10q10k10q10k.net

What changed in Biogen's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Biogen's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+694 added−721 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-15)

Top changes in Biogen's 2023 10-K

694 paragraphs added · 721 removed · 452 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

274 edited+112 added−99 removed257 unchanged
Biggest changeBIIB105 (ataxin-2 ASO) # - ALS Phase 1/2 BIIB115 (SMN ASO)* - SMA Phase 1 Parkinson's Disease and Movement Disorders BIIB122 (DNL151) * - LRRK2 Parkinson's Phase 3 BIIB122 (DNL151) * - Parkinson's Phase 2 BIIB124 (SAGE-324)* - Essential Tremor Phase 2 BIIB094 (ION859) # - Parkinson's Phase 1 BIIB101 (ION464) # - Multiple System Atrophy Phase 1 BIIB132 (ATXN-3 ASO) # - SCA3 Phase 1 Multiple Sclerosis BIIB091 (peripheral BTK inhibitor) - MS Phase 1 BIIB107 (anti-VLA4) - MS Phase 1 Neurovascular Glibenclamide IV (SUR1-TRPM4 Inhibitor) - LHI^ Stroke Phase 3 Glibenclamide IV (SUR1-TRPM4 Inhibitor) - Brain Contusion Phase 2 BIIB131 (TMS-007) - Acute Ischemic Stroke Phase 2 Genetic Neurodevelopmental Disorders BIIB121 (UBE3A ASO) # - Angelman Syndrome Phase 1 * Collaboration program ** Granted accelerated approval in the U.S. in June 2021 under the brand name ADUHELM. *** Granted accelerated approval in the U.S. in January 2023 under the brand name LEQEMBI and filed for traditional approval in the U.S., E.U. and Japan. # Option agreement ^ Large Hemispheric Infarction (LHI) For information about certain of our agreements with collaborators and other third parties, please read the subsection entitled Business Relationships below and Note 2, Acquisitions , Note 19, Collaborative and Other Relationships, and Note 20, Investments in Variable Interest Entities, to our consolidated financial statements included in this report. 9 Table of Conten ts Business Relationships As part of our business strategy, we establish business relationships, including entering into licenses, joint ventures and collaborative arrangements with other companies, universities and medical research institutions, to assist in the clinical development and/or commercialization of certain of our products and product candidates and to provide support for our research programs.
Biggest changeWe and Sage are continuing to seek feedback from the FDA and evaluating next steps. # Option agreement For information about certain of our agreements with collaborators and other third parties, please read the subsection entitled Business Relationships below and Note 2, Acquisitions , Note 19, Collaborative and Other Relationships, and Note 20, Investments in Variable Interest Entities, to our consolidated financial statements included in this report. 20 T able of Contents BUSINESS RELATIONSHIPS As part of our business strategy, we establish business relationships, including entering into licenses, joint ventures and collaborative arrangements with other companies, universities and medical research institutions, to assist in the clinical development and/or commercialization of certain of our products and product candidates and to provide support for our research programs.
Regulatory exclusivity, which may consist of regulatory data protection and market protection, also can provide meaningful protection for our products.
Regulatory exclusivity, which may consist of regulatory data protection and market protection, can also provide meaningful protection for our products.
While we continue to to advance our ESG efforts, there is no certainty that we will manage ESG matters in ways that successfully meet rapidly changing expectations from investors, regulators, third party rankings firms, customers and society as a whole. Our inability to manage ESG matters in accordance with expectations can negatively impact our reputation and business.
While we continue to advance our ESG efforts, there is no certainty that we will manage ESG matters in ways that successfully meet rapidly changing expectations from investors, regulators, third party rankings firms, customers and society as a whole. Our inability to manage ESG matters in accordance with expectations can negatively impact our reputation and business.
Alexander served as our Executive Vice President, Chief Legal, Corporate Services and Secretary from March 2017 to March 2018, as our Executive Vice President, Chief Legal Officer and Secretary from December 2011 to March 2017 and as our Executive Vice President, General Counsel and Corporate Secretary from 2006 to December 2011. Prior to joining Biogen, Ms.
Alexander served as our Executive Vice President, Chief Legal and Corporate Services from March 2017 to March 2018, as our Executive Vice President, Chief Legal Officer and Secretary from December 2011 to March 2017 and as our Executive Vice President, General Counsel and Corporate Secretary from 2006 to December 2011. Prior to joining Biogen, Ms.
