—			0.4			(0.5		)	1.3			0.8		(0.2		)	1.5			0.2
Currency translation adjustment	43.9			(14.4		)	146.7			(62.8		)	79.4		8.5			51.3			(38.8		)
Total other comprehensive income (loss), net of tax	9.4			(18.1		)	(9.5		)	(76.9		)	160.6		13.3			148.1			68.6
Comprehensive income attributable to Biogen Inc.	1,235.5			1,014.8			2,827.0			2,976.7			1,706.5		1,457.7			4,596.9			3,552.5
Comprehensive income (loss) attributable to noncontrolling interests, net of tax	—			(2.6		)	(0.1		)	(5.7		)	—		(1.5		)	(0.4		)	45.2
Comprehensive income	$	1,235.5		$	1,012.2		$	2,826.9		$	2,971.0		$	1,706.5	$	1,456.2		$	4,596.5		$	3,597.7



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



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



		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Income — For the Three and Nine Months Ended September 30, ~~2017~~2019 and ~~2016~~2018	5

	Condensed Consolidated Statements of Comprehensive Income — For the Three and Nine Months Ended September 30, ~~2017~~2019 and ~~2016~~2018	6

	Condensed Consolidated Balance Sheets — As of September 30, ~~2017~~2019 and December 31, ~~2016~~2018	7

	Condensed Consolidated Statements of Cash Flows — For the Nine Months Ended September 30, ~~2017~~2019 and ~~2016~~2018	8

	~~Notes to~~ Condensed Consolidated ~~Financial~~ Statements of Equity — For the Three and Nine Months Ended September 30, 2019 and 2018	9

	Notes to Condensed Consolidated Financial Statements	13

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3749

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6275

Item 4.	Controls and Procedures	6477

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	6578

Item 1A.	Risk Factors	6578

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7993

Item 6.	Exhibits	7993

Signatures		8195


	As of September 30, 2017			As of December 31, 2016			As of September 30, 2019			As of December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	1,548.1		$	2,326.5		$	2,343.9		$	1,224.6
Marketable securities	1,960.2			2,568.6			2,093.5			2,313.4
Accounts receivable, net	1,567.5			1,441.6			1,933.5			1,958.5
Due from anti-CD20 therapeutic programs	518.0			300.6			582.3			526.9
Inventory	1,007.2			1,001.6			751.8			929.9
Other current assets	967.0			1,093.3			743.2			687.6
Total current assets	7,568.0			8,732.2			8,448.2			7,640.9
Marketable securities	3,062.0			2,829.4			1,813.9			1,375.9
Property, plant and equipment, net	2,995.9			2,501.8			3,138.1			3,601.2
Operating lease assets							422.0			—
Intangible assets, net	4,019.4			3,808.3			3,392.4			3,120.0
Goodwill	4,127.5			3,669.3			5,746.1			5,706.4
Deferred tax asset							3,284.5			2,153.9
Investments and other assets	1,300.4			1,335.8			1,238.8			1,690.6
Total assets	$	23,073.2		$	22,876.8		$	27,484.0		$	25,288.9
LIABILITIES AND EQUITY
Current liabilities:
Current portion of notes payable and other financing arrangements	$	573.2		$	4.7
Current portion of notes payable							$	1,495.3		$	—
Taxes payable	121.3			231.9			125.6			63.5
Accounts payable	298.7			279.8			382.2			370.5
Accrued expenses and other	2,455.2			2,903.5			2,429.1			2,861.2
Total current liabilities	3,448.4			3,419.9			4,432.2			3,295.2
Notes payable and other financing arrangements	5,938.3			6,512.7
Notes payable							4,458.2			5,936.5
Deferred tax liability	120.7			93.1			2,820.4			1,636.2
Long-term operating lease liabilities							410.5			—
Other long-term liabilities	716.9			722.5			1,370.9			1,389.4
Total liabilities	10,224.3			10,748.2			13,492.2			12,257.3
Commitments and contingencies
Equity:
Biogen Inc. shareholders’ equity:
Preferred stock, par value $0.001 per share	—			—			—			—
Common stock, par value $0.0005 per share	0.1			0.1			0.1			0.1
Additional paid-in capital	59.2			—			—			—
Accumulated other comprehensive loss	(329.4		)	(319.9		)	(92.3		)	(240.4		)
Retained earnings	16,107.7			15,071.6			17,065.2			16,257.0
Treasury stock, at cost	(2,977.1		)	(2,611.7		)	(2,977.1		)	(2,977.1		)
Total Biogen Inc. shareholders’ equity	12,860.5			12,140.1			13,995.9			13,039.6
Noncontrolling interests	(11.6		)	(11.5		)	(4.1		)	(8.0		)
Total equity	12,848.9			12,128.6			13,991.8			13,031.6
Total liabilities and equity	$	23,073.2		$	22,876.8		$	27,484.0		$	25,288.9



