$33.8 million to reflect Eisai's 45% share of the $75.0 million milestone expense.

For additional information on our collaboration arrangements with Eisai, please read Note 17, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report.

For additional information on our collaboration arrangement with Neurimmune, please read Note 18, Investments in Variable Interest Entities, to our condensed consolidated financial statements included in this report.

Other Funding Commitments

As of ~~March 31,~~June 30, 2020, we have several ongoing clinical studies in various clinical trial stages. Our most significant clinical trial expenditures are to contract research organizations (CROs). The contracts with CROs are generally cancellable, with notice, at our option. We recorded accrued expenses of approximately ~~$14.2~~$9.1 million in our condensed consolidated balance sheet for expenditures incurred by CROs as of ~~March 31,~~June 30, 2020. We have approximately ~~$602.5~~$567.1 million in cancellable future commitments based on existing CRO contracts as of ~~March 31, 2020.~~

In connection with our global licensing collaboration agreement with Sangamo, which closed in April 2020, we purchased approximately 24 million shares of Sangamo common stock at $9.21 per share or $225.0 million, which are subject to transfer restrictions. During the second quarter of 2020 we plan to record an asset in investments and other assets in our condensed consolidated balance sheets to reflect the initial fair value of the Sangamo common stock acquired and a charge of approximately $85.0 million to research and development expense in our condensed consolidated statements of income to reflect the premium paid for the Sangamo common stock. We will also make an upfront payment of $125.0 million that will be recorded as research and development expense in the second quarter ofJune 30, 2020.

As part of the sale of our Hillerød, Denmark manufacturing operations to FUJIFILM, we ~~have~~ provided FUJIFILM with certain minimum batch production commitment guarantees. There is a risk that the minimum contractual batch production commitments will not be met. ~~Based upon current estimates, we expect to incur an~~Our estimate of the adverse commitment obligation ofis approximately $74.0 million ~~associated with such guarantees and have accrued for this obligation~~ as of ~~March 31,~~June 30, 2020. We developed this estimate using a probability-weighted estimate of future manufacturing activity and may adjust this estimate based upon changes in business conditions, which may result in the increase or reduction of this adverse commitment obligation in subsequent periods.

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 ~~March 31,~~June 30, 2020, we have approximately ~~$133.9~~$158.2 million of liabilities associated with uncertain tax positions.

As of ~~both March 31,~~June 30, 2020 and December 31, 2019, included in other long-term liabilities we have accrued ~~income tax liabilities of~~approximately $635.0 million and approximately $697.0 million, respectively, under a

one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings (the Transition Toll Tax). OfThe decrease of approximately $62.0 million between December 31, 2019 and June 30, 2020, is related to the ~~amounts accrued as of March 31, 2020, no amounts are~~amount that

is 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.~~year. 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., 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 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.

For a discussion of our critical accounting estimates, please read Part II,Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2019 Form 10-K. ~~Except as discussed above, there~~There have been no material changes to ~~these~~our critical accounting estimates since our 2019 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About 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 and pricing pressures worldwide as well as changes in economic conditions in the ~~all~~ markets in which we operate as a result of the COVID-19 pandemic. 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, including the impact of the COVID-19 pandemic. As a result, our 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, Japanese yen and 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. 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. 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. 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.

During the second quarter of 2018 the International Practices Task Force of the Center for Audit Quality categorized Argentina as a country with a projected three-year cumulative inflation rate greater than 100%, which indicated that Argentina's economy

is highly inflationary. This categorization did not have a material impact on our results of operations or financial position as of ~~March 31,~~June 30, 2020, and is not expected to have a material impact on our results of operations or financial position in the 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 1518 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 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 ~~March 31,~~June 30, 2020 and December 31, 2019, 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 ~~$318.8~~$375.5 million and $265.0 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~~approximately 49.9% ownership percentage in Samsung ~~Bioepis to approximately 49.9%.~~Bioepis. 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 ~~seven~~four months. As of ~~March 31,~~June 30, 2020 and December 31, 2019, a hypothetical adverse 10% movement would result in a hypothetical decrease in fair value of approximately ~~$40.8~~$41.7 million and $43.0 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, including changes resulting from the impact of the COVID-19 pandemic. 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 ~~March 31,~~June 30, 2020 and December 31, 2019, we estimate that such hypothetical 100 basis point adverse movement would result in a hypothetical loss in fair value of approximately ~~$13.6~~$17.6 million and $21.0 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 ~~March 31, 2020 and~~ December 31, 2019, a 100 basis-point adverse movement (increase in LIBOR) would increase annual interest expense by approximately $6.8 million. In May 2020 we settled our interest rate swap contracts in conjunction with our early redemption of our 2.90% Senior Notes.

Pricing Pressure

Governments in certain international markets in which we operate have implemented measures, and may in the future implement new or additional measures, to reduce health care costs to 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 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. In

addition, certain countries set prices by reference to the prices in other countries where our products are marketed. Thus, our inability to obtain and maintain adequate prices in a particular country may adversely affect our ability to 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.

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, enactments to reform health care insurance programs and increasing pressure from social sources could significantly influence the 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 consolidated financial position or 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, impose restrictions on the coverage of certain drugs.

Our products ~~are also susceptible~~continue to face increasing competition in many markets from generic versions, ~~biosimilars~~prodrugs and ~~prodrugs~~biosimilars of existing products as well as products approved under abbreviated regulatory pathways. Such products 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 are able to charge for our products and the volume of products we sell, which will negatively impact our revenues. In addition, when a generic version of one of our products is commercialized, it may, in some cases, be automatically substituted for our product and reduce our revenues in a short period of time.

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, including as a result of the COVID-19 pandemic, 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. Additionally, we could see an increase in the amount of time our trade receivables are paid by certain foreign countries that have been disproportionately impacted by the COVID-19 pandemic. To date, we have not experienced any significant losses with respect to the collection of our accounts receivable.

We believe that our allowance for doubtful accounts was adequate as of ~~March 31,~~June 30, 2020 and December 31, 2019. 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 ~~March 31,~~June 30, 2020. 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 ~~March 31,~~June 30, 2020, 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

For a discussion of legal proceedings as of ~~March 31,~~June 30, 2020, please read Note ~~18,~~ 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 products.

Our revenues depend upon continued sales of our products, as well as the financial rights we have in our anti-CD20 therapeutic programs, and, unless we develop, acquire rights to and/or commercialize new products and technologies, we will be substantially dependent on sales from our products and our financial rights in our anti-CD20 therapeutic programs for many years. Additionally, a significant portion of our revenues are concentrated on sales of our products in increasingly competitive markets and in markets affected directly and indirectly by the COVID-19 pandemic. Any of the following negative developments relating to any of our 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;

~~our ability to maintain a positive reputation among patients, healthcare providers and others, which may be impacted by our pricing and reimbursement decisions;~~

the introduction or greater acceptance of competing products, including generics, prodrugs, biosimilars ~~prodrugs~~ and products approved under abbreviated regulatory pathways; for example, TECFIDERA may face generic competition in the U.S. in the near future;

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

adverse legal, administrative, regulatory or legislative developments;

our ability to maintain a positive reputation among patients, healthcare providers and others, which may be impacted by our pricing and reimbursement decisions; or

the inability of patients to receive a diagnosis, receive prescriptions or administration of our products or a decision to prescribe and administer competitive therapies as a direct or indirect result of the COVID-19 pandemic.