Governments may use a variety of cost-containment measures to control the cost of products, including price cuts, mandatory rebates, value-based pricing and reference pricing (i.e., referencing prices in other countries and using those reference prices to set a price).
Governments may use a variety of cost-containment measures to control the cost of products, including price cuts, mandatory rebates, value-based pricing and reference pricing (i.e., referencing prices in other countries and using those reference prices to set a price).
Our ability to compete, maintain and grow our business may also be adversely affected due to a number of factors, including: • the introduction of other products, including products that may be more efficacious, safer, less expensive or more convenient alternatives to our products, including our own products and products of our collaborators; • the off-label use by physicians of therapies indicated for other conditions to treat patients; • patient dynamics, including the size of the patient population and our ability to identify, attract and maintain new and current patients to our therapies; • the reluctance of physicians to prescribe, and patients to use, our products without additional data on the efficacy and safety of such products; • damage to physician and patient confidence in any of our products, generic or biosimilars of our 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, pricing and reimbursement decisions or adverse experiences or events that may occur with patients treated with our products or generic or biosimilars of our products; • inability to obtain appropriate pricing and adequate reimbursement for our products compared to our competitors in key international markets; or • our ability to obtain and maintain patent, data or market exclusivity for our products.
Our ability to compete, maintain and grow our business may also be adversely affected due to a number of factors, including: • the introduction of other products, including products that may be more efficacious, safer, less expensive or more convenient alternatives to our products, including our own products and products of our collaborators; • the off-label use by physicians of therapies indicated for other conditions to treat patients; • patient dynamics, including the size of the patient population and our ability to identify, attract and maintain new and current patients to our therapies; • the reluctance of physicians to prescribe, and patients to use, our products without additional data on the efficacy and safety of such products; • damage to physician and patient confidence in any of our products, generic or biosimilars of our 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, pricing and reimbursement decisions or adverse experiences or events that may occur with patients treated with our products or generic or biosimilars of our products; • inability to obtain and maintain appropriate pricing and adequate reimbursement for our products compared to our competitors in key markets; or • our ability to obtain and maintain patent, data or market exclusivity for our products.
Specifically, in the U.S., under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, a patent that covers a drug approved by the FDA may be eligible for patent term extension (for up to 5 years, but not beyond a total of 14 years from the date of product approval) as compensation for patent term lost during the FDA regulatory review process.
In the U.S., under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act, a patent that covers a drug approved by the FDA may be eligible for patent term extension (for up to 5 years, but not beyond a total of 14 years from the date of product approval) as compensation for patent term lost during the FDA regulatory review process.
Health care companies are facing heightened scrutiny of their relationships with health care providers and 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.
Health care companies are facing heightened scrutiny of their relationships with health care providers and have been the target of lawsuits and investigations alleging violations of laws and 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.
We may fail to obtain or preserve patent and other intellectual property rights, including certain regulatory forms of exclusivity, 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, which could result in financial, business or reputational harm to us or could cause a decline or volatility in our stock price.
We may fail to obtain, defend or preserve patent and other intellectual property rights, including certain regulatory forms of exclusivity, 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, which could result in financial, business or reputational harm to us or could cause a decline or volatility in our stock price.
Under this collaboration, both companies will share equal responsibility and costs for development as well as profits and losses for commercialization in the U.S. Outside the U.S., we are responsible for development and commercialization, excluding Japan, Taiwan and South Korea, with respect to zuranolone and may pay Sage potential tiered royalties in the high teens to low twenties.
Under this collaboration, both companies will share equal responsibility and costs for development as well as profits and losses for commercialization in the U.S. Outside of the U.S., we are responsible for development and commercialization, excluding Japan, Taiwan and South Korea, with respect to zuranolone and may pay Sage potential tiered royalties in the high teens to low twenties.
Although the World Trade Organization's agreement on trade-related aspects of intellectual property rights (TRIPS) requires signatory countries to provide regulatory exclusivity to innovative pharmaceutical products, implementation and enforcement varies widely from country to country. We also rely upon other forms of unpatented confidential information to remain competitive.
Although the World Trade Organization's agreement on trade-related aspects of intellectual property rights requires signatory countries to provide regulatory exclusivity to innovative pharmaceutical products, implementation and enforcement varies widely from country to country. We also rely upon other forms of unpatented confidential information to remain competitive.
While it is impossible to predict accurately the future costs associated with environmental compliance and potential remediation activities, compliance with environmental laws is not expected to require significant capital expenditures and has not had, and is not expected to have, a material adverse effect on our operations or competitive position.
