Biogen(BIIB) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION This section presents Biogen Inc.'s interim financial information, including statements, notes, and management's discussion and analysis Item 1. Financial Statements (unaudited) This section presents Biogen Inc.'s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, and 2024, including statements of income, comprehensive income, balance sheets, cash flow, and equity Condensed Consolidated Statements of Income This section provides Biogen Inc.'s unaudited condensed consolidated statements of income for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Income (Millions) | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | | :----- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Total Revenue | $2,645.5 | $2,464.9 | $5,076.5 | $4,755.4 | | Total Cost and Expense | $1,901.5 | $1,766.2 | $4,021.3 | $3,591.9 | | Income Before Income Tax | $744.0 | $698.7 | $1,055.2 | $1,163.5 | | Net Income Attributable to Biogen Inc. | $634.8 | $583.6 | $875.3 | $977.0 | | Diluted EPS | $4.33 | $4.00 | $5.97 | $6.70 | Condensed Consolidated Statements of Comprehensive Income This section presents Biogen Inc.'s unaudited condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Comprehensive Income (Millions) | Metric | 3 Months Ended June 30, 2025 (Millions) | 3 Months Ended June 30, 2024 (Millions) | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | | :----- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Net Income Attributable to Biogen Inc. | $634.8 | $583.6 | $875.3 | $977.0 | | Total Other Comprehensive Income (Loss), Net of Tax | $(63.6) | $14.5 | $(101.9) | $7.7 | | Comprehensive Income (Loss) Attributable to Biogen Inc. | $571.2 | $598.1 | $773.4 | $984.7 | Condensed Consolidated Balance Sheets This section details Biogen Inc.'s unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (Millions) | Metric | As of June 30, 2025 (Millions) | As of December 31, 2024 (Millions) | | :----- | :----------------------------- | :--------------------------------- | | Total Current Assets | $7,967.7 | $7,456.8 | | Total Assets | $28,330.2 | $28,049.3 | | Total Current Liabilities | $3,183.7 | $5,528.8 | | Total Liabilities | $10,696.2 | $11,333.3 | | Total Equity | $17,634.0 | $16,716.0 | Condensed Consolidated Statements of Cash Flow This section outlines Biogen Inc.'s unaudited condensed consolidated statements of cash flow for the six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flow (Millions) | Metric | 6 Months Ended June 30, 2025 (Millions) | 6 Months Ended June 30, 2024 (Millions) | | :----- | :------------------------------------- | :------------------------------------- | | Net Cash Flow Provided by (Used in) Operating Activities | $420.2 | $1,179.0 | | Net Cash Flow Provided by (Used in) Investing Activities | $(104.3) | $400.5 | | Net Cash Flow Provided by (Used in) Financing Activities | $(34.7) | $(684.8) | | Net Increase (Decrease) in Cash and Cash Equivalents | $281.2 | $894.7 | | Cash and Cash Equivalents, End of Period | $2,758.8 | $1,908.9 | Condensed Consolidated Statements of Equity This section presents Biogen Inc.'s unaudited condensed consolidated statements of equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Statements of Equity (Millions) | Metric | As of June 30, 2025 (Millions) | As of December 31, 2024 (Millions) | | :----- | :----------------------------- | :--------------------------------- | | Total Equity | $17,634.0 | $16,716.0 | | Retained Earnings | $20,135.1 | $19,259.8 | | Accumulated Other Comprehensive Income (Loss) | $(238.1) | $(136.2) | Notes to Condensed Consolidated Financial Statements This section provides detailed notes to Biogen Inc.'s unaudited condensed consolidated financial statements, explaining significant accounting policies, acquisitions, dispositions, and other financial details Note 1: Summary of Significant Accounting Policies This note outlines Biogen Inc.'s significant accounting policies and recent accounting pronouncements, providing context for the financial statements - Biogen is a global biopharmaceutical company focused on discovering, developing, and delivering innovative therapies for serious and complex diseases, with a broad portfolio in MS, SMA, Alzheimer's, and ALS, and a pipeline in neurology, specialized immunology, and rare diseases[38] - The company's marketed products include TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI (MS); SPINRAZA (SMA); SKYCLARYS (FA); and QALSODY (ALS)[39] - Biogen also has collaborations for LEQEMBI (Alzheimer's) with Eisai and ZURZUVAE (PPD) with Sage, and commercializes biosimilars like BENEPALI, IMRALDI, FLIXABI, and BYOOVIZ in international markets[40][41] - Effective Q1 2025, 'Acquired in-process research and development, upfront and milestone expense' is presented as a separate line item in the consolidated statements of income, reclassifying costs previously in R&D[45][48] New Accounting Pronouncements | Standard | Description | Effective Date | Effects on the financial statements | | :------- | :---------- | :------------- | :---------------------------------- | | ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures | Establishes incremental disaggregation of income tax disclosures pertaining to the effective tax rate reconciliation and income taxes paid | Annual reporting for fiscal years beginning after December 15, 2024 | Evaluating potential impact; expect to apply prospectively | | ASU No. 2024-03, Income Statement (Subtopic 220-40): Reporting Comprehensive Income - Expense Disaggregation Disclosures | Requires disclosure of specified information about certain costs and expense (inventory purchases, employee compensation, depreciation, intangible asset amortization) in notes | Annual reporting for fiscal years beginning after December 15, 2026 | Evaluating potential impact | Note 2: Acquisitions This note details Biogen Inc.'s acquisition activities, including the purchase of Human Immunology Biosciences (HI-Bio) and related financial impacts - On July 2, 2024, Biogen acquired Human Immunology Biosciences (HI-Bio) for approximately $1.15 billion at closing, with potential additional contingent development and regulatory milestone payments up to $650.0 million[56][57] - HI-Bio's