SPINRAZA has been approved by, among others, the FDA, the European Commission and the Japanese Ministry of Health, Labor and Welfare, and is in the early stages of commercial launch in 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:

the introduction of a new gene therapy product that was approved in the U.S. in May 2019 and in the E.U. in May 2020 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 limited marketing experience within certain SMA markets, which may impact our ability to develop additional relationships with the associated medical and scientific community;~~

~~the lack of readiness of healthcare providers within certain SMA markets to treat patients with SMA; or~~

the delay of SPINRAZA doses as hospitals prioritize the treatment of COVID-19 patients and/or patients decide to delay treatment as a result of the COVID-19 ~~pandemic.~~pandemic;

the lack of readiness of healthcare providers within certain SMA markets to treat patients with SMA; or

our limited marketing experience within certain SMA markets, which may impact our ability to develop additional relationships with the associated medical and scientific community.

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 afforded to our products and processes in the U.S. and in other important markets remains uncertain and depends, in part, upon decisions of 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 New Drug Application 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, a major portion of revenues for that product may be reduced in a short period of time. When others exploit our inventions, the expected benefit from them are reduced. 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 patents, regulatory exclusivities or other 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 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 are often protracted, expensive and distracting to management. Negative outcomes of such proceedings adversely affect the validity and scope of our patent or other proprietary rights. Settlements of Hatch-Waxman litigation typically result in reducing the period of patent protection, accelerating reduction in revenue from affected products. Adverse outcomes in intellectual property litigation also could 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.

The ongoing COVID-19 pandemic may, directly or indirectly, adversely affect our business, results of operations and financial condition.

Our business could be materially adversely affected, directly or indirectly, by the widespread outbreak of contagious disease, including the ongoing COVID-19 pandemic, which has spread to many of the countries in which we, our customers, our suppliers and our collaboration partners do business. National, state and local governments in affected regions have implemented and may continue to implement safety precautions, including quarantines, border closures, increased border controls, travel restrictions, shelter in place orders and shutdowns, business closures, cancellations of public gatherings and other measures. Organizations and individuals are taking additional steps to avoid or reduce infection, including limiting travel and staying home from work. These measures are disrupting normal business operations both in and outside of affected areas and have had significant negative impacts on businesses and financial markets worldwide.

We continue to monitor our operations and applicable government recommendations, and we have made modifications to our normal operations because of the COVID-19 ~~pandemic, including requiring~~pandemic. In the U.S. and in most other key markets, our office-based employees began working from home in early March 2020, while ensuring essential staffing levels in our operations remained in place, including maintaining key personnel in our laboratories and manufacturing facilities, and many may continue to work ~~remotely.~~ remotely for an indefinite period of time. Remote working arrangements could impact employees’ productivity and morale. Further, as our employees work from geographic areas across the globe, we have required, and will in the future require, investment of resources and close

monitoring of local regulations and requirements that may continually change due to the COVID-19 pandemic and we may experience unpredictability in our expenses, employee productivity and employee work culture.

Notwithstanding ~~these~~the protective measures we have taken to ensure the health and safety of our workers, the COVID-19 pandemic could affect the health and availability of our workforce as well as those of the third parties we rely on taking similar measures. If members of our management and other key personnel in critical functions across our organization are unable to perform their duties or have limited availability due to COVID-19, we may not be able to execute on our business strategy and/or our operations may be negatively impacted. We may also experience limitations in employee resources, including because of sickness of employees or their families or the desire of employees to avoid contact with individuals or large groups of people. In addition, we have experienced and will continue to experience disruptions to our business

operations resulting from quarantines, self-isolations and other restrictions on the ability of our employees to perform their jobs.

Additionally, with so many of our employees now working remotely, the risk of cyber-attacks or other privacy or data security incidents may be heightened as a result of our moving increasingly towards a remote working environment. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit the COVID-19 pandemic. An extended period of remote working by our employees could also strain our technology resources and introduce operational risks, including heightened cybersecurity risk.

The COVID-19 pandemic has disrupted business operations. The extent and severity of the impact on our business and clinical trials will be determined largely by the extent of disruptions in the supply chains for our products and product candidates; disruptions in access by patients to our therapies; and delays in the conduct of current and future clinical trials. For example, our Phase 3 study of BIIB093 for large hemispheric infarction has been delayed as this study involves administration of BIIB093 in an acute hospital setting. We have also paused the initiation of new clinical trials for compounds that are known to be immunosuppressants. In addition, the impact of the COVID-19 pandemic on the operations of the FDA and other health authorities may delay potential approvals of our product candidates. We may also see lower new prescriptions or refills of existing prescriptions due to increased unemployment as a result of the COVID-19 pandemic.

While it is not possible at this time to estimate the entirety of the impact that the COVID-19 pandemic will have on our business, operations, employees, customers, suppliers or our collaboration partners, continued spread of COVID-19, measures taken by governments, actions taken to protect employees and the broad impact of the pandemic on all business activities may materially and adversely affect our business, results of operations and financial condition.

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.

We may be required to delay the development of a product candidate or delay ongoing clinical trials as a direct or indirect result of the COVID-19 pandemic. For example, our Phase 3 study of BIIB093 for large hemispheric infarction has been delayed as this study involves administration of BIIB093 in an acute hospital setting. We have also paused the initiation of new clinical trials for compounds that are known to be immunosuppressants.

Even if we could 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 the standard of care or other opportunities in our pipeline.

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, substantially greater financial, marketing, 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. In addition, as a result of the COVID-19 pandemic, we have suspended the vast majority of our in-person interactions by our customer-facing professionals in healthcare settings,

which will limit our ability to market our products and educate physicians, which, in turn, could have an adverse effect on our ability to compete in the marketing and sales of our products. Further, our ability to compete may be impacted by the inability of patients to receive a diagnosis, receive prescriptions or administration of our products or a decision to prescribe and administer competitive therapies as a direct or indirect result of the COVID-19 pandemic.

Our products ~~are also susceptible~~continue to face increasing competition in many markets from the introduction of generics, ~~biosimilars,~~ prodrugs and biosimilars of existing products as well as products approved under abbreviated regulatory pathways. ~~Generic versions of drugs, biosimilars, prodrugs and~~Such 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 are able to charge for our products and the volume of products we sell, which will negatively impact our revenues. In addition, when a generic version of one of our products is commercialized, it may, in some cases, be automatically substituted for our product and reduce our revenues in a short period of time.