While it is impossible to predict accurately the future costs associated with environmental compliance and potential remediation activities, compliance with environmental laws is not currently expected to require significant capital expenditures and has not had, and is not expected to have, a material adverse effect on our operations or competitive position.
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 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 or perspectives 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; • requirements that provide for increased transparency of clinical trial results and quality data, such as the EMA'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.
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 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; 49 T able of Contents • changes in the FDA and foreign regulatory approval processes or perspectives 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; • requirements that provide for increased transparency of clinical trial results and quality data, such as the EMA'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.
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 expense may lead to increased use of managed care organizations by Medicaid programs.
State Medicaid programs are 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 expense may lead to increased use of managed care organizations by Medicaid programs.
Medicare Part B pays for such drugs under a payment methodology based on the average sales price (ASP) of the drugs. Manufacturers, including us, are required to provide ASP information to the CMS on a quarterly basis. The manufacturer-submitted information is used to calculate Medicare payment rates.
Medicare Part B pays for such drugs under a payment methodology based on the average sales price of the drugs. Manufacturers, including us, are required to provide average sales price information to the CMS on a quarterly basis. The manufacturer-submitted information is used to calculate Medicare payment rates.
We have a global collaboration and license agreement with Sage to jointly develop and commercialize zuranolone for the potential treatment of MDD and PPD and BIIB124 (SAGE-324) for the potential treatment of essential tremor with potential in other neurological conditions such as epilepsy.
We have a global collaboration and license agreement with Sage to jointly develop and commercialize ZURZUVAE (zuranolone) for the treatment of PPD and potential treatment of MDD and BIIB124 (SAGE-324) for the potential treatment of essential tremor with potential in other neurological conditions such as epilepsy.
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.
There is also enhanced scrutiny of company-sponsored patient assistance programs, including testing, 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.
Another key aspect of remaining competitive in the industry is recruiting and retaining leading scientists and technicians to conduct our research activities and advance our development programs, including with the commercial expertise to effectively market our products.
Another key aspect of remaining competitive in the industry is recruiting and retaining leading scientists and technicians to conduct our research activities and advance our development programs, including with the regulatory and commercial expertise to effectively advance and market our products.
We also have an agreement with Samsung Bioepis to commercialize, over a 10-year term, three anti-TNF biosimilar product candidates in certain countries in Europe and, in the case of BENEPALI, Japan.
SAMSUNG BIOEPIS We have an agreement with Samsung Bioepis to commercialize, over a 10-year term, three anti-TNF biosimilar product candidates in certain countries in Europe and, in the case of BENEPALI, Japan.
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.
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 or delay the likelihood of regulatory approval.
We believe that competition and leadership in the industry is based on managerial and technological excellence and innovation as well as establishing patent and other proprietary positions through research and development.
We believe that competition and leadership in the industry is based on scientific, managerial and technological excellence and innovation as well as establishing patent and other proprietary positions through research and development.
Management and other personnel changes may disrupt our operations, and we may have difficulty retaining personnel or attracting and retaining qualified replacements on a timely basis for the management and other personnel who may leave the Company.
Management, personnel and other organizational changes may disrupt our operations, and we may have difficulty retaining personnel or attracting and retaining qualified replacements on a timely basis for the management and other personnel who may leave the Company.
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 or raw material shortages, public health epidemics, natural disasters, power failures, cyber-attacks and many other factors. • Risks Relating to Compliance with current GMP (cGMP).
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 or raw material shortages, geopolitical instability, public health epidemics, natural disasters, power failures, cyber-attacks and many other factors. • Risks Relating to Compliance with current GMP (cGMP).
On August 16, 2022, President Biden signed into law the IRA, which provides for (i) the government to negotiate prices for select high-cost Medicare Part D drugs (beginning in 2026) and Part B drugs (beginning in 2028), (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation 16 Table of Conten ts beginning in 2022 for Part D and 2023 for Part B, and (iii) Medicare Part D redesign which replaces the current coverage gap provisions and establishes a $2,000 cap for out-of-pocket costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for 10.0% of costs up to the $2,000 cap and 20.0% after that cap is reached.
On August 16, 2022, President Biden signed into law the IRA, which provides for (i) the government to negotiate prices for select high-cost Medicare Part D drugs (beginning in 2026) and Part B drugs (beginning in 2028), (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation beginning in 2022 for Part D and 2023 for Part B, and (iii) Medicare Part D redesign which replaces the current coverage gap provisions and establishes a $2,000 cap for out-of-pocket costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for 10.0% of costs up to the $2,000 cap and 20.0% after that cap is reached.