lead asset, felzartamab, an anti-CD38 antibody, is being evaluated for AMR, PMN, and IgAN, and has received Breakthrough Therapy Designation and ODD from the FDA for PMN and AMR, and ODD in the E.U. for IgAN and solid organ transplantation[56] HI-Bio Acquisition Consideration and Allocation (Millions) | Metric | As of July 2, 2024 (Millions) | | :----- | :---------------------------- | | Cash consideration paid to HI-Bio shareholders | $1,137.3 | | Contingent consideration | $485.1 | | Total consideration | $1,622.4 | | IPR&D - felzartamab (IgAN) | $920.0 | | IPR&D - felzartamab (AMR) | $450.0 | | IPR&D - felzartamab (PMN) | $265.0 | | Goodwill | $261.0 | - During Q2 2025, the first milestone for felzartamab in AMR (fourth patient dosed in Phase 3) was achieved, resulting in a $150.0 million payment to former HI-Bio shareholders, substantially paid in July 2025[60] Note 3: Dispositions This note describes Biogen Inc.'s disposition activities, including the sale of equity interests and a Priority Review Voucher, and their financial effects - In April 2024, Biogen received the second deferred payment of $437.5 million from Samsung BioLogics for the sale of its 49.9% equity interest in Samsung Bioepis, recognizing gains of $1.4 million (Q2 2024) and $7.5 million (YTD 2024) from fair value changes[70][71] - In April 2024, Biogen sold its rare pediatric disease Priority Review Voucher (PRV) for $103.0 million, recognizing a net gain of $88.6 million after a payment to Ionis[73] - In March 2025, Biogen sold its U.S. regulatory and commercial rights for TOFIDENCE (tocilizumab biosimilar) to Organon, receiving approximately $51.0 million in July 2025 and recognizing a de minimis loss[74] Note 4: Restructuring This note provides details on Biogen Inc.'s restructuring programs, including the Fit for Growth initiative and Reata integration charges - The 2023 Fit for Growth program aims to generate approximately $1.0 billion in gross operating expense savings by end of 2025, with estimated net headcount reductions of 1,400 employees and total restructuring charges of $300.0 million to $310.0 million[75] 2023 Fit for Growth Program Charges (Millions) | (In millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Total Charges | $0.9 | $10.5 | $37.4 | $26.1 | - Reata integration incurred approximately $35.0 million in severance and employment costs, substantially in 2023, to realize operating synergies[78] Reata Integration Charges (Millions) | (In millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Total Charges | $5.8 | $5.1 | $9.7 | $11.8 | Restructuring Reserve for Workforce Reductions (Millions) | (In millions) | As of June 30, 2025 | As of December 31, 2024 | | :------------ | :------------------ | :---------------------- | | Restructuring reserve | $29.2 | $31.9 | Note 5: Revenue This note provides a detailed breakdown of Biogen Inc.'s revenue streams, including product revenue, collaboration revenue, and related reserves Total Product Revenue, Net (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Multiple Sclerosis | $1,107.2 | $1,149.8 | $2,060.2 | $2,225.7 | | Rare Disease | $543.0 | $534.1 | $1,106.3 | $958.0 | | Biosimilars | $181.7 | $198.1 | $362.5 | $395.0 | | Other | $46.8 | $17.6 | $76.2 | $32.8 | | Total Product Revenue, Net | $1,878.7 | $1,899.6 | $3,605.2 | $3,611.5 | Revenue from Anti-CD20 Therapeutic Programs (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Royalty revenue on sales of OCREVUS | $353.8 | $336.3 | $642.6 | $639.0 | | Biogen's share of pre-tax profits (RITUXAN, GAZYVA, LUNSUMIO) | $107.7 | $103.4 | $191.4 | $190.5 | | Other revenue | $5.8 | $4.8 | $11.5 | $9.0 | | Total | $467.3 | $444.5 | $845.5 | $838.5 | Alzheimer's Collaboration Revenue (LEQEMBI) (Millions) | Period | 2025 | 2024 | | :----- | :--- | :--- | | 3 Months Ended June 30, | $54.9 | $11.8 | | 6 Months Ended June 30, | $87.9 | $14.6 | Contract Manufacturing, Royalty and Other Revenue (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Contract manufacturing revenue | $225.0 | $100.0 | $507.3 | $252.2 | | Royalty and other revenue | $19.6 | $9.0 | $30.6 | $38.6 | | Total | $244.6 | $109.0 | $537.9 | $290.8 | Total Revenue-Related Reserves (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | | :------- | :------------------ | :---------------------- | | Reduction of accounts receivable | $273.6 | $154.1 | | Component of accrued expense and other | $997.4 | $937.5 | | Total Revenue-Related Reserves | $1,271.0 | $1,091.6 | Note 6: Inventory This note details the components of Biogen Inc.'s inventory and related accounting adjustments as of June 30, 2025, and December 31, 2024 Inventory Components (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | | :------- | :------------------ | :---------------------- | | Raw materials | $305.0 | $317.8 | | Work in process | $1,641.9 | $1,882.8 | | Finished goods | $478.0 | $353.8 | | Total Inventory | $2,424.9 | $2,554.4 | - The fair value step-up adjustment related to acquired SKYCLARYS inventory from the Reata acquisition (September 2023) is being amortized to cost of sales, with $52.5 million (Q2 2025) and $103.9 million (YTD 2025) amortized[101] Note 7: Intangible Assets and Goodwill This note provides a breakdown of Biogen Inc.'s intangible assets and goodwill, including amortization, impairment, and changes over time Intangible Assets, Net (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | | :------- | :------------------ | :---------------------- | | Completed technology | $7,664.1 | $7,884.3 | | In-process research and development (IPR&D) | $1,639.4 | $1,642.9 | | Priority review voucher | $100.0 | $100.0 | | Trademarks and trade names | $64.0 | $64.0 | | Total Intangible Assets | $9,467.5 | $9,691.2 | - Amortization and impairment of acquired intangible assets increased to $130.9 million (Q2 2025) and $242.7 million (YTD 2025), primarily due to SKYCLARYS and TYSABRI amortization, and a $3.5 million impairment charge related to an HI-Bio compound in Q2 2025[104][105][106] Estimated Future Amortization of Finite-Lived Intangible Assets (Millions) | Year | Amount | | :--- | :----- | | 2025 (remaining six months) | $240.0 | | 2026 | $565.0 | | 2027 | $600.0 | | 2028 | $630.0 | | 2029 | $665.0 | | 2030 | $700.0 | Goodwill Roll Forward (Millions) | Metric | As of June 30, 2025 | | :----- | :------------------ | | Goodwill, December 31, 2024 | $6,478.9 | | Goodwill resulting from HI-Bio acquisition | $4.5 | | Other | $9.7 | | Goodwill, June 30, 2025 | $6,493.1 | Note 8: Fair Value Measurements This note details Biogen Inc.'s fair value measurements for assets and liabilities, including recurring measurements and debt instruments Fair Value Measurements on a Recurring Basis (Assets) (Millions) | Category | As of June 30, 2025 (Total) | As of December 31, 2024 (Total) | | :------- | :-------------------------- | :------------------------------ | | Cash equivalents | $2,234.9 | $1,664.9 | | Marketable equity securities | $157.0 | $179.7 | | Derivative contracts (current) | $31.7 | $62.5 | | Convertible note (non-current) | $30.0 | — | | Plan assets for deferred compensation (non-current) | $50.1 | $42.8 | | Total Assets | $2,503.7 | $1,949.9 | Fair Value Measurements on a Recurring Basis (Liabilities) (Millions) | Category | As of June 30, 2025 (Total) | As of December 31, 2024 (Total) | | :------- | :-------------------------- | :------------------------------ | | Derivative contracts (current) | $123.7 | $11.7 | | Contingent consideration obligations (current) | $297.2 | $291.2 | | Derivative contracts (non-current) | $26.8 | — | | Contingent consideration obligations (non-current) | $237.7 | $221.6 | | Total Liabilities | $685.4 | $524.5 | - The fair value of contingent consideration obligations increased to $534.9 million as of June 30, 2025, primarily due to the passage of time[125] - A $150.0 million milestone payment for felzartamab (AMR) was achieved in Q2 2025 and substantially paid in July 2025[127] Fair and Carrying Values of Debt Instruments (Millions) | Debt Instrument | As of June 30, 2025 (Fair Value) | As of June 30, 2025 (Carrying Value) | As of December 31, 2024 (Fair Value) | As of December 31, 2024 (Carrying Value) | | :-------------- | :------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Current portion of notes payable | — | — | $1,741.0 | $1,748.6 | | Non-current portion of notes payable | $5,552.1 | $6,283.7 | $3,696.2 | $4,547.2 | | Total Notes Payable | $5,552.1 | $6,283.7 | $5,437.2 | $6,295.8 | Note 9: Financial Instruments This note provides information on Biogen Inc.'s financial instruments, including cash, cash equivalents, and marketable equity securities Cash and Cash Equivalents (Money Market Funds) (Millions) | Period | As of June 30, 2025 | As of December 31, 2024 | | :----- | :------------------ | :---------------------- | | Money market funds | $2,234.9 | $1,664.9 | Marketable Equity Securities (Non-Current) (Millions) | Period | As of June 30, 2025 (Fair Value) | As of December 31, 2024 (Fair Value) | | :----- | :------------------------------- | :----------------------------------- | | Marketable equity securities | $157.0 | $179.7 | - The strategic investment portfolio decreased to $224.0 million as of June 30, 2025, from $226.7 million as of December 31, 2024, primarily due to a decrease in the fair value of Denali common stock, partially offset by an increase in Sage common stock[135][136] Note 10: Derivative Instruments This note describes Biogen Inc.'s use of derivative instruments to manage foreign currency exchange rate risk and their financial impact - Biogen uses foreign currency forward contracts and options to mitigate foreign currency exchange rate fluctuations on international revenue and operating expense, with durations of 1 to 24 months[137][138] Notional Amount of Foreign Currency Forward Contracts and Options (Millions) | Currency | As of June 30, 2025 | As of December 31, 2024 | | :------- | :------------------ | :---------------------- | | Euro | $2,024.6 | $1,062.6 | | British pound | $68.7 | $133.8 | | Swiss franc | $128.5 | — | | Canadian dollar | $20.4 | $38.6 | | Total | $2,242.2 | $1,235.0 | - Net unrealized losses from cash flow hedges totaled $135.2 million as of June 30, 2025, expected to settle over the next 24 months[140] - Other foreign currency forward contracts, not designated as hedges, had an aggregate notional amount of $1,045.2 million (June 30, 2025) and generated net gains of $27.7 million (Q2 2025) and $35.4 million (YTD 2025)[143] Note 11: Property, Plant and Equipment This note details Biogen Inc.'s property, plant and equipment, including accumulated depreciation and depreciation expense - Accumulated depreciation on property, plant and equipment was $2,808.7 million as of June 30, 2025, up from $2,670.8 million as of December 31, 2024[148] - Depreciation expense for Q2 2025 was $66.9 million and for YTD 2025 was $138.3 million[148] Note 12: Leases This note outlines Biogen Inc.'s lease agreements, including a new lease for its global corporate headquarters in Cambridge, MA - In March 2025, Biogen entered a new lease agreement for approximately 580,000 square feet in Cambridge, MA, for its new global corporate headquarters, with an initial term of 15.5 years commencing May 31, 2028[149] - The new lease is part of a multi-year real estate consolidation plan to reduce the Massachusetts real estate footprint by approximately 40%, with estimated minimum lease payments of $1.5 billion over the initial term[149] Note 13: Indebtedness This note provides details on Biogen Inc.'s indebtedness, including the issuance of new senior notes and repayment of existing debt - In May 2025, Biogen issued $1.75 billion in senior unsecured notes (2025 Senior Notes) and used the net proceeds in June 2025 to redeem its 4.050% Senior Notes due September 15, 2025, prior to maturity[152][155] - The 2025 Senior Notes consist of $400.0 million at 5.050% due 2031, $650.0 million at 5.750% due 2035, and $700.0 million at 6.450% due 2055[159] - The $1.5 billion 2023 Term Loan, drawn for the Reata acquisition, was fully repaid by Q2 2024[156][157] Note 14: Equity This note details Biogen Inc.'s equity components, including share repurchase programs and changes in accumulated other comprehensive income - No share repurchases were made under the 2020 Share Repurchase Program during Q2 2025 or YTD 2025[158] - Approximately $2.1 billion remained available under the program as of June 30, 2025[158] Changes in Accumulated Other