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 could 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, including our own products, biosimilars, follow-on products, prodrugs or products approved under 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, biosimilars, follow-on products, prodrugs or products approved under 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, generic or biosimilars of our MS products or any other product from the same class as one of our 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 new gene therapy product that was approved in the U.S. in May 2019 and in the E.U. in May 2020 for the treatment of SMA. Additionally, we are aware of other products in development that, if successfully developed and approved, may compete with SPINRAZA in the SMA market, including potential oral products. Future sales of SPINRAZA may be adversely affected by the commercialization of competing products. In addition, future sales of SPINRAZA may also be adversely affected by the delay of SPINRAZA doses as hospitals prioritize the treatment of COVID-19 patients and/or patients decide to delay treatment.

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. We have in the past made, and may continue to make, significant operating and capital expenditures for potential new products in our

pipeline prior to regulatory approval with no assurance that such investment will be recouped, which may adversely affect our financial condition, business and operations.

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.

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 to decline or experience periods of 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 candidate 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.

Our ability to continue our existing clinical trials or to initiate new clinical trials may be adversely affected, directly or indirectly, by the COVID-19 pandemic. For example, our Phase 3 study of BIIB093 for large hemispheric infarction has been delayed as this study involves administration of BIIB093 in an acute hospital setting. We have open clinical trial sites in countries that have had high incident rates of COVID-19 patients. Restrictions on travel and/or transport of clinical materials, as well as diversion of hospital staff and resources to COVID-19 infected patients, could disrupt trial operations as well as recruitment, possibly resulting in a slowdown in enrollment and/or

deviations from or disruptions in key clinical trial activities, such as clinical trial site monitoring. These challenges may lead to difficulties in meeting protocol-specified procedures. In addition, we may need to make certain adjustments to the operation of clinical trials in an effort to minimize risks to trial data integrity during the COVID-19 pandemic. We have also paused the initiation of new trials for compounds that are known to be immunosuppressants.

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, generic or biosimilar versions of our marketed products or any other products from the same class as one of our 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.

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 (PML) 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.

Sales of our products depend, to a significant extent, on adequate coverage, pricing and reimbursement from 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, 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.

Sales of our products 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;

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 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 obtain and maintain adequate prices in a particular country may not only limit the revenues from our products within that country but may also adversely affect our ability to secure acceptable prices in 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.

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.

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.

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. In particular, the COVID-19 pandemic has caused us to modify our business practices, including the requirement that most of our office-based employees in the U.S. and ~~in most of~~ our other key markets work from home. As a result, we are increasingly dependent upon our technology systems to operate our business and our ability to effectively manage our business depends on the security, reliability and adequacy of our technology systems and data, which includes use of cloud

technologies, including Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). A breakdown, invasion, corruption, destruction or breach of our technology systems, including the cloud technologies that we utilize, 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, including the cloud technologies that we utilize, 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, including the cloud technologies that we utilize, 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. In addition, our increased use of cloud technologies could heighten these and other operational risks, and any failure by cloud technology service providers to adequately safeguard their systems and prevent cyber-attacks could disrupt our operations and result in misappropriation, corruption or loss of confidential or propriety information.

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.

In addition, regulators globally are imposing new data privacy and security requirements, including new and greater monetary fines for privacy violations. For example, the E.U.’s General Data Protection Regulation, which became effective in 2018, established regulations regarding the handling of personal data, and provides an enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to €20.0 million or 4% of the annual global revenues of the infringer, whichever is greater. In addition, new U.S. data privacy and security laws, such as the California Consumer Privacy Act (CCPA) that became effective in January 2020, and others that may be passed, similarly introduce requirements with respect to personal information, and non-compliance with CCPA may result in liability through private actions (subject to statutorily defined damages in the event of certain data breaches) and enforcement. Failure to comply with these current and future laws could result in significant penalties and could have a material adverse effect on our business and results of operations.

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;

delays and disruptions experienced by our collaborators, joint venture partners or third parties due to the COVID-19 pandemic could adversely impact the ability of such parties to fulfill their obligations, which could affect product sales or the clinical development or regulatory approvals of product candidates under joint control;

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 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 product candidates 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, regulatory requirements and/or applicable contractual obligations 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, impact the accuracy and timing of our financial reporting and/or 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, 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 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 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 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 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. These measures have negatively impacted our revenues and may continue to adversely affect our revenues and results of operations in the future.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in the U.S. in March 2020. The CARES Act is aimed at providing emergency assistance and health care for individuals, families and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. Due to the recent enactment of the CARES Act, there is a high degree of uncertainty around its implementation. We expect that additional state and federal healthcare reform measures may be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressures. The ~~recent~~ COVID-19 pandemic may introduce temporary or permanent healthcare reform measures for which we cannot predict the financial implication of on our business.

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 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. In addition, 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. Further, if members of our management and other key personnel in critical functions across our organization are unable to perform their duties or have limited availability due to COVID-19, we may not be able to execute on our business strategy and/or our operations may be negatively impacted.

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, recruitment by competitors or delays in the recruiting and hiring process as a result of the COVID-19 pandemic. 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.

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.~~management as well as our compliance with good practice quality guidelines and regulations. 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 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 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.

Conditions and regulations governing the health care industry are subject to change, with 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;

government shutdowns or relocations may result in delays to the review and approval process, slowing the time necessary for new drug candidates to be reviewed and/or approved, which may adversely affect our business;

government regulations that may be imposed in response to the COVID-19 pandemic may restrict the movement of our global supply chain, divert hospital resources that are necessary to administer certain of our products and/or delay the review of product candidates;

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:

the impact of public health epidemics, such as the COVID-19 pandemic, on employees, the global economy and the delivery of healthcare treatments;

less favorable intellectual property or other applicable laws;

the introduction or greater acceptance of competing products, including generics, biosimilars, prodrugs and 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 departure 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 U.S. 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 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, in order to support our drug development pipeline, 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 would be required. We expect the Solothurn manufacturing facility to be partially operational by the end of 2020; however, there can be no assurance that we will be able to meet our expected timeline or that there will not be any direct or indirect delays resulting from the COVID-19 pandemic. If there are delays in bringing the Solothurn manufacturing facility online, we may not have sufficient large-scale manufacturing capacity to meet our long-term manufacturing requirements.

In addition, we have made 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:

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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, including the impact of the COVID-19 pandemic. 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.

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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.

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.

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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, public health epidemics, natural disasters, power failures, cyber-attacks and numerous other factors. In addition, we are building a large-scale biologics manufacturing facility in Solothurn, Switzerland, which we expect to be partially operational by the end of 2020. However, there can be no assurance that we will be able to meet our expected timeline or that there will not be any direct or indirect delays resulting from the COVID-19 pandemic. If there are delays in ~~bring~~bringing the Solothurn manufacturing facility online, we may not have sufficient large-scale manufacturing capacity to meet our long-term manufacturing requirements.

•

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.


•	Risk Relating to Government Actions. We and/or our third-party providers may be required by the U.S. federal government to manufacture medical supplies needed to treat COVID-19 patients under the Defense Production Act or other acts or orders of government entities, which may result in delays in the manufacturing and supply of our products.