	Preferred stock			Common stock				Additional paid-in capital			Accumulated other comprehensive loss			Retained earnings			Treasury stock					Total Biogen Inc. shareholders’ equity			Noncontrolling interests			Total equity
	Shares	Amount		Shares		Amount		Additional paid-in capital			Accumulated other comprehensive loss			Retained earnings			Shares		Amount			Total Biogen Inc. shareholders’ equity			Noncontrolling interests			Total equity
Balance, June 30, 2019	—	$	—	208.6		$	0.1	$	—		$	(252.9	)	$	16,182.8		(23.8	)	$	(2,977.1	)	$	12,952.9		$	(4.1	)	$	12,948.8
Net income														1,545.9								1,545.9			—			1,545.9
Other comprehensive income (loss), net of tax											160.6											160.6			—			160.6
Capital contribution by noncontrolling interest																						—			—			—
Repurchase of common stock pursuant to the 2019 Share Repurchase Program, at cost																	(3.1	)	(717.9		)	(717.9		)				(717.9		)
Retirement of common stock pursuant to the 2019 Share Repurchase Program, at cost				(3.1	)	—		(55.1		)				(662.8		)	3.1		717.9			—						—
Issuance of common stock under stock option and stock purchase plans				0.1		—		7.3														7.3						7.3
Issuance of common stock under stock award plan				0.1		—		—						(0.7		)						(0.7		)				(0.7		)
Compensation related to share-based payments								47.8														47.8						47.8
Balance, September 30, 2019	—	$	—	205.7		$	0.1	$	—		$	(92.3	)	$	17,065.2		(23.8	)	$	(2,977.1	)	$	13,995.9		$	(4.1	)	$	13,991.8


•	Adds unit-of-account guidance to ASC 808, Collaborative Arrangements, to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606; and



(In millions)
Cash and cash equivalents	$	107.8
Marketable securities	7.5
In-process research and development intangible assets	700.0
Goodwill	112.6
Deferred tax liability	(77.0		)
Other, net	1.3
Total purchase price	$	852.2



(In millions)
Assets
Cash	$	302.7
Accounts receivable	144.7
Inventory	116.1
Property, plant and equipment, net	20.2
Intangible assets, net	56.8
Goodwill	314.1
Other, net	53.7
Assets transferred, net	$	1,008.3

Liabilities
Accrued expenses and other current liabilities	$	87.8
Other long-term liabilities	67.7
Liabilities transferred, net	$	155.5



(In millions)	Discounts			Contractual Adjustments			Returns			Total
Balance, as of December 31, 2018	$	127.8		$	888.8		$	34.7		$	1,051.3
Current provisions relating to sales in current year	480.3			2,149.7			16.1			2,646.1
Adjustments relating to prior years	(0.4		)	(46.7		)	4.6			(42.5		)
Payments/credits relating to sales in current year	(349.3		)	(1,510.0		)	(0.7		)	(1,860.0		)
Payments/credits relating to sales in prior years	(129.3		)	(564.4		)	(15.4		)	(709.1		)
Balance, as of September 30, 2019	$	129.1		$	917.4		$	39.3		$	1,085.8



(In millions)	As of September 30, 2019		As of December 31, 2018
Reduction of accounts receivable, net	$	201.6	$	176.6
Component of accrued expenses and other	884.2		874.7
Total revenue-related reserves	$	1,085.8	$	1,051.3



	For the Three Months Ended September 30,
(In millions)	2019						2018
	United States		Rest of World		Total		United States		Rest of World		Total
Multiple Sclerosis (MS):
TECFIDERA	$	842.0	$	280.4	$	1,122.4	$	842.1	$	247.9	$	1,090.0
Interferon*	360.3		169.7		530.0		421.5		168.6		590.1
TYSABRI	263.0		220.6		483.6		253.0		217.2		470.2
FAMPYRA	—		24.2		24.2		—		22.5		22.5
Subtotal: MS product revenues	1,465.3		694.9		2,160.2		1,516.6		656.2		2,172.8

Spinal Muscular Atrophy:
SPINRAZA	236.7		310.4		547.1		223.9		243.8		467.7

Biosimilars:
BENEPALI	—		115.9		115.9		—		123.4		123.4
IMRALDI	—		49.3		49.3		—		—		—
FLIXABI	—		18.4		18.4		—		11.4		11.4
Subtotal: Biosimilar product revenues	—		183.6		183.6		—		134.8		134.8