Comprehensive Income (Loss) (Millions) | Component | As of March 31, 2025 | Net Current Period OCI (Loss) | As of June 30, 2025 | | :-------- | :------------------- | :---------------------------- | :------------------ | | Unrealized Gains (Losses) on Cash Flow Hedges, Net of Tax | $(6.2) | $(105.8) | $(112.0) | | Unrealized Gains (Losses) on Pension Benefit Obligation, Net of Tax | $(16.2) | $0.6 | $(15.6) | | Currency Translation Adjustments, Net of Tax | $(152.1) | $41.6 | $(110.5) | | Total | $(174.5) | $(63.6) | $(238.1) | Note 15: Earnings per Share This note presents Biogen Inc.'s earnings per share calculations for basic and diluted shares for the interim periods Earnings Per Share Calculation (Millions, except per share amounts) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to Biogen Inc. | $634.8 | $583.6 | $875.3 | $977.0 | | Basic earnings per share | $4.33 | $4.01 | $5.98 | $6.72 | | Diluted earnings per share | $4.33 | $4.00 | $5.97 | $6.70 | | Weighted average basic shares | 146.5 | 145.6 | 146.3 | 145.4 | | Weighted average diluted shares | 146.7 | 145.9 | 146.7 | 145.9 | Note 16: Share-Based Payments This note details Biogen Inc.'s share-based compensation expense, categorized by research and development and selling, general and administrative Share-Based Compensation Expense (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $30.1 | $27.3 | $62.2 | $54.7 | | Selling, general and administrative | $48.0 | $45.6 | $100.0 | $89.6 | | Total Share-based compensation expense included in total cost and expense | $74.9 | $70.6 | $155.9 | $138.7 | Note 17: Income Taxes This note provides information on Biogen Inc.'s income tax provision, effective tax rate reconciliation, and the impact of new tax legislation - The OBBBA, signed into law on July 4, 2025, contains tax provisions with multiple effective dates (2025-2027) but is not expected to have a material impact on consolidated financial statements in 2025 based on initial assessment[168][169][170][171][172] Effective Tax Rate Reconciliation | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Statutory rate | 21.0% | 21.0% | 21.0% | 21.0% | | State taxes | 1.5% | 1.4% | 1.7% | 1.4% | | Taxes on foreign earnings | (7.7)% | (6.2)% | (8.4)% | (5.2)% | | Tax credits | (1.8)% | (1.6)% | (1.8)% | (2.0)% | | Purchased inventory valuation step-up and intangible assets | 2.1% | 1.6% | 2.3% | 1.5% | | GILTI | (1.9)% | (0.9)% | (1.0)% | (1.6)% | | Share-based compensation awards | 0.1% | — | 1.7% | 0.3% | | Other | 1.4% | 1.2% | 1.5% | 0.6% | | Effective Tax Rate | 14.7% | 16.5% | 17.0% | 16.0% | - The effective tax rate changes were driven by favorable deferred tax impacts from decreases in foreign withholding taxes and a foreign valuation allowance in 2025, partially offset by changes in territorial profitability mix[171] - The six-month period also reflects impacts from share-based compensation awards and a decrease in Pillar Two minimum tax liabilities[172] - Gross unrecognized tax benefits could decrease by up to $35.0 million in the next 12 months due to audit closures, settlements, and statute of limitations expirations[177] Note 18: Other Consolidated Financial Statement Detail This note provides additional details on Biogen Inc.'s other consolidated financial statement items, including other income/expense and accrued expenses Other (Income) Expense, Net (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Interest income | $(32.3) | $(20.1) | $(56.2) | $(37.5) | | Interest expense | $72.6 | $61.3 | $132.6 | $130.5 | | (Gains) losses on investments, net | $(5.3) | $30.7 | $30.3 | $61.3 | | Foreign exchange (gains) losses, net | $10.4 | $11.3 | $6.6 | $20.7 | | Other, net | $3.3 | $2.0 | $3.8 | $3.9 | | Total Other (Income) Expense, Net | $48.7 | $85.2 | $117.1 | $178.9 | - Net unrealized gains on equity securities for Q2 2025 were $5.3 million, primarily from Sage and Denali common stock[179] - For YTD 2025, net unrealized losses were $35.7 million, mainly from Denali common stock, partially offset by Sage[181] Accrued Expense and Other (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | | :------- | :------------------ | :---------------------- | | Revenue-related reserves for discounts and allowances | $997.4 | $937.5 | | Employee compensation and benefits | $260.9 | $375.8 | | Collaboration expense | $179.5 | $309.0 | | Royalties and licensing fees | $200.3 | $190.2 | | Current portion of contingent consideration obligations | $297.2 | $291.2 | | Derivative liabilities | $123.7 | $11.7 | | Other | $601.5 | $692.3 | | Total Accrued Expense and Other | $2,660.5 | $2,807.7 | Note 19: Collaborative and Other Relationships This note details Biogen Inc.'s collaborative and other relationships, including agreements for therapeutic programs and research arrangements - Biogen has collaborations with Genentech for anti-CD20 therapeutic programs (RITUXAN, GAZYVA, OCREVUS, LUNSUMIO, COLUMVI), with tiered royalties and profit-sharing arrangements[186][188][194][195] - The pre-tax profit share for RITUXAN and LUNSUMIO in the U.S. was 35.0% starting April 2023, following the achievement of the First Threshold Date in March 2023[196][197] - Collaboration with Eisai for LEQEMBI (Alzheimer's) involves equal sharing of costs, profits, and losses[204] - LEQEMBI received traditional FDA approval in July 2023 and is approved in the E.U., China, and Japan[205] - FDA approved monthly IV maintenance dosing in January 2025 and accepted BLA for subcutaneous autoinjector[205] - Collaboration with Sage for ZURZUVAE (PPD) involves equal responsibility and costs for U.S. development and profit/loss sharing[213] - Biogen recognized net profit-sharing expense of $17.8 million (Q2 2025) and $27.9 million (YTD 2025) for Sage's share[215] - In February 2025, Biogen entered a collaboration with Stoke Therapeutics to co-develop zorevunersen for Dravet syndrome, making an upfront payment of $165.0 million and sharing external clinical development costs (Biogen 30%)[221][222][223] - In February 2025, Biogen entered a funding agreement with Royalty Pharma for up to $250.0 million to co-fund the litifilimab program, recognizing $50.0 million (Q2 2025) and $100.0 million (YTD 2025) as R&D expense reductions[237] - Milestone payments to MorphoSys