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, including as a result of the COVID-19 pandemic, 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. In addition, as a result of the COVID-19 pandemic, we have suspended in-person interactions by our customer-facing professionals in healthcare settings, which will limit our ability to market our products and educate physicians, which, in turn, could have an adverse effect on our ability to compete in the marketing and sales of our products; and

pandemic, we have suspended the vast majority of our in-person interactions by our customer-facing professionals in healthcare settings, which will limit our ability to market our products and educate physicians, which, in turn, could have an adverse effect on our ability to compete in the marketing and sales of our products; 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~~that 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, divestitures and other business development activities;

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; and

the impact of public health epidemics, such as the COVID-19 pandemic, on employees, the global economy and the delivery of healthcare treatments.

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 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 and regulations either prospectively or retrospectively, including

in response to the COVID-19 pandemic. 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.

The Tax Cuts and Jobs Act of 2017 (2017 Tax Act) resulted in significant changes to the 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 and collaborations to immediate U.S. taxation as global intangible low-taxed income (GILTI) or Subpart F income, and includes base erosion prevention measures on 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 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 accounting and on our business remain subject to developing interpretations of the provisions of the 2017 Tax Act. U.S. Treasury regulations, administrative interpretations or 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 financial condition.

The Swiss Federal Act on Tax Reform and AHV Financing (TRAF) ~~will result~~resulted in significant changes to the Swiss cantonal income tax 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 became 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 rate to compensate for the elimination of the historic favorable cantonal tax regimes. We accounted for the impact of the TRAF and the specific cantonal tax reform changes in the period in which each canton in which we operate enacted the cantonal tax reform. Zug, a canton in which we operate, enacted cantonal tax reform in the third quarter of 2019 and Solothurn, another canton in which we operate, enacted cantonal tax reform in the first quarter of 2020. Upon the enactment of cantonal tax reform, we were required to remeasure our Swiss deferred tax assets and liabilities, to account for the elimination of the historic favorable cantonal tax regimes, the impact of the transitional rules and the change in the statutory cantonal tax rate. Final interpretation of the transitional and new regimes of the TRAF may require further adjustments and changes in our estimates, which could have a significant adverse effect on our business, results of operations or financial condition.

In addition, the 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 unfavorably impact our effective tax rate. These initiatives focus on common international principles for the entitlement to taxation of global corporate profits and minimum global tax 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 an 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. In addition, the COVID-19 pandemic could adversely affect the financial markets in some or all countries worldwide. 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 shares or that we will repurchase shares at favorable prices.

From time to time our Board of Directors authorizes share repurchase programs, including, most recently, our December 2019 Share Repurchase Program. The amount and timing of share repurchases are subject to capital availability and our determination that 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 shares. Our ability to repurchase 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 of, our December 2019 Share Repurchase Program could have a negative effect on our stock price. We can provide no assurance that we will repurchase 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 are experiencing, and have in the past experienced, extreme volatility and disruption, 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.

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 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. 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 during the ~~first~~second quarter of 2020:

Period
Total Number of
Shares Purchased
(#)

Average Price
Paid per Share
($)

Total Number of
Shares Purchased
as Part of Publicly
Announced Programs
(#)

Approximate Dollar Value
of Shares That May Yet Be
Purchased Under
Our Programs
($ in millions)
January 2020 97,807
$ 297.49
97,807
$ 6,250.0
February 2020 975,000
$ 331.24
975,000
$ 5,927.0
March 2020 6,248,925
$ 298.95
6,248,925
$ 4,058.9
Total 7,321,732
$ 303.23



Period	Total Number of Shares Purchased (#)	Average Price Paid per Share ($)		Total Number of Shares Purchased as Part of Publicly Announced Programs (#)	Approximate Dollar Value of Shares That May Yet Be Purchased Under Our Programs ($ in millions)
April 2020	5,675,000	$	314.05	5,675,000	$	2,276.7
May 2020	3,306,307	$	310.52	3,306,307	$	1,250.0
June 2020	—	$	—	—	$	1,250.0
Total	8,981,307	$	312.75

In December 2019 our Board of Directors authorized our December 2019 Share Repurchase Program, which is a program to repurchase up to $5.0 billion of our common stock. Our December 2019 Share Repurchase Program does not have an expiration date. All shares repurchased under our December 2019 Share Repurchase Program will be retired. Under our December 2019 Share Repurchase Program, we repurchased and retired approximately ~~3.2~~9.0 million and 12.2 million shares of our common stock at a cost of approximately ~~$941.1 million~~$2.8 billion and $3.7 billion during the three and six months ended ~~March 31,~~June 30, 2020, respectively. Approximately $1.3 billion remained available under our December 2019 Share Repurchase Program as of June 30, 2020.

In March 2019 our Board of Directors authorized our March 2019 Share Repurchase Program, which was a program to repurchase up to $5.0 billion of our common stock that was completed as of March 31, 2020. All shares repurchased under our March 2019 Share Repurchase Program were retired. Under our March 2019 Share Repurchase Program, we repurchased and retired approximately 4.1 million shares of our common stock at a cost of approximately $1.3 billion during the ~~three~~six months ended ~~March 31,~~June 30, 2020.

From April 1, 2020 through April 22, 2020, we repurchased and retired approximately 4.0 million shares of our common stock at a cost of approximately $1.3 billion under our December 2019 Share Repurchase Program. Approximately $2.8 billion remained available under our December 2019 Share Repurchase Program as of April 22, 2020.

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
4.1		Second Supplemental Indenture, dated April 30, 2020, between Biogen Inc. and U.S. Bank National Association, including the forms of Global Notes attached as Exhibit A and Exhibit B, respectively, thereto. Filed as Exhibit 4.2 to our Current Report on Form 8-K filed on April 30, 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 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 ~~March 31,~~June 30, 2020, formatted in 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 (vi) Notes to Condensed Consolidated Financial Statements.

104++		The cover page from this Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~June 30, 2020, formatted in Inline XBRL.

+ 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/ Jeffrey D. Capello

Jeffrey D. Capello

Executive Vice President and

Chief Financial Officer

(principal financial officer)

~~April 23,~~July 22, 2020

8696



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



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



		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Income — For the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019	5

	Condensed Consolidated Statements of Comprehensive Income — For the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019	6

	Condensed Consolidated Balance Sheets — As of ~~March 31,~~June 30, 2020 and December 31, 2019	7

	Condensed Consolidated Statements of Cash Flows — For the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2020 and 2019	8

	Condensed Consolidated Statements of Equity — For the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019	9