Other:
FUMADERM	—		3.8		3.8		—		4.8		4.8
Total product revenues	$	1,702.0	$	1,192.7	$	2,894.7	$	1,740.5	$	1,039.6	$	2,780.1



	For the Nine Months Ended September 30,
(In millions)	2019						2018
	United States		Rest of World		Total		United States		Rest of World		Total
Multiple Sclerosis (MS):
TECFIDERA	$	2,429.5	$	841.9	$	3,271.4	$	2,396.8	$	766.9	$	3,163.7
Interferon*	1,067.3		518.0		1,585.3		1,237.5		528.4		1,765.9
TYSABRI	772.3		647.0		1,419.3		768.2		631.3		1,399.5
FAMPYRA	—		71.2		71.2		—		69.9		69.9
ZINBRYTA	—		—		—		—		1.4		1.4
Subtotal: MS product revenues	4,269.1		2,078.1		6,347.2		4,402.5		1,997.9		6,400.4

Spinal Muscular Atrophy:
SPINRAZA	690.6		863.2		1,553.8		617.8		636.5		1,254.3

Biosimilars:
BENEPALI	—		360.2		360.2		—		359.9		359.9
IMRALDI	—		132.3		132.3		—		—		—
FLIXABI	—		49.9		49.9		—		29.2		29.2
Subtotal: Biosimilar product revenues	—		542.4		542.4		—		389.1		389.1

Other:
FUMADERM	—		11.6		11.6		—		17.3		17.3
Total product revenues	$	4,959.7	$	3,495.3	$	8,455.0	$	5,020.3	$	3,040.8	$	8,061.1



(In millions)	As of September 30, 2019
2019 (remaining three months)	$	65.0
2020	255.0
2021	215.0
2022	215.0
2023	220.0
2024	210.0



(In millions)	As of September 30, 2017
2017 (remaining three months)	$	106.8
2018	421.3
2019	404.0
2020	389.6
2021	256.6
2022	244.7



(In millions)	As of September 30, 2017		As of December 31, 2016
Reduction of accounts receivable	$	197.4	$	166.9
Component of accrued expenses and other	467.2		438.6
Total reserves	$	664.6	$	605.5



		As of September 30, 2019							As of December 31, 2018
(In millions)	Estimated Life	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Out-licensed patents	13-23 years	$	543.3	$	(542.5	)	$	0.8	$	543.3	$	(542.3	)	$	1.0
Developed technology	15-28 years	3,005.3		(2,764.6		)	240.7		3,005.3		(2,734.8		)	270.5
In-process research and development	Indefinite until commercialization	954.8		—			954.8		476.0		—			476.0
Trademarks and tradenames	Indefinite	64.0		—			64.0		64.0		—			64.0
Acquired and in-licensed rights and patents	4-18 years	3,638.7		(1,506.6		)	2,132.1		3,638.7		(1,330.2		)	2,308.5
Total intangible assets		$	8,206.1	$	(4,813.7	)	$	3,392.4	$	7,727.3	$	(4,607.3	)	$	3,120.0



		As of September 30, 2017							As of December 31, 2016
(In millions)	Estimated Life	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Out-licensed patents	13-23 years	$	543.3	$	(532.7	)	$	10.6	$	543.3	$	(523.6	)	$	19.7
Developed technology	15-23 years	3,005.3		(2,675.8		)	329.5		3,005.3		(2,634.3		)	371.0
In-process research and development	Indefinite until commercialization	680.6		—			680.6		648.0		—			648.0
Trademarks and tradenames	Indefinite	64.0		—			64.0		64.0		—			64.0
Acquired and in-licensed rights and patents	4-18 years	4,002.6		(1,067.9		)	2,934.7		3,481.7		(776.1		)	2,705.6
Total intangible assets		$	8,295.8	$	(4,276.4	)	$	4,019.4	$	7,742.3	$	(3,934.0	)	$	3,808.3



(In millions)	As of September 30, 2019
Goodwill, beginning of period	$	5,706.4
Increase in goodwill	112.6
Elimination of goodwill allocated to Hillerød, Denmark manufacturing operations	(69.5		)
Other	(3.4		)
Goodwill, end of period	$	5,746.1