for felzartamab were accrued: $35.0 million (Q1 2025) for AMR and $30.0 million (Q2 2025) for IgAN, both for first patient dosed in Phase 3 trials[242][243] - In May 2025, Biogen initiated a strategic research arrangement with City Therapeutics for RNAi therapies, making a $16.0 million upfront payment and investing $30.0 million in a convertible note[244][245] Note 20: Investments in Variable Interest Entities This note describes Biogen Inc.'s investments in unconsolidated variable interest entities and the associated maximum exposure to loss - Biogen has investments in unconsolidated variable interest entities (VIEs), primarily certain biotechnology companies, with a carrying value of $49.3 million as of June 30, 2025[249] - Maximum exposure to loss is limited to the carrying value of these investments[249] Note 21: Litigation This note provides an overview of Biogen Inc.'s ongoing legal proceedings, including securities litigation, patent disputes, and government investigations - Biogen is involved in various legal proceedings, including securities litigation related to ADUHELM, LEQEMBI, TECFIDERA, and VUMERITY, and derivative actions concerning ADUHELM and other matters, all currently stayed[255][256] - IMRALDI patent litigation in France and Germany alleges infringement by a past formulation, with a German court ruling infringement and ordering an injunction in May 2025, which Biogen is appealing[259][260] - A trial concluded in May 2025 for a $49.9 million claim by former Convergence shareholders for alleged contract breaches[261] - Humana filed suit in February 2025 alleging breach of contract and fraud related to Biogen's patient assistance programs for MS patients[262] - Antitrust litigation was filed in August/September 2024 alleging violations related to contracts with pharmacy benefit managers for TECFIDERA and VUMERITY; the case was dismissed without prejudice in June 2025 with leave to amend[265] - Government investigations by the SEC and DOJ regarding ADUHELM, equity plans, and foreign business operations were closed in April and May 2025[266] - In June 2025, Biogen filed for arbitration against Eisai regarding the LEQEMBI commercialization plan for the European Territory, seeking an equitable allocation of activities[272] Note 22: Segment Information This note clarifies that Biogen Inc. operates as a single operating segment, with the CEO as the Chief Operating Decision Maker - Biogen operates as one operating segment, with the CEO acting as the Chief Operating Decision Maker (CODM), managing resources and evaluating performance on a total company basis[273][275] Total Revenue and Net Income Attributable to Biogen Inc. (Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenue | $2,645.5 | $2,464.9 | $5,076.5 | $4,755.4 | | Net Income Attributable to Biogen Inc. | $634.8 | $583.6 | $875.3 | $977.0 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Biogen's financial condition and results of operations for the three and six months ended June 30, 2025, compared to the prior year periods EXECUTIVE SUMMARY This section provides an executive overview of Biogen Inc.'s business, market environment, financial highlights, and recent strategic developments INTRODUCTION This section introduces Biogen Inc.'s core business, strategic focus, and key operational advancements, including manufacturing capabilities - Biogen is a global biopharmaceutical company focused on neurology, specialized immunology, and rare diseases, with a portfolio including MS, SMA, Alzheimer's, ALS, and FA treatments, and a pipeline advanced through internal R&D, collaborations, and acquisitions[281] - The Solothurn manufacturing facility is operational and approved for LEQEMBI, significantly increasing biologics production capacity to support future growth[284] - Long-term revenue growth depends on successful clinical development, regulatory approval, and launch of new products/indications, patent maintenance, and effective business development[285] BUSINESS ENVIRONMENT This section discusses the competitive landscape, regulatory challenges, and macroeconomic factors influencing Biogen Inc.'s operations and financial performance - The biopharmaceutical industry is intensely competitive, with increasing competition from new originator therapies, generics, biosimilars, and products approved under abbreviated regulatory pathways, leading to potential price and volume reductions[286][287] - Sales depend on adequate coverage, pricing, and reimbursement from government and private payors, which are uncertain and subject to increasing scrutiny and cost-containment measures globally, including the IRA's drug pricing provisions[288][289] - TECFIDERA revenue continues to decline due to generic competition in North America, Brazil, and Europe[293] - TYSABRI sales are adversely affected by biosimilar entry in international markets[294] - Geopolitical tensions (Russia-Ukraine, Middle East) and global supply chain disruptions pose risks to operations, sales, and costs, though revenue from these regions is currently less than 2% of total revenue[309][310] - The Inflation Reduction Act (IRA) is expected to have a modest net unfavorable impact of $50.0 million to $100.0 million on 2025 revenue, concentrated in SKYCLARYS and MS portfolio products, due to drug pricing controls and Medicare Part D redesign[312] - The OBBBA, signed July 4, 2025, introduces tax and Medicaid funding changes, but is not expected to materially impact 2025 consolidated financial statements based on initial assessment, though its full impact remains uncertain[315][316][317][318][319] FINANCIAL HIGHLIGHTS This section summarizes Biogen Inc.'s key financial performance metrics for the quarter, highlighting revenue, EPS, and cost drivers Financial Highlights (Q2 2025 vs. Q2 2024) | Metric | Change (Millions) | % Change | Primary Drivers | | :----- | :---------------- | :------- | :-------------- | | Total Revenue | +$180.6 | +7.3% | | | Diluted EPS | +$0.33 | +8.3% | | | Product Revenue, Net | -$20.9 | -1.1% | MS revenue decreased due to competition (TECFIDERA, TYSABRI); Rare disease revenue increased due to new product launches (SKYCLARYS, QALSODY) | | Total Cost and Expense | +$135.3 | +7.7% | Cost of sales increased due to higher