To create and sustain a workplace as diverse and inclusive as the patients we serve, we offer programs that invest in our talent pipeline and in our current leaders, including: • Activate, Reflect and Co-Create: Preparing top talent for the rigors of executive roles. • Women’s Leadership Program: Addressing the unique challenges faced by female leaders to increase influence and impact. • Executive Leadership Retreat: Immersing leaders in topics designed to help them shape culture and build resilience. • The Partnership, Inc's BioDiversity Fellows Program: To continue to bolster our talent pipeline with a diverse mix of leaders, high potential, mid-career, underrepresented minorities participate in this program, which we helped create. • Women on the Rise: Addressing the unique challenges faced by mid-level female leaders to increase influence and impact. • Emerging Leaders: Preparing high-potential individual contributors for first-level leadership roles. • BetterUp: Coaching program available to support individuals as they work toward enhancing their impact in the organization.
To create and sustain a workplace as diverse and inclusive as the patients we serve, we offer programs that invest in our talent pipeline and in our current leaders, including: • Activate, Reflect and Co-Create: Preparing top talent for the rigors of executive roles. • Women’s Leadership Program: Addressing the unique challenges faced by female leaders to increase influence and impact. • Executive Leadership Retreat: Immersing leaders in topics designed to help them shape culture and build resilience. • The Partnership, Inc's BioDiversity Fellows Program: To continue to bolster our talent pipeline with a diverse mix of leaders, high potential, mid-career, underrepresented minorities participate in this program, which we helped create. • Women on the Rise: Addressing the unique challenges faced by mid-level female leaders to increase influence and impact. • Emerging Leaders: Preparing high-potential individual contributors for first-level leadership roles. 33 T able of Contents • BetterUp: Coaching program available to support individuals as they work toward enhancing their impact in the organization.
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 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; • our ability to receive reimbursement for our products or our ability to receive comparable reimbursement to that of competing products; 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.
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 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; • our ability to receive reimbursement for our products or our ability to receive comparable reimbursement to that of competing products; and 42 T able of Contents • 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.
In 2022 we continued to make significant progress integrating Human Performance into our Environment, Health and Safety programs. We believe that, when it comes to safety, workers are part of the solution. We encourage employees to collaboratively engage in proactive problem solving through practices such as Open Reporting and Work Observation and Risk Conversations.
In 2023 we continued to make significant progress integrating Human Performance into our Environment, Health and Safety programs. We believe that, when it comes to safety, workers are part of the solution. We encourage employees to collaboratively engage in proactive problem solving through practices such as Open Reporting and Work Observation and Risk Conversations.
Restrictions on use or safety warnings that may be required to be included in the label of our products may significantly reduce expected revenue for those products and require significant expense and management time. Risks Related to Our Operations A breakdown or breach of our technology systems could subject us to liability or interrupt the operation of our business.
Restrictions on use or safety warnings that may be required to be included in the label of our products may significantly reduce expected revenue for those products and require significant expense and management time. Risks Related to Our Operations A breakdown or breach of our information systems could subject us to liability or interrupt the operation of our business.
However, as the degree of impact from this legislation on our business depends on a number of forthcoming implementation actions by regulatory authorities, the full extent of the IRA’s impact on our sales and, in turn, our business, remains unclear. • Federal Agency Discounted Pricing : Our products are subject to discounted pricing when purchased by federal agencies via the Federal Supply Schedule (FSS).
However, as the degree of impact from this legislation on our business depends on a number of forthcoming implementation actions by regulatory authorities, the full extent of the IRA’s impact on our sales and, in turn, our business, remains unclear. • Federal Agency Discounted Pricing : Our products are subject to discounted pricing when purchased by federal agencies via the FSS.
(9) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2031. (10) A patent with this subject matter may be entitled to patent term extension in the U.S. The existence of patents does not guarantee our right to practice the patented technology or commercialize the patented product.
(9) A patent with this subject matter may be entitled to patent term extension in the U.S. (10) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2032. The existence of patents does not guarantee our right to practice the patented technology or commercialize the patented product.
We may fail to initiate or complete transactions for many reasons, including failure to obtain regulatory or other approvals as well as disputes or litigation. Furthermore, 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 fail to initiate or complete transactions for many reasons, including failure to obtain regulatory or other approvals as well as a result of disputes or litigation. Furthermore, 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.
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.
For example, provisions of the 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.
(3) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2024. (4) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2024.
(3) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2024. (4) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2028.
(5) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2028. (6) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2026.
(5) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2026. (6) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2026.
(7) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2026. (8) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2031.
(7) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2031. (8) This patent is subject to granted SPCs in certain European countries, which extended the patent term in those countries to 2031.
Good Clinical Practices The FDA, the EMA and other regulatory agencies promulgate regulations and standards for designing, conducting, monitoring, auditing and reporting the results of clinical trials to ensure that the data and results are accurate and that the rights and welfare of trial participants are adequately protected (commonly referred to as current Good Clinical Practices (cGCP)).
GOOD CLINICAL PRACTICES The FDA, the EMA and other regulatory agencies promulgate regulations and standards for designing, conducting, monitoring, auditing and reporting the results of clinical trials to ensure that the data and results are accurate and that the rights and welfare of trial participants are adequately protected (commonly referred to as current GCP).
Identified material risks and opportunities are reported to our ERM team, which reports to our Executive Committee and Board of Directors. We consider and address those risks and opportunities that are financially material and may impact our business model, as well as mitigation measures that are in place or need to be adopted.
Identified climate-related material risks and opportunities are reported to our ERM team, which reports to our Executive Committee and Board of Directors. We consider and address those risks and opportunities that are financially material and may impact our business model, as well as mitigation measures that are in place or need to be adopted.
For the ninth consecutive year, we were recognized as a Best Place to Work for LGBTQ+ Equality by the Human Rights Campaign, scoring 100% on their Corporate Equality Index. Strengthening our Global Competency We are committed to strengthening the DE&I awareness and capability of our employees.
For the tenth consecutive year, we were recognized as a Best Place to Work for LGBTQ+ Equality by the Human Rights Campaign, scoring 100% on their Corporate Equality Index. STRENGTHENING OUR GLOBAL COMPETENCY We are committed to strengthening the DE&I awareness and capability of our employees.
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).
As a result, we are increasingly dependent upon our information systems to operate our business and our ability to effectively manage our business depends on the security, reliability and adequacy of our information 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).
In addition, we have research collaboration agreements with Ionis under which both companies perform discovery level research and will develop and commercialize new ASO drug candidates for the potential treatment of SMA and additional antisense or other therapeutics for the potential treatment of neurological diseases. Genentech, Inc.
In addition, we have research collaboration agreements with Ionis under which both companies perform discovery level research and will develop and commercialize new ASO drug candidates for the potential treatment of SMA and additional antisense or other therapeutics for the potential treatment of neurological diseases.
RITUXAN in Rheumatoid Arthritis RITUXAN competes with several different types of therapies in the rheumatoid arthritis market, including, among others, traditional disease-modifying anti-rheumatic drugs such as steroids, methotrexate and cyclosporine, TNF inhibitors, ORENCIA (abatacept), ACTEMRA (tocilizumab) and XELJANZ (tofacitinib).
RITUXAN in Rheumatoid Arthritis RITUXAN competes with several different types of therapies in the rheumatoid arthritis market, including, among others, traditional disease-modifying anti-rheumatic drugs such as steroids, methotrexate and cyclosporine, TNF inhibitors, ORENCIA (abatacept), ACTEMRA (tocilizumab) and XELJANZ (tofacitinib) and biosimilar versions of RITUXAN.
With many employees continuing to work from home, virtual learning plays a key role. Virtual learnings are available through Biogen University as well as LinkedIn Learning. Through Biogen University we offer more than 1,200 instructor-based courses, of which approximately 300 are available virtually.
With many employees continuing to work from home, virtual learning plays a key role. Virtual learnings are available through Biogen University as well as LinkedIn Learning. Through Biogen University we offer more than 1,000 instructor-based courses, of which approximately 200 are available virtually.
Our inability to obtain and maintain adequate prices in a particular country may not only limit the revenue from our products within that country but may also adversely affect our ability to secure acceptable prices in existing and potential new markets, which may limit market growth.
Our inability to obtain and maintain adequate prices in a particular country may not only limit the revenue from our products within that country but may also adversely affect our ability to secure acceptable prices in existing and potential new markets, which may limit market growth and result in reductions in revenue.
Key Business Developments The following is a summary of key developments affecting our business since the beginning of 2022. For additional information on our collaborative and other relationships discussed below, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
KEY BUSINESS DEVELOPMENTS The following is a summary of key developments affecting our business since the beginning of 2023. For additional information on our collaborative and other relationships discussed below, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
We rely on third-party suppliers and manufacturers for many aspects of our manufacturing process for our products and product candidates including VUMERITY. 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.
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.
Reliance on third-parties subjects us to a number of risks, including: • we may be unable to control the resources our collaborators or third-parties devote to our programs, products or product candidates; • disputes may arise under an agreement, including with respect to the achievement and payment of milestones, payment of development or commercial costs, ownership of rights to technology developed, and the underlying agreement may fail to provide us with significant protection or may fail to be effectively enforced if the collaborators or third-parties fail to perform; • the interests of our collaborators or third-parties may not always be aligned with our interests, and such parties may not pursue regulatory approvals or market a product in the same manner or to the same extent that we would, which could adversely affect our revenue, or may adopt tax strategies that could have an adverse effect on our business, results of operations or financial condition; • third-party relationships 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 or third-parties to comply with applicable laws, including tax laws, regulatory requirements and/or applicable contractual obligations or to fulfill any responsibilities they may have to protect and enforce any intellectual property rights underlying our products could have an adverse effect on our revenue as well as involve us in possible legal proceedings; and • any improper conduct or actions on the part of our collaborators or 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.
Reliance on third-parties subjects us to a number of risks, including: • we may be unable to control the resources our collaborators or third-parties devote to our programs, products or product candidates, which may affect our ability to achieve development goals or milestones; • disputes may arise under an agreement, including with respect to the achievement and payment of milestones, payment of development or commercial costs, ownership of rights to technology developed, and the underlying agreement may fail to provide us with significant protection or may fail to be effectively enforced if the collaborators or third-parties fail to perform; • the interests of our collaborators or third-parties may not always be aligned with our interests, and such parties may not pursue regulatory approvals or market a product in the same manner or to the same extent 43 T able of Contents that we would, which could adversely affect our revenue, or may adopt tax strategies that could have an adverse effect on our business, results of operations or financial condition; • third-party relationships 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 or third-parties to comply with applicable laws, including tax laws, regulatory requirements and/or applicable contractual obligations or to fulfill any responsibilities they may have to protect and enforce any intellectual property rights underlying our products could have an adverse effect on our revenue or reputation as well as involve us in possible legal proceedings; and • any improper conduct or actions on the part of our collaborators or third-parties could subject us to civil or criminal investigations and monetary and injunctive penalties, require management attention, impact the accuracy and timing of our financial reporting and/or adversely impact our ability to conduct business, our operating results and our reputation.
Ionis Pharmaceuticals, Inc . We have an exclusive, worldwide option and collaboration agreement with Ionis relating to the development and commercialization of antisense therapeutics for up to three gene targets. Under a separate collaboration and license agreement with Ionis, we have an exclusive, worldwide license to develop and commercialize SPINRAZA for the treatment of SMA.
IONIS We have an exclusive, worldwide option and collaboration agreement with Ionis relating to the development and commercialization of antisense therapeutics for up to three gene targets. Under a separate collaboration and license agreement with Ionis, we have an exclusive, worldwide license to develop and commercialize SPINRAZA for the treatment of SMA.
Foreign Corrupt Practices Act (FCPA), which 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.
FCPA, which 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 addition to the centralized procedure, the European regulatory framework includes the following options for regulatory review and approval in the E.U. member states: • a national procedure, where the first application is made to the competent authority in one E.U. member state only; • a decentralized procedure, where applicants submit identical applications to several E.U. member states and receive simultaneous approval, if the medicine has not yet been authorized in any E.U. member state; and • a mutual recognition procedure, where applicants that have a medicine authorized in one E.U. member state can apply for mutual recognition of this authorization in other E.U. member states As in the U.S., the E.U. also has distinct approaches intended to optimize the regulatory pathways for therapeutically important drugs, including the Priority Medicines Evaluation Scheme (PRIME), accelerated assessment and conditional marketing authorization.
In addition to the centralized procedure, the European regulatory framework includes the following options for regulatory review and approval in the E.U. member states: • a national procedure, where the first application is made to the competent authority in one E.U. member state only; 24 T able of Contents • a decentralized procedure, where applicants submit identical applications to several E.U. member states and receive simultaneous approval, if the medicine has not yet been authorized in any E.U. member state; and • a mutual recognition procedure, where applicants that have a medicine authorized in one E.U. member state can apply for mutual recognition of this authorization in other E.U. member states As in the U.S., the E.U. also has distinct approaches intended to optimize the regulatory pathways for therapeutically important drugs, including the Priority Medicines Evaluation Scheme, accelerated assessment and conditional marketing authorization.
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.
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.
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.
Biosimilar products may face extensive intellectual property clearances and 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.
Prior to joining Biogen, Ms. Kramer served as the Senior Vice President and Chief Accounting Officer of Hertz Global Holdings, Inc., a car rental company, from May 2014 to November 2018. Prior to that, Ms.
Kramer served as the Senior Vice President and Chief Accounting Officer of Hertz Global Holdings, Inc., a car rental company, from May 2014 to November 2018. Prior to that, Ms.
We commercialize BENEPALI, IMRALDI and FLIXABI pursuant to our agreement with Samsung Bioepis in certain countries in Europe, as well as BYOOVIZ in the U.S. We focus our sales and marketing efforts on specialist physicians in private practice or at major medical centers. We use customary industry practices to market our products and to educate physicians.
We commercialize BENEPALI, IMRALDI and FLIXABI pursuant to our agreement with Samsung Bioepis in certain countries in Europe, as well as BYOOVIZ in the U.S. and certain international markets. We focus our sales and marketing efforts on physicians in private practice or at major medical centers. We use customary industry practices to market our products and to educate physicians.
By applying our expertise in biologics and our growing capabilities in small molecule, antisense, gene therapy, gene editing and other technologies, we target specific medical needs where we believe new or better treatments are needed.
By applying our expertise in biologics and our capabilities in small molecule, antisense, gene therapy and other technologies, we target specific medical needs where we believe new or better treatments are needed.
Additionally, for the third consecutive year, we were awarded the DI-NC Employer Award by Disability:IN North Carolina for our commitment to champion and invest in disability inclusion at the affiliate and national levels.
Additionally, for the fourth consecutive year, we were awarded the DI-NC Employer Award by Disability:IN North Carolina for our commitment to champion and invest in disability inclusion at the affiliate and national levels.
New U.S. data privacy and security laws, such as the California Consumer Privacy Act (CCPA), and others that may be passed, similarly introduce requirements with respect to personal information, and non-compliance with the CCPA may result in liability through private actions (subject to statutorily defined damages in the event of certain data breaches) and enforcement.
New U.S. data privacy and security laws, such as the CCPA, and others that may be passed, similarly introduce requirements with respect to personal information, and non-compliance with the CCPA may result in liability through private actions (subject to statutorily defined damages in the event of certain data breaches) and enforcement.
We have focused on ensuring that our employees have the resources and learning they need to contribute to our strategy. Our people managers are trained on inclusive recruiting and hiring and our global employees are trained on DE&I curriculum. In 2022 we introduced GlobeSmart®, a tool to enhance cross-cultural collaboration, increase cultural agility and further connect our global teams.
We have focused on giving our employees the resources and learning they need to contribute to our strategy. Our people managers are trained on inclusive recruiting and hiring and our global employees are trained on DE&I curriculum. In 2022 we introduced GlobeSmart®, a tool to enhance cross-cultural collaboration, increase cultural agility and further connect our global teams.
If our studies fail to comply with applicable cGCP guidelines, the clinical data generated in our clinical trials may be deemed unreliable and relevant regulatory agencies may require us to perform additional clinical trials before approving our marketing applications. Noncompliance can also result in civil or criminal sanctions.
If our studies fail to comply with applicable current GCP guidelines, the clinical data generated in our clinical trials may be deemed unreliable and relevant regulatory agencies may require us to perform additional clinical trials before approving our marketing applications. Noncompliance can also result in civil or criminal sanctions.
If a product 15 Table of Conten ts which has an orphan drug designation subsequently receives an initial FDA approval for the indication for which it has such designation, the product is entitled to orphan exclusivity, i.e., the FDA may not approve any other applications to market the same drug for the same indication for a period of seven years following marketing approval, except in certain very limited circumstances, such as if the later product is shown to be clinically superior to the orphan product.
If a product which has an orphan drug designation subsequently receives an initial FDA approval for the indication for which it has such designation, the product is entitled to orphan exclusivity, i.e., the FDA may not approve any other applications to market the same drug for the same indication for a period of seven years following marketing approval, except in certain very limited circumstances, such as if the later product is shown to be clinically superior to the orphan product.
In the E.U., medicinal products that receive and maintain an orphan designation are entitled to 10 years of market exclusivity following approval, protocol assistance and access to the centralized procedure for marketing authorization. SPINRAZA has been granted orphan drug designation in the U.S., the E.U. and Japan.
In the E.U., medicinal products that receive and maintain an orphan designation are entitled to 10 years of market exclusivity following approval, protocol assistance and access to the centralized procedure for marketing authorization. SPINRAZA has been granted orphan drug designation in the U.S., the E.U. and Japan. QALSODY and SKYCLARYS have been granted orphan drug designation in the U.S.
Our Executive Committee has responsibility for evaluating the impact of climate change on the business and overseeing actions taken by the company to limit its adverse impact on the environment. Our Enterprise Risk Management (ERM) framework is designed to ensure climate-related risks and opportunities are integrated into our overall business strategy.
Our Executive Committee has responsibility for evaluating the impact of climate change on the business and overseeing actions taken by the company to limit its adverse impact on the environment. Our ERM framework is designed to ensure climate-related risks and opportunities are integrated into our overall business strategy.
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 we prefer to pursue other opportunities in our pipeline.
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 we prioritize other opportunities in our pipeline.
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.
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 to make any such acquisition if suitable candidates are identified.
In addition to our drug substance manufacturing facilities, we have a drug product manufacturing facility and supporting infrastructure in RTP, NC, including a parenteral facility and an oral solid dose products manufacturing facility. The parenteral facility adds capabilities and capacity for filling biologics into vials and is used for filling product candidates.
In addition to our drug substance manufacturing facilities, we have a drug product manufacturing facility and supporting infrastructure in RTP, North Carolina, including a parenteral facility and an oral solid dose products manufacturing facility. The parenteral facility adds capabilities and capacity for filling biologics into vials and is used for filling product candidates.
Breakthrough therapy status does not guarantee that a product will be eligible for priority review and does not ensure FDA approval. 12 Table of Conten ts • Priority Review : “Priority review” only applies to applications (original or efficacy supplement) for a drug that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness of the treatment, diagnosis or prevention of a serious condition.
Breakthrough therapy status does not guarantee that a product will be eligible for priority review and does not ensure FDA approval. • Priority Review : “Priority review” only applies to applications (original or efficacy supplement) for a drug that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness of the treatment, diagnosis or prevention of a serious condition.
National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (NIH Guidelines). By local ordinance, we are required to, among other things, comply with the NIH Guidelines in relation to our facilities in RTP, NC and are required to operate pursuant to certain permits.
National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (NIH Guidelines). By local ordinance, we are required to, among other things, comply with the NIH Guidelines in relation to our facilities in RTP, North Carolina and are required to operate pursuant to certain permits.
We are dependent on a third-party for the manufacture of our biosimilar products and such third-party may not perform its obligations in a timely and 32 Table of Conten ts 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; • Intellectual Property and Regulatory Challenges.
We are dependent on a third-party for the manufacture of our biosimilar products and such third-party may not perform its 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; • Intellectual Property and Regulatory Challenges.
In many countries, the health care professionals we regularly interact with may meet the FCPA's definition of a foreign government official. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect their transactions and to devise and maintain an adequate system of internal accounting controls.
In many countries, the health care professionals we regularly interact with may meet the FCPA's definition of a foreign government official. The FCPA also requires public companies to make and keep books and records that 28 T able of Contents accurately and fairly reflect their transactions and to devise and maintain an adequate system of internal accounting controls.
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 the global economy and the delivery of healthcare treatments; • less favorable intellectual property or other applicable laws; • the inability to obtain necessary foreign regulatory approvals of products in a timely manner; • limitations and additional pressures on our ability to obtain and maintain product pricing, reimbursement or receive price increases, including those resulting from governmental or regulatory requirements; • increased cost of goods due to factors such as inflation and supply chain disruptions; • additional complexity in manufacturing internationally; • delays in clinical trials relating to geopolitical instability related to Russia's invasion of Ukraine; • 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 revenue, net income and value of certain of our investments; • 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.
Our sales and operations are subject to the risks of doing business internationally, including: • the impact of public health epidemics on the global economy and the delivery of healthcare treatments; • less favorable intellectual property or other applicable laws; • the inability to obtain necessary foreign regulatory approvals of products in a timely manner; • limitations and additional pressures on our ability to obtain and maintain product pricing, reimbursement