As of September 30, 2019 (In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,655.8	$	—	$	1,655.8	$	—
Marketable debt securities:
Corporate debt securities	2,702.2		—		2,702.2		—
Government securities	868.2		—		868.2		—
Mortgage and other asset backed securities	337.0		—		337.0		—
Marketable equity securities	336.7		18.5		318.2		—
Derivative contracts	161.7		—		161.7		—
Plan assets for deferred compensation	26.3		—		26.3		—
Total	$	6,087.9	$	18.5	$	6,069.4	$	—
Liabilities:
Derivative contracts	$	9.8	$	—	$	9.8	$	—
Contingent consideration obligations	343.5		—		—		343.5
Total	$	353.3	$	—	$	9.8	$	343.5



As of September 30, 2017 (In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,184.3	$	—	$	1,184.3	$	—
Marketable debt securities:
Corporate debt securities	2,584.7		—		2,584.7		—
Government securities	1,870.0		—		1,870.0		—
Mortgage and other asset backed securities	567.5		—		567.5		—
Marketable equity securities	11.8		11.8		—		—
Derivative contracts	1.6		—		1.6		—
Plan assets for deferred compensation	30.1		—		30.1		—
Total	$	6,250.0	$	11.8	$	6,238.2	$	—
Liabilities:
Derivative contracts	$	106.2	$	—	$	106.2	$	—
Contingent consideration obligations	522.1		—		—		522.1
Total	$	628.3	$	—	$	106.2	$	522.1



As of December 31, 2018 (In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	705.5	$	—	$	705.5	$	—
Marketable debt securities:
Corporate debt securities	2,459.2		—		2,459.2		—
Government securities	969.6		—		969.6		—
Mortgage and other asset backed securities	260.5		—		260.5		—
Marketable equity securities	615.4		51.7		563.7		—
Derivative contracts	66.9		—		66.9		—
Plan assets for deferred compensation	25.4		—		25.4		—
Total	$	5,102.5	$	51.7	$	5,050.8	$	—
Liabilities:
Derivative contracts	$	24.6	$	—	$	24.6	$	—
Contingent consideration obligations	409.8		—		—		409.8
Total	$	434.4	$	—	$	24.6	$	409.8



As of December 31, 2016 (In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	2,039.6	$	—	$	2,039.6	$	—
Marketable debt securities:
Corporate debt securities	2,663.8		—		2,663.8		—
Government securities	2,172.5		—		2,172.5		—
Mortgage and other asset backed securities	561.7		—		561.7		—
Marketable equity securities	24.9		24.9		—		—
Derivative contracts	61.0		—		61.0		—
Plan assets for deferred compensation	34.5		—		34.5		—
Total	$	7,558.0	$	24.9	$	7,533.1	$	—
Liabilities:
Derivative contracts	$	13.6	$	—	$	13.6	$	—
Contingent consideration obligations	467.6		—		—		467.6
Total	$	481.2	$	—	$	13.6	$	467.6


As of September 30, 2017 (In millions)	Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Amortized Cost
As of September 30, 2019 (In millions)										Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities
Current	$	1,042.9	$	0.2	$	(0.4	)	$	1,043.1	$	1,655.9	$	1.5	$	—		$	1,657.4
Non-current	1,541.8		2.2		(2.1		)	1,541.7		1,040.4		4.7		(0.3		)	1,044.8
Government securities
Current	916.0		—		(0.8		)	916.8		435.6		0.5		(0.1		)	436.0
Non-current	954.0		0.4		(3.4		)	957.0		431.8		0.8		(0.4		)	432.2
Mortgage and other asset backed securities
Current	1.3		—		—			1.3		0.1		—		—			0.1
Non-current	566.2		1.3		(1.4		)	566.3		335.7		1.6		(0.4		)	336.9
Total marketable debt securities	$	5,022.2	$	4.1	$	(8.1	)	$	5,026.2	$	3,899.5	$	9.1	$	(1.2	)	$	3,907.4
Marketable equity securities, non-current	$	11.8	$	—	$	(2.6	)	$	14.4	$	218.8	$	120.7	$	(2.8	)	$	336.7



	Notional Amount
(In millions)	As of September 30, 2019		As of December 31, 2018
Euro	$	1,943.7	$	1,701.4
British pound	60.9		215.3
Swiss franc	36.9		131.4
Japanese yen	29.8		98.8
Canadian dollar	25.0		92.2
Total foreign currency forward contracts	$	2,096.3	$	2,239.1



	Notional Amount
Foreign Currency: (In millions)	As of September 30, 2017		As of December 31, 2016
Euro	$	1,573.4	$	871.7
British pound	39.7		—
Canadian dollar	19.7		—
Swiss franc	5.1		—
Total foreign currency forward contracts	$	1,637.9	$	871.7