	Notes to Condensed Consolidated Financial Statements	1113

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4145

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6472

Item 4.	Controls and Procedures	6675

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	6776

Item 1A.	Risk Factors	6776

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8494

Item 6.	Exhibits	8495

Signatures		8696



	For the Three Months Ended March 31,
	2020			2019
Revenues:
Product, net	$	2,904.6		$	2,680.0
Revenues from anti-CD20 therapeutic programs	520.4			517.4
Other	109.3			292.4
Total revenues	3,534.3			3,489.8
Cost and expenses:
Cost of sales, excluding amortization and impairment of acquired intangible assets	454.3			602.0
Research and development	476.3			563.7
Selling, general and administrative	570.1			567.7
Amortization and impairment of acquired intangible assets	71.5			68.2
Collaboration profit (loss) sharing	71.8			58.1
Loss on divestiture of Hillerød, Denmark manufacturing operations	—			115.5
(Gain) loss on fair value remeasurement of contingent consideration	(4.6		)	11.5
Restructuring charges	—			0.4
Acquired in-process research and development	75.0			—
Total cost and expenses	1,714.4			1,987.1
Income from operations	1,819.9			1,502.7
Other income (expense), net	(120.5		)	357.3
Income before income tax expense and equity in loss of investee, net of tax	1,699.4			1,860.0
Income tax expense	292.0			422.5
Equity in loss of investee, net of tax	14.8			28.7
Net income	1,392.6			1,408.8
Net income (loss) attributable to noncontrolling interests, net of tax	(6.5		)	—
Net income attributable to Biogen Inc.	$	1,399.1		$	1,408.8

Net income per share:
Basic earnings per share attributable to Biogen Inc.	$	8.10		$	7.17
Diluted earnings per share attributable to Biogen Inc.	$	8.08		$	7.15

Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Inc.	172.8			196.6
Diluted earnings per share attributable to Biogen Inc.	173.1			197.0



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



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



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
Revenues:
Product, net	$	2,795.7		$	2,880.3		$	5,700.3		$	5,560.3
Revenues from anti-CD20 therapeutic programs	478.3			576.4			998.7			1,093.8
Other	407.6			160.0			516.9			452.4
Total revenues	3,681.6			3,616.7			7,215.9			7,106.5
Cost and expenses:
Cost of sales, excluding amortization and impairment of acquired intangible assets	411.1			476.3			865.5			1,078.3
Research and development	647.6			484.8			1,123.9			1,048.5
Selling, general and administrative	555.1			587.6			1,125.2			1,155.3
Amortization and impairment of acquired intangible assets	61.5			70.1			133.0			138.3
Collaboration profit (loss) sharing	21.8			63.5			93.5			121.6
Loss on divestiture of Hillerød, Denmark manufacturing operations	—			(2.3		)	—			113.2
(Gain) loss on fair value remeasurement of contingent consideration	10.0			(20.0		)	5.5			(8.5		)
Restructuring charges	—			0.8			—			1.2
Acquired in-process research and development	—			—			75.0			—
Total cost and expenses	1,707.1			1,660.8			3,421.6			3,647.9
Income from operations	1,974.5			1,955.9			3,794.3			3,458.6
Other income (expense), net	63.0			(197.4		)	(57.5		)	159.9
Income before income tax expense and equity in loss of investee, net of tax	2,037.5			1,758.5			3,736.8			3,618.5
Income tax expense	446.1			248.1			738.2			670.6
Equity in (income) loss of investee, net of tax	(15.1		)	16.3			(0.4		)	45.0
Net income	1,606.5			1,494.1			2,999.0			2,902.9
Net income (loss) attributable to noncontrolling interests, net of tax	64.4			—			57.8			—
Net income attributable to Biogen Inc.	$	1,542.1		$	1,494.1		$	2,941.2		$	2,902.9

Net income per share:
Basic earnings per share attributable to Biogen Inc.	$	9.60		$	7.85		$	17.65		$	15.01
Diluted earnings per share attributable to Biogen Inc.	$	9.59		$	7.85		$	17.61		$	14.99

Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Inc.	160.6			190.3			166.7			193.4
Diluted earnings per share attributable to Biogen Inc.	160.9			190.4			167.0			193.7


	As of March 31, 2020			As of December 31, 2019			As of June 30, 2020			As of December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	2,591.3		$	2,913.7		$	2,384.9		$	2,913.7
Marketable securities	1,269.1			1,562.2			1,942.7			1,562.2
Accounts receivable, net	2,092.6			1,880.5			2,133.6			1,880.5
Due from anti-CD20 therapeutic programs	511.6			590.2			441.1			590.2
Inventory	858.8			804.2			952.7			804.2
Other current assets	683.8			631.0			638.8			631.0
Total current assets	8,007.2			8,381.8			8,493.8			8,381.8
Marketable securities	969.5			1,408.1			922.8			1,408.1
Property, plant and equipment, net	3,281.6			3,247.3			3,330.7			3,247.3
Operating lease assets	422.0			427.0			436.2			427.0
Intangible assets, net	3,446.9			3,527.4			3,383.8			3,527.4
Goodwill	5,752.0			5,757.8			5,751.0			5,757.8
Deferred tax asset	3,109.4			3,232.1			1,710.2			3,232.1
Investments and other assets	1,130.6			1,252.8			1,483.3			1,252.8
Total assets	$	26,119.2		$	27,234.3		$	25,511.8		$	27,234.3
LIABILITIES AND EQUITY
Current liabilities:
Current portion of notes payable	$	1,501.8		$	1,495.8		$	—		$	1,495.8
Taxes payable	310.0			71.4			576.7			71.4
Accounts payable	389.0			530.8			383.9			530.8
Accrued expenses and other	2,437.8			2,765.8			2,486.5			2,765.8
Total current liabilities	4,638.6			4,863.8			3,447.1			4,863.8
Notes payable	4,459.9			4,459.0			7,423.8			4,459.0
Deferred tax liability	2,722.8			2,810.8			1,461.5			2,810.8
Long-term operating lease liabilities	403.7			412.7			414.8			412.7
Other long-term liabilities	1,357.3			1,348.9			1,475.4			1,348.9
Total liabilities	13,582.3			13,895.2			14,222.6			13,895.2
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	0.1			—			—			—
Accumulated other comprehensive loss	(149.3		)	(135.2		)	(181.0		)	(135.2		)
Retained earnings	15,673.1			16,455.4			14,466.7			16,455.4
Treasury stock, at cost	(2,977.1		)	(2,977.1		)	(2,977.1		)	(2,977.1		)
Total Biogen Inc. shareholders’ equity	12,546.9			13,343.2			11,308.7			13,343.2
Noncontrolling interests	(10.0		)	(4.1		)	(19.5		)	(4.1		)
Total equity	12,536.9			13,339.1			11,289.2			13,339.1
Total liabilities and equity	$	26,119.2		$	27,234.3		$	25,511.8		$	27,234.3


	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			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					Shares				Retained earnings			Amount					Shares	Total Biogen Inc. shareholders’ equity			Noncontrolling interests			Amount					Shares		Amount				Shares	Additional paid-in capital			Amount													Total Biogen Inc. shareholders’ equity			Noncontrolling interests			Total equity
Balance, December 31, 2019	—	$	—	198.0		$	0.1	Additional paid-in capital			$	Accumulated other comprehensive loss	—		$	(135.2	)		$	16,455.4		(23.8	)	$	(2,977.1	)	$	13,343.2			Total equity		$	(4.1	)	$	13,339.1
Balance, March 31, 2020																																		—		$	—	191.1		$	0.1	$	0.1			Accumulated other comprehensive loss		$	(149.3	Retained earnings		)	$	15,673.1		(23.8	)	$	(2,977.1	)	$	12,546.9		$	(10.0	)	$	12,536.9
Net income	—	—		—		—		—				—			1,399.1				—		—			1,399.1			(6.5		)		1,392.6			—		—		—		—		—				—				1,542.1			—		—			1,542.1			64.4			1,606.5
Other comprehensive income (loss), net of tax	—	—		—		—		—				(14.1		)	—				—		—			(14.1		)	0.6				(13.5		)	—		—		—		—		—				(31.7		)		—			—		—			(31.7		)	1.1			(30.6		)
Repurchase of common stock pursuant to the March 2019 Share Repurchase Program, at cost	—	—		—		—		—				—			—				(4.1	)	(1,279.1		)	(1,279.1		)	—				(1,279.1		)
Retirement of common stock pursuant to the March 2019 Share Repurchase Program, at cost	—	—		(4.1	)	—		(71.0		)		—			(1,208.1		)		4.1		1,279.1			—			—				—
Distribution to noncontrolling interest																																		—		—		—		—		—				—				—			—		—			—			(75.0		)	(75.0		)
Repurchase of common stock pursuant to the December 2019 Share Repurchase Program, at cost	—	—		—		—		—				—			—				(3.2	)	(941.1		)	(941.1		)	—				(941.1		)	—		—		—		—		—				—				—			(9.0	)	(2,808.9		)	(2,808.9		)	—			(2,808.9		)
Retirement of common stock pursuant to the December 2019 Share Repurchase Program, at cost	—	—		(3.2	)	—		(15.6		)		—			(925.5		)		3.2		941.1			—			—				—			—		—		(9.0	)	—		(60.7		)		—				(2,748.2		)	9.0		2,808.9			—			—			—
Issuance of common stock under stock option and stock purchase plans	—	—		0.1		—		18.1				—			—				—		—			18.1			—				18.1			—		—		—		—		11.1				—				—			—		—			11.1			—			11.1
Issuance of common stock under stock award plan	—	—		0.3		—		—				—			(47.8		)		—		—			(47.8		)	—				(47.8		)	—		—		—		—		—				—				(0.3		)	—		—			(0.3		)	—			(0.3		)
Compensation related to share-based payments	—	—		—		—		69.2				—			—				—		—			69.2			—				69.2			—		—		—		—		49.5				—				—			—		—			49.5			—			49.5
Other	—	—		—		—		(0.6		)		—			—				—		—			(0.6		)	—				(0.6		)	—		—		—		—		—				—				—			—		—			—			—			—
Balance, March 31, 2020	—	$	—	191.1		$	0.1	$	0.1			$	(149.3	)	$	15,673.1			(23.8	)	$	(2,977.1	)	$	12,546.9		$	(10.0	)		$	12,536.9
Balance, June 30, 2020																																		—		$	—	182.1		$	0.1	$	—			$	(181.0	)		$	14,466.7		(23.8	)	$	(2,977.1	)	$	11,308.7		$	(19.5	)	$	11,289.2


•	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	117.5
Deferred tax liability	(81.9		)
Other, net	1.3
Total purchase price	$	852.2


(In millions)	Discounts			Contractual Adjustments			Returns			Total			Discounts			Contractual Adjustments			Returns			Total
Balance, as of December 31, 2019	$	131.1		$	1,027.3		$	40.5		$	1,198.9		$	131.1		$	1,027.3		$	40.5		$	1,198.9
Current provisions relating to sales in current year	200.7			827.9			4.7			1,033.3			387.5			1,624.2			9.9			2,021.6
Adjustments relating to prior years	(0.5		)	(15.9		)	(0.5		)	(16.9		)	(1.3		)	(25.7		)	0.7			(26.3		)
Payments/credits relating to sales in current year	(73.4		)	(310.3		)	—			(383.7		)	(251.4		)	(1,018.7		)	—			(1,270.1		)
Payments/credits relating to sales in prior years	(112.2		)	(432.8		)	(4.8		)	(549.8		)	(126.5		)	(612.9		)	(10.0		)	(749.4		)
Balance, as of March 31, 2020	$	145.7		$	1,096.2		$	39.9		$	1,281.8
Balance, as of June 30, 2020													$	139.4		$	994.2		$	41.1		$	1,174.7


(In millions)	As of March 31, 2020		As of December 31, 2019		As of June 30, 2020		As of December 31, 2019
Reduction of accounts receivable, net	$	235.4	$	197.8	$	223.4	$	197.8
Component of accrued expenses and other	1,046.4		1,001.1		951.3		1,001.1
Total revenue-related reserves	$	1,281.8	$	1,198.9	$	1,174.7	$	1,198.9


		As of March 31, 2020							As of December 31, 2019								As of June 30, 2020							As of December 31, 2019
(In millions)	Estimated Life	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net		Estimated Life	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Completed technology	4-28 years	$	7,379.3	$	(4,952.9	)	$	2,426.4	$	7,379.3	$	(4,881.4	)	$	2,497.9	4-28 years	$	7,379.3	$	(5,014.4	)	$	2,364.9	$	7,379.3	$	(4,881.4	)	$	2,497.9
In-process research and development	Indefinite until commercialization	956.5		—			956.5		965.5		—			965.5		Indefinite until commercialization	954.9		—			954.9		965.5		—			965.5
Trademarks and trade names	Indefinite	64.0		—			64.0		64.0		—			64.0		Indefinite	64.0		—			64.0		64.0		—			64.0
Total intangible assets		$	8,399.8	$	(4,952.9	)	$	3,446.9	$	8,408.8	$	(4,881.4	)	$	3,527.4		$	8,398.2	$	(5,014.4	)	$	3,383.8	$	8,408.8	$	(4,881.4	)	$	3,527.4


2.	Acquisitions


3.	Divestitures



	For the Three Months Ended June 30,
(In millions)	2020						2019
	United States		Rest of World		Total		United States		Rest of World		Total
Multiple Sclerosis (MS):
Fumarate*	$	921.7	$	268.6	$	1,190.3	$	869.8	$	280.4	$	1,150.2
Interferon**	345.6		135.8		481.4		379.7		174.7		554.4
TYSABRI	244.1		187.9		432.0		264.3		211.0		475.3
FAMPYRA	—		23.0		23.0		—		24.1		24.1
Subtotal: MS product revenues	1,511.4		615.3		2,126.7		1,513.8		690.2		2,204.0

Spinal Muscular Atrophy:
SPINRAZA	210.3		284.3		494.6		230.6		257.6		488.2

Biosimilars:
BENEPALI	—		106.2		106.2		—		120.3		120.3
IMRALDI	—		44.8		44.8		—		47.3		47.3
FLIXABI	—		20.6		20.6		—		16.8		16.8
Subtotal: Biosimilar product revenues	—		171.6		171.6		—		184.4		184.4

Other:
FUMADERM	—		2.8		2.8		—		3.7		3.7
Total product revenues	$	1,721.7	$	1,074.0	$	2,795.7	$	1,744.4	$	1,135.9	$	2,880.3



	For the Six Months Ended June 30,
(In millions)	2020						2019
	United States		Rest of World		Total		United States		Rest of World		Total
Multiple Sclerosis (MS):
Fumarate*	$	1,699.2	$	591.9	$	2,291.1	$	1,587.5	$	561.5	$	2,149.0
Interferon**	638.2		309.2		947.4		707.0		348.3		1,055.3
TYSABRI	521.8		432.6		954.4		509.3		426.4		935.7
FAMPYRA	��		51.3		51.3		—		47.0		47.0
Subtotal: MS product revenues	2,859.2		1,385.0		4,244.2		2,803.8		1,383.2		4,187.0

Spinal Muscular Atrophy:
SPINRAZA	445.7		613.9		1,059.6		453.9		552.8		1,006.7

Biosimilars:
BENEPALI	—		239.7		239.7		—		244.3		244.3
IMRALDI	—		106.4		106.4		—		83.0		83.0
FLIXABI	—		44.3		44.3		—		31.5		31.5
Subtotal: Biosimilar product revenues	—		390.4		390.4		—		358.8		358.8

Other:
FUMADERM	—		6.1		6.1		—		7.8		7.8
Total product revenues	$	3,304.9	$	2,395.4	$	5,700.3	$	3,257.7	$	2,302.6	$	5,560.3


As of March 31, 2020 (In millions)	Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of June 30, 2020 (In millions)									Total		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,974.1	$	—	$	1,974.1	$	—	$	1,869.6	$	—	$	1,869.6	$	—
Marketable debt securities:
Corporate debt securities	1,353.5		—		1,353.5		—		1,790.2		—		1,790.2		—
Government securities	710.4		—		710.4		—		966.8		—		966.8		—
Mortgage and other asset backed securities	174.7		—		174.7		—		108.5		—		108.5		—
Marketable equity securities	276.1		276.1		—		—		527.0		344.3		182.7		—
Derivative contracts	107.3		—		107.3		—		59.9		—		59.9		—
Plan assets for deferred compensation	24.5		—		24.5		—		27.7		—		27.7		—
Total	$	4,620.6	$	276.1	$	4,344.5	$	—	$	5,349.7	$	344.3	$	5,005.4	$	—
Liabilities:
Derivative contracts	$	3.7	$	—	$	3.7	$	—	$	14.3	$	—	$	14.3	$	—
Contingent consideration obligations	341.5		—		—		341.5		351.6		—		—		351.6
Total	$	345.2	$	—	$	3.7	$	341.5	$	365.9	$	—	$	14.3	$	351.6



As of December 31, 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	$	2,541.1	$	—	$	2,541.1	$	—
Marketable debt securities:
Corporate debt securities	1,695.1		—		1,695.1		—
Government securities	1,013.9		—		1,013.9		—
Mortgage and other asset backed securities	261.3		—		261.3		—
Marketable equity securities	337.5		7.9		329.6		—
Derivative contracts	43.8		—		43.8		—
Plan assets for deferred compensation	27.7		—		27.7		—
Total	$	5,920.4	$	7.9	$	5,912.5	$	—
Liabilities:
Derivative contracts	$	8.3	$	—	$	8.3	$	—
Contingent consideration obligations	346.1		—		—		346.1
Total	$	354.4	$	—	$	8.3	$	346.1



	As of March 31, 2020
Liabilities	Fair Value (in millions)	Valuation Technique	Unobservable Input	Range	Weighted Average
Contingent consideration obligation	$341.5	Discounted cash flow	Discount rate	2.40% to 2.53%	2.44%
Contingent consideration obligation	$341.5	Discounted cash flow	Timing of achievement of development milestones	2020 to 2027	—


As of March 31, 2020 (In millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities
As of June 30, 2020 (In millions)										Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities:
Current	$	923.8	$	0.2	$	(2.2	)	$	921.8	$	1,282.5	$	1.5	$	(0.1	)	$	1,283.9
Non-current	442.7		0.6		(11.6		)	431.7		502.8		3.8		(0.3		)	506.3
Government securities
Government securities:
Current	343.2		3.4		—			346.6		657.7		0.5		—			658.2
Non-current	361.5		2.5		(0.2		)	363.8		307.9		0.8		(0.1		)	308.6
Mortgage and other asset backed securities
Mortgage and other asset backed securities:
Current	0.7		—		—			0.7		0.6		—		—			0.6
Non-current	175.1		1.0		(2.1		)	174.0		107.6		0.7		(0.4		)	107.9
Total marketable debt securities	$	2,247.0	$	7.7	$	(16.1	)	$	2,238.6	$	2,859.1	$	7.3	$	(0.9	)	$	2,865.5
Marketable equity securities, non-current	$	286.2	$	6.5	$	(16.6	)	$	276.1	$	428.0	$	114.6	$	(15.6	)	$	527.0


	Notional Amount				Notional Amount
(In millions)	As of March 31, 2020		As of December 31, 2019		As of June 30, 2020		As of December 31, 2019
Euro	$	2,116.4	$	1,892.4	$	2,477.3	$	1,892.4
British pound	186.1		—		125.1		—
Swiss franc	103.1		—		69.0		—
Japanese yen	79.5		—		53.9		—
Canadian dollar	74.5		—		48.1		—
Total foreign currency forward contracts	$	2,559.6	$	1,892.4	$	2,773.4	$	1,892.4


For the Three Months Ended March 31,
For the Three Months Ended June 30,															For the Three Months Ended June 30,
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)							Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions)						Net Gains/(Losses) Recognized in Operating Income (in millions)
Location		2020			2019			Location	2020			2019				2020		2019			Location	2020			2019
Revenues		$	27.0		$	14.8		Revenues	$	9.3		$	3.7			$	23.7	$	29.8		Revenues	$	(1.6	)	$	3.7
Operating expenses		$	(0.1	)	$	(0.5	)	Operating expenses	$	(0.9	)	$	(0.9	)		—		(0.7		)	Operating expenses	(0.2		)	(0.3		)



For the Six Months Ended June 30,
Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions)							Net Gains/(Losses) Recognized in Operating Income (in millions)
Location	2020			2019			Location	2020			2019
Revenues	$	50.7		$	44.6		Revenues	$	7.7		$	7.4
Operating expenses	(0.1		)	(1.2		)	Operating expenses	(1.1		)	(1.2		)



For the Six Months Ended June 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	2020		2019		Location	2020		2019		Location	2020		2019
Gains (losses) on net investment hedge	$	15.4	$	23.4	Gains (losses) on net investment hedge	$	3.2	$	6.7	Other income (expense)	$	1.7	$	4.4


(In millions)	Balance Sheet Location	As of March 31, 2020		As of December 31, 2019		Balance Sheet Location	As of June 30, 2020		As of December 31, 2019
Cash Flow Hedging Instruments:
Asset derivative instruments	Other current assets	$	72.3	$	33.8	Other current assets	$	32.2	$	33.8
	Investments and other assets	$	4.0	$	—	Investments and other assets	0.7		—
Liability derivative instruments	Accrued expenses and other	$	0.8	$	2.0	Accrued expenses and other	4.4		2.0
	Other long-term liabilities	$	—	$	1.7	Other long-term liabilities	9.0		1.7

Net Investment Hedging Instruments:
Asset derivative instruments	Other current assets	$	25.9	$	2.0	Other current assets	20.7		2.0

Fair Value Hedging Instruments:
Liability derivative instruments	Accrued expenses and other	$	—	$	2.3	Accrued expenses and other	—		2.3

Other Derivative Instruments:
Asset derivative instruments	Other current assets	$	5.1	$	8.0	Other current assets	6.4		8.0
Liability derivative instruments	Accrued expenses and other	$	2.9	$	2.4	Accrued expenses and other	0.8		2.4


(In millions)	Unrealized Gains (Losses) on Securities Available for Sale, Net of Tax			Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax			Gains (Losses) on Net Investment Hedge			Unfunded Status of Postretirement Benefit Plans, Net of Tax			Currency Translation Adjustments			Total			Unrealized Gains (Losses) on Securities Available for Sale, Net of Tax			Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax			Gains (Losses) on Net Investment Hedge			Unfunded Status of Postretirement Benefit Plans, Net of Tax			Currency Translation Adjustments			Total
Balance, December 31, 2019	$	4.2		$	7.8		$	25.1		$	(32.8	)	$	(139.5	)	$	(135.2	)	$	4.2		$	7.8		$	25.1		$	(32.8	)	$	(139.5	)	$	(135.2	)
Other comprehensive income (loss) before reclassifications	(20.8		)	60.7			23.9			0.8			(63.9		)	0.7			(9.0		)	33.2			18.6			0.9			(47.0		)	(3.3		)
Amounts reclassified from accumulated other comprehensive income (loss)	13.0			(26.9		)	(0.9		)	—			—			(14.8		)	9.9			(50.6		)	(1.8		)	—			—			(42.5		)
Net current period other comprehensive income (loss)	(7.8		)	33.8			23.0			0.8			(63.9		)	(14.1		)	0.9			(17.4		)	16.8			0.9			(47.0		)	(45.8		)
Balance, March 31, 2020	$	(3.6	)	$	41.6		$	48.1		$	(32.0	)	$	(203.4	)	$	(149.3	)
Balance, June 30, 2020																			$	5.1		$	(9.6	)	$	41.9		$	(31.9	)	$	(186.5	)	$	(181.0	)


(In millions)	Income Statement Location	Amounts Reclassified from Accumulated Other Comprehensive Income						Income Statement Location	Amounts Reclassified from Accumulated Other Comprehensive Income
		For the Three Months Ended March 31,							For the Three Months Ended June 30,						For the Six Months Ended June 30,
		2020			2019				2020			2019			2020			2019
Gains (losses) on securities available for sale	Other income (expense)	$	(16.4	)	$	0.3		Other income (expense)	$	3.9		$	0.7		$	(12.5	)	$	1.0
	Income tax benefit (expense)	3.4			(0.1		)	Income tax benefit (expense)	(0.8		)	(0.1		)	2.6			(0.2		)

Gains (losses) on cash flow hedges	Revenues	27.0			14.8			Revenues	23.7			29.8			50.7			44.6
	Operating expenses	(0.1		)	(0.5		)	Operating expenses	—			(0.7		)	(0.1		)	(1.2		)
	Other income (expense)	0.1			0.1			Other income (expense)	0.1			—			0.2			0.1
	Income tax benefit (expense)	(0.1		)	(0.1		)	Income tax benefit (expense)	(0.1		)	(0.1		)	(0.2		)	(0.2		)

Gains (losses) on net investment hedge	Other income (expense)	0.9			2.2			Other income (expense)	0.9			2.2			1.8			4.4

Total reclassifications, net of tax		$	14.8		$	16.7			$	27.7		$	31.8		$	42.5		$	48.5



(In millions)	For the Three Months Ended March 31, 2020
Total development expense incurred by the collaboration related to the advancement of BAN2401 and elenbecestat	$	43.5
Biogen's share of BAN2401 and elenbecestat development expense reflected in research and development expense in our condensed consolidated statements of income	$	21.8
Total sales and marketing expense incurred by the collaboration	$	4.9
Biogen's share of BAN2401 sales and marketing expense reflected in selling, general and administrative expense in our condensed consolidated statements of income	$	2.4


•	Total revenues were $~~3,534.3~~3,681.6 million for the ~~first~~second quarter of 2020, representing an increase of ~~1.3%~~1.8% over $~~3,489.8~~3,616.7 million in the same period in 2019.


•	Product revenues, net totaled $~~2,904.6~~2,795.7 million for the second quarter of 2020, representing a decrease of 2.9% over $2,880.3 million in the same period in 2019. This decrease was primarily due to a 3.5% decrease in MS product revenues and a 6.9% decrease in our biosimilar products, partially offset by a 1.3% increase in revenues from SPINRAZA.


◦	We believe that, due to the COVID-19 pandemic, there was an acceleration in sales in the first quarter of 2020, primarily in the E.U., that increased revenues by approximately $100.0 million. During the second quarter of


•	Other revenues totaled $407.6 million for the second quarter of 2020, representing an increase from $160.0 million in the same period in 2019. This increase reflects $329.4 millionrelated to the delivery of the license for certain of our manufacturing-related intellectual property to a contract manufacturing customer.


•◦	~~Revenues from anti-CD20 therapeutic programs totaled~~The increase in research and development expense was primarily due to $~~520.4~~208.0 million ~~for~~in charges recognized upon the closing of our collaboration with Sangamo Therapeutics, Inc. (Sangamo) in the ~~first~~second quarter of 2020~~, remaining flat compared to~~ ~~$517.4 million~~ ~~in the same period in~~ ~~2019~~.


•	~~Other revenues totaled~~ ~~$109.3 million~~ ~~for the~~ ~~first~~ ~~quarter of~~ ~~2020, representing a decrease of~~ ~~62.6%~~ ~~from~~ ~~$292.4 million~~ ~~in the same period in~~ ~~2019. This decrease was primarily due to the sale of approximately~~ ~~$200 million~~ ~~of hemophilia inventory to Bioverativ Inc. (Bioverativ) in the first quarter of~~ ~~2019~~.


•	~~Net income attributable to Biogen Inc. was favorably impacted by a decrease in our effective tax rate to~~ ~~17.2%~~ ~~for the~~ ~~first~~ ~~quarter of~~ ~~2020, from~~ ~~22.7%~~ ~~for the same~~


•	Cash, cash equivalents and marketable securities totaled approximately $~~4.8~~5.3 billion and $5.9 billion as of ~~March 31,~~June 30, 2020 and December 31, 2019, respectively.

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Common Stock, $0.0005 par value

Nasdaq Global Select Market