contract manufacturing and SKYCLARYS amortization; R&D decreased due to cost reduction measures, offset by higher clinical trial spend (litifilimab, felzartamab) and Royalty Pharma funding; Acquired IPR&D, upfront and milestone expense increased due to City Therapeutics upfront payment and felzartamab milestone; SG&A increased due to LEQEMBI and SKYCLARYS launch support | FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES This section provides an overview of Biogen Inc.'s financial position, liquidity, and capital resources, including cash flows and debt management - Cash and cash equivalents increased to $2.8 billion as of June 30, 2025, from $2.4 billion as of December 31, 2024[331] - Net cash flow from operations for YTD 2025 was $420.2 million, a decrease from $1,179.0 million in YTD 2024, primarily due to higher worldwide tax payments in 2025[331] - In May 2025, Biogen issued $1.75 billion in 2025 Senior Notes and used the proceeds in June 2025 to redeem its 4.050% Senior Notes due September 15, 2025[331] RECENT DEVELOPMENTS This section outlines Biogen Inc.'s recent corporate, collaborative, and product development milestones and strategic initiatives CORPORATE MATTERS This section details recent corporate actions, including debt issuance and real estate consolidation plans - Biogen issued $1.75 billion in 2025 Senior Notes in May 2025 and used the proceeds to redeem its 4.050% Senior Notes due September 15, 2025, in June 2025[332] - A new lease agreement for a global corporate headquarters in Cambridge, MA, was signed in March 2025, part of a plan to reduce the Massachusetts real estate footprint by 40%[333] COLLABORATIVE AND OTHER RELATIONSHIPS This section highlights new and ongoing collaborative agreements for drug development and funding initiatives - In May 2025, Biogen entered a strategic research arrangement with City Therapeutics to develop RNAi therapies, including a $16.0 million upfront payment and a $30.0 million convertible note investment[335][336] - In February 2025, Biogen collaborated with Stoke Therapeutics to co-develop zorevunersen for Dravet syndrome, making a $165.0 million upfront payment[338][339] - A funding agreement with Royalty Pharma in February 2025 provides up to $250.0 million to co-fund the litifilimab program, with $100.0 million received by June 30, 2025[341] DEVELOPMENTS IN KEY COLLABORATIVE RELATIONSHIPS This section provides updates on significant collaborative programs, including regulatory approvals and commercialization strategies - LEQEMBI received FDA approval for monthly IV maintenance dosing in January 2025 and the BLA for a subcutaneous autoinjector was accepted for review with a PDUFA date of August 31, 2025[345] - LEQEMBI was approved in the E.U. in April 2025, but Australia declined approval in March 2025[345] - In June 2025, Biogen filed for arbitration with the International Court of Arbitration regarding the LEQEMBI commercialization plan in Europe[345] - The CHMP of the EMA adopted a positive opinion recommending marketing authorization for ZURZUVAE for PPD in July 2025[344] OTHER KEY DEVELOPMENTS This section summarizes other important product development and regulatory milestones across Biogen Inc.'s pipeline - Phase 3 studies for felzartamab in IgAN (PREVAIL) and PMN (PROMINENT) initiated dosing in June 2025, triggering a $30.0 million milestone payment to MorphoSys for IgAN[346] - Phase 3 TRANSCEND study for felzartamab in late AMR initiated dosing in March 2025, leading to a $35.0 million milestone payment to MorphoSys in April 2025[347] - FDA accepted supplemental NDA and EMA validated application for a higher dose regimen of nusinersen (SPINRAZA) for SMA in January 2025[348] - Positive topline results from Phase 1b study of salanersen for SMA were announced in June 2025, showing slowing neurodegeneration and motor function improvements in gene therapy-treated children[349] - Phase 3 BRAVE study for SKYCLARYS in children with FA initiated dosing in June 2025[350] - SKYCLARYS was approved in the U.K., Brazil (April 2025), and Canada (March 2025)[350] - Health Canada issued marketing authorization with conditions for QALSODY for ALS in adults with SOD1 gene mutation in March 2025[351] - FDA granted Fast Track designation to BIIB080, an investigational ASO therapy for tau in Alzheimer's disease, in April 2025[352] DISCONTINUED PROGRAMS AND STUDIES This section reports on programs and studies that have been discontinued or divested, and their financial implications - In March 2025, Biogen completed the sale of U.S. regulatory and commercial rights for TOFIDENCE (tocilizumab biosimilar) to Organon, receiving $51.0 million in July 2025 and recognizing a de minimis loss[353] RESULTS OF OPERATIONS This section provides a detailed analysis of Biogen Inc.'s revenue and cost components, explaining changes in financial performance REVENUE This section analyzes Biogen Inc.'s total revenue, breaking down performance across product categories and collaboration agreements Total Revenue (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Product revenue, net | $1,878.7 | $1,899.6 | (1.1)% | $3,605.2 | $3,611.5 | (0.2)% | | Revenue from anti-CD20 therapeutic programs | $467.3 | $444.5 | 5.1% | $845.5 | $838.5 | 0.8% | | Alzheimer's collaboration revenue | $54.9 | $11.8 | 365.3% | $87.9 | $14.6 | 502.1% | | Contract manufacturing, royalty and other revenue | $244.6 | $109.0 | 124.4% | $537.9 | $290.8 | 85.0% | | Total Revenue | $2,645.5 | $2,464.9 | 7.3% | $5,076.5 | $4,755.4 | 6.8% | PRODUCT REVENUE This section details Biogen Inc.'s net product revenue, categorized by therapeutic area, highlighting key drivers and trends Product Revenue by Category (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Multiple Sclerosis | $1,107.2 | $1,149.8 | (3.7)% | $2,060.2 | $2,225.7 | (7.4)% | | Rare Disease | $543.0 | $534.1 | 1.7% | $1,106.3 | $958.0 | 15.5% | | Biosimilars | $181.7 | $198.1 | (8.3)% | $362.5 | $395.0 | (8.2)% | | Other | $46.8 | $17.6 | 165.9% | $76.2 | $32.8 | 132.3% | | Total Product Revenue, Net | $1,878.7 | $1,899.6 | (1.1)% | $3,605.2 | $3,611.5 | (0.2)% | MULTIPLE SCLEROSIS This section analyzes revenue trends for Biogen Inc.'s Multiple Sclerosis product portfolio, considering competitive pressures and