For the Three Months Ended September 30,
Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions)							Net Gains/(Losses) Recognized in Operating Income (in millions)
Location	2019			2018			Location	2019		2018
Revenues	$	35.2		$	(8.4	)	Revenues	$	0.8	$	0.3
Operating expenses	$	(0.8	)	$	(0.3	)	Operating expenses	$	0.4	$	0.4



For the Three Months Ended September 30,
Net Gains/(Losses) Reclassified from AOCI into Operating Income (Effective Portion)							Net Gains/(Losses) Recognized into Net Income (Ineffective Portion)
Location	2017			2016			Location	2017		2016
Revenue	$	(18.8	)	$	(5.2	)	Other income (expense)	$	0.7	$	(0.6	)
Operating expenses	$	0.5		$	(0.2	)	Other income (expense)	$	0.2	$	—

																											For the Nine Months Ended September 30,
Net Gains/(Losses) Reclassified from AOCI into Operating Income (Effective Portion)							Net Gains/(Losses) Recognized into Net Income (Ineffective Portion)
Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions)														Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions)							Net Gains/(Losses) Recognized in Operating Income (in millions)
Location	2017			2016			Location	2017			2016				2019			2018			Location	2019			2018
Revenue	$	(15.1	)	$	(0.7	)	Other income (expense)	$	6.7		$	3.4
Revenues															$	79.8		$	(51.7	)	Revenues	$	8.2		$	7.3
Operating expenses	$	0.7		$	(0.4	)	Other income (expense)	$	(0.1	)	$	(0.3	)		$	(2.0	)	$	0.6		Operating expenses	$	(0.8	)	$	—



For the Three Months Ended September 30,
Net Gains/(Losses) Recognized in Other Comprehensive Income (Effective Portion) (in millions)					Net Gains/(Losses) Recognized in Other Comprehensive Income (Amounts Excluded from Effectiveness Testing) (in millions)					Net Gains/(Losses) Recognized in Net Income (Amounts Excluded from Effectiveness Testing) (in millions)
Location	2019		2018		Location	2019		2018		Location	2019		2018
Gains (losses) on net investment hedge	$	22.0	$	—	Gains (losses) on net investment hedge	$	1.4	$	—	Other income (expense)	$	2.2	$	—



(In millions)	Balance Sheet Location	As of September 30, 2019		As of December 31, 2018
Cash Flow Hedging Instruments:
Asset derivative instruments	Other current assets	$	152.2	$	65.8
	Investments and other assets	$	7.5	$	—
Liability derivative instruments	Accrued expenses and other	$	1.6	$	6.9
Fair Value Hedging Instruments:
Liability derivative instruments	Accrued expenses and other	$	2.1	$	14.5
Other Derivatives:
Asset derivative instruments	Other current assets	$	2.0	$	1.1
Liability derivative instruments	Accrued expenses and other	$	6.1	$	3.2



		Fair Value
(In millions)	Balance Sheet Location	As of September 30, 2017
Hedging Instruments:
Asset derivatives	Investments and other assets	$	0.3
Liability derivatives	Accrued expenses and other	$	80.8
	Other long-term liabilities	$	24.2
Other Derivatives:
Asset derivatives	Other current assets	$	1.3
Liability derivatives	Accrued expenses and other	$	1.2


(1)	Represents sublease income expected to be received for the vacated manufacturing facility in Cambridge, MA, the vacated portion of our Weston, MA facility and other facilities throughout the world.



	As of September 30, 2019
Weighted average remaining lease term in years	7.2
Weighted average discount rate	3.3	%



(In millions)	Income Statement Location	Amounts Reclassified from Accumulated Other Comprehensive Income
		For the Three Months Ended September 30,						For the Nine Months Ended September 30,
		2019			2018			2019			2018
Gains (losses) on securities available for sale	Other income (expense)	$	0.6		$	(0.1	)	$	1.6		$	(7.7	)
	Income tax benefit (expense)	(0.1		)	—			(0.3		)	1.6

Gains (losses) on cash flow hedges	Revenues	35.2			(8.4		)	79.8			(51.7		)
	Operating expenses	(0.8		)	(0.3		)	(2.0		)	0.6
	Other income (expense)	0.1			0.1			0.2			0.2
	Income tax benefit (expense)	(0.1		)	—			(0.3		)	0.2

Gains (losses) on net investment hedge	Other income (expense)	2.2			—			6.6			—
	Income tax benefit (expense)	—			—			—			—

Total reclassifications, net of tax		$	37.1		$	(8.7	)	$	85.6		$	(56.8	)