market dynamics - MS revenue is expected to continue declining in 2025 due to increasing competition for many products[359] Multiple Sclerosis Product Revenue (Millions) | Product | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :------ | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | TECFIDERA | $193.6 | $252.2 | (23.2)% | $399.7 | $506.5 | (21.1)% | | VUMERITY | $212.3 | $165.8 | 28.0% | $351.1 | $293.3 | 19.7% | | Interferon (AVONEX, PLEGRIDY) | $246.7 | $250.9 | (1.7)% | $473.0 | $494.5 | (4.3)% | | TYSABRI | $454.6 | $462.2 | (1.6)% | $836.1 | $893.5 | (6.4)% | - VUMERITY revenue increased due to favorable commercial mix and a $22.0 million favorable change in estimates related to rebates and discounts, partially offset by IRA charges[361] RARE DISEASE This section examines revenue performance for Biogen Inc.'s Rare Disease products, including new launches and market growth - Rare disease revenue is expected to grow in 2025 with continued launches of SKYCLARYS in the U.S., Europe, and other markets, while global SPINRAZA revenue is anticipated to be relatively flat[366] Rare Disease Product Revenue (Millions) | Product | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :------ | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | SPINRAZA (U.S.) | $149.3 | $157.3 | (5.1)% | $303.7 | $305.8 | (0.7)% | | SPINRAZA (Rest of World) | $243.4 | $271.8 | (10.4)% | $512.9 | $464.6 | 10.4% | | SKYCLARYS | $130.3 | $100.0 | 30.3% | $254.2 | $178.0 | 42.8% | | QALSODY | $20.0 | $5.0 | 300.0% | $35.5 | $9.6 | 269.8% | - Rest of world SPINRAZA revenue increased by $48.3 million (YTD 2025) due to a one-time VAT refund of approximately $18.1 million and timing of shipments, partially offset by lower demand and unfavorable foreign currency exchange[368] BIOSIMILARS This section reviews Biogen Inc.'s biosimilar revenue, discussing sales volumes, pricing pressures, and supply chain factors - Biosimilar revenue decreased for both Q2 and YTD 2025 primarily due to lower sales volumes for IMRALDI and competitive pricing pressures in Europe[374] - Supply constraints for IMRALDI and BENEPALI, and the acquisition of a contract manufacturer by a third party in December 2024, could adversely impact 2025 sales[372] REVENUE FROM ANTI-CD20 THERAPEUTIC PROGRAMS This section details revenue generated from Biogen Inc.'s anti-CD20 therapeutic programs, including royalties and profit shares Revenue from Anti-CD20 Therapeutic Programs (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Royalty revenue on sales of OCREVUS | $353.8 | $336.3 | $642.6 | $639.0 | | Biogen's share of pre-tax profits (RITUXAN, GAZYVA, LUNSUMIO) | $107.7 | $103.4 | $191.4 | $190.5 | | Other revenue | $5.8 | $4.8 | $11.5 | $9.0 | | Total | $467.3 | $444.5 | $845.5 | $838.5 | - Increases in OCREVUS royalty revenue were driven by sales growth in the U.S[377] - Increases in pre-tax profits from RITUXAN, GAZYVA, and LUNSUMIO were primarily due to increased GAZYVA sales volumes, partially offset by decreased RITUXAN sales due to biosimilar competition[379] ALZHEIMER'S COLLABORATION REVENUE This section analyzes revenue from Biogen Inc.'s collaboration for Alzheimer's treatments, focusing on LEQEMBI sales and market expansion Alzheimer's Collaboration Revenue (LEQEMBI) (Millions) | Period | 2025 | 2024 | | :----- | :--- | :--- | | 3 Months Ended June 30, | $54.9 | $11.8 | | 6 Months Ended June 30, | $87.9 | $14.6 | - Revenue increases were primarily due to higher sales volumes from the continued launch of LEQEMBI in the U.S. and international markets, including favorable timing of shipments to China in Q2 2025[383] CONTRACT MANUFACTURING, ROYALTY AND OTHER REVENUE This section provides details on Biogen Inc.'s contract manufacturing, royalty, and other miscellaneous revenue streams Contract Manufacturing, Royalty and Other Revenue (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Contract manufacturing revenue | $225.0 | $100.0 | $507.3 | $252.2 | | Royalty and other revenue | $19.6 | $9.0 | $30.6 | $38.6 | | Total | $244.6 | $109.0 | $537.9 | $290.8 | - Contract manufacturing revenue increases were driven by the timing of certain batch commitments[386] - Full-year 2025 contract manufacturing revenue is expected to remain relatively flat due to planned plant maintenance[387] RESERVES FOR DISCOUNTS AND ALLOWANCES This section explains Biogen Inc.'s revenue-related reserves for discounts and allowances, including the impact of drug pricing regulations - The IRA's drug pricing controls and Medicare Part D redesign are anticipated to have a modest net unfavorable impact of $50.0 million to $100.0 million on 2025 revenue, concentrated in SKYCLARYS and MS portfolio products[391] Total Discounts and Allowances (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Contractual adjustments | $680.1 | $662.2 | $1,338.4 | $1,327.9 | | Discounts | $208.4 | $217.3 | $395.5 | $404.9 | | Returns | $8.7 | $12.7 | $18.2 | $23.3 | | Total Discounts and Allowances | $897.2 | $892.2 | $1,752.1 | $1,756.1 | - Contractual adjustments increased due to higher government rebates in rest of world and higher Medicare manufacturer reserves from IRA Part D redesign, partially offset by lower managed care rebates (including $45.0 million favorable change in estimates) and lower co-pay assistance[394] - Discounts decreased due to lower purchase discounts globally and lower volume discounts for biosimilars, partially offset by higher U.S. TYSABRI volume discounts[395] COST AND EXPENSE This section provides a comprehensive analysis of Biogen Inc.'s operating costs and expenses, detailing key drivers and changes Total Cost and Expense (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change | | :------- | :--------------------------- | :--------------------------- | :------- | :--------------------------- | :--------------------------- | :------- | | Cost of sales, excluding amortization and impairment of acquired intangible assets | $605.0 | $546.0 | 10.8% | $1,234.3 | $1,088.2 | 13.4% | | Research and development | $399.0 | $505.4 | (21.1)% | $833.1 | $950.8 | (12.4)% | | Acquired in-process research and development, upfront and milestone expense | $46.6 | $8.5 | 448.2% | $247.3 | $16.0 | nm | | Selling, general and administrative | $583.8 | $553.8 | 5.4% | $1,156.3 | $1,135.3 | 1.8% | | Amortization and impairment of acquired intangible assets | $130.9 | $86.9 | 50.6% | $242.7 | $165.2 | 46.9% | | Collaboration profit sharing/(loss reimbursement) | $75.0 | $62.4 | 20.2% | $133.1 | $128.0 | 4.0% | | (Gain) loss on fair value remeasurement of contingent consideration | $13.2 | — | nm | $22.8 | — | nm | | Restructuring charges | $(0.7) | $6.6 | (110.6)% | $34.6 | $18.1 | 91.2% | | Gain on sale of priority review voucher, net | — | $(88.6) | nm | — | $(88.6) | nm | | Other (income) expense, net | $48.7 | $85.2 | (42.8)% | $117.1 | $178.9 | (34.5)% | | Total Cost and Expense | $1,901.5 | $1,766.2 | 7.7% | $4,021.3 | $3,591.9 | 12.0% | COST OF SALES, EXCLUDING AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS This section analyzes Biogen Inc.'s cost of sales, excluding amortization and impairment, highlighting factors influencing product and royalty costs Cost of Sales (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Product | $415.0 | $358.4 | $877.2 | $736.1 | | Royalty | $190.0 | $187.6 | $357.1 | $352.1 | | Total Cost of Sales | $605.0 | $546.0 | $1,234.3 | $1,088.2 | - Product cost of sales increased due to higher contract manufacturing revenue (timing of batch releases) and increased SKYCLARYS amortization costs ($52.5 million in Q2 2025, $103.9 million YTD 2025), partially offset by lower inventory write-offs[401][402] - Royalty cost of sales increased due to higher royalties payable from increased VUMERITY sales (Q2 & YTD) and SPINRAZA sales (YTD), partially offset by lower TYSABRI royalties (YTD)[405][406] RESEARCH AND DEVELOPMENT This section details Biogen Inc.'s research and development expenses, including impacts from portfolio prioritization, clinical trials, and funding - R&D expense decreased by 21.1% (Q2 2025) and 12.4% (YTD 2025) primarily due to cost reduction measures from portfolio prioritization and the Fit for Growth program, and $46.0 million in SKYCLARYS inventory step-up amortization in Q2 2024[410][417] - The decrease was partially offset by higher clinical trial spend for litifilimab and felzartamab, with litifilimab spend offset by $50.0 million (Q2) and $100.0 million (YTD) in funding from Royalty Pharma[410][417] - Early stage program expense decreased due to discontinuation of BIIB121, BIIB105, and BIIB143, but was partially offset by increased development costs for BIIB080 and zorevunersen[411][418] - Late stage program expense decreased (Q2) due to litifilimab development (offset by funding) but increased (YTD) due to felzartamab development for AMR, IgAN, and PMN[411][418] - Marketed program expense decreased due to $46.0 million SKYCLARYS inventory step-up amortization in Q2 2024 and decreased LEQEMBI spend[414][419] ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT, UPFRONT AND MILESTONE EXPENSE This section analyzes expenses related to acquired in-process R&D, upfront payments, and milestone achievements from collaborations and acquisitions - This expense increased significantly due to a $30.0 million milestone payment to MorphoSys for felzartamab (IgAN) and a $16.0 million upfront payment to City Therapeutics in Q2 2025[423] - For YTD 2025, the increase was driven by a $165.0 million upfront payment to Stoke and a $35.0 million milestone payment to MorphoSys for felzartamab (AMR)[424] SELLING, GENERAL AND ADMINISTRATIVE This section reviews Biogen Inc.'s selling, general, and administrative expenses, focusing on launch support and cost-reduction initiatives - SG&A expense increased by 5.4% (Q2 2025) and 1.8% (YTD 2025) primarily due to increased operational spending on sales and marketing for LEQEMBI and SKYCLARYS launches, partially offset by Fit for Growth cost-reduction measures[426] - A slight increase in full-year 2025 SG&A expense is expected due to continued launch support for LEQEMBI and SKYCLARYS[427] AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS This section details the amortization and impairment charges related to Biogen Inc.'s acquired intangible assets, including specific product impacts - Amortization of acquired intangible assets (excluding impairment) increased to $127.4 million (Q2 2025) and $239.2 million (YTD 2025), mainly due to SKYCLARYS and TYSABRI[430] - A $3.5 million impairment charge related to an HI-Bio compound was recognized in Q2 and YTD 2025[431] COLLABORATION PROFIT SHARING/(LOSS REIMBURSEMENT) This section outlines Biogen Inc.'s profit-sharing and loss reimbursement expenses from collaborative agreements, including biosimilars and ZURZUVAE - Net profit-sharing expense for Samsung Bioepis' biosimilars collaboration was $57.2 million (Q2 2025) and $105.2 million (YTD 2025)[433] - Net profit-sharing expense for Sage's ZURZUVAE collaboration was $17.8 million (Q2 2025) and $27.9 million (YTD 2025)[434] (GAIN) LOSS ON FAIR VALUE REMEASUREMENT OF CONTINGENT CONSIDERATION This section explains the gains or losses resulting from the fair value remeasurement of Biogen Inc.'s contingent consideration obligations - Changes in fair value of contingent consideration obligations were primarily due to the passage of time[437] - A $150.0 million milestone payment for felzartamab (AMR) was achieved in Q2 2025 and substantially paid in July 2025[437] RESTRUCTURING CHARGES This section details the restructuring charges incurred by Biogen Inc. as part of its Fit for Growth program and other integration efforts 2023 Fit for Growth Program Charges (Millions) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total charges | $0.9 | $10.5 | $37.4 | $26.1 | OTHER (INCOME) EXPENSE, NET This section analyzes Biogen Inc.'s other income and expense, net, including interest income, interest expense, and investment gains/losses - Other (income) expense, net, decreased primarily due to higher interest income from increased cash balances in 2025 and higher net losses on equity securities in 2024[442] - Interest expense is expected to increase due to the issuance of the 2025 Senior Notes[443] NET (GAINS) LOSSES IN EQUITY SECURITIES This section details Biogen Inc.'s net gains or losses from equity securities, primarily from strategic investments - Net unrealized gains on equity securities for Q2 2025 were $5.3 million, primarily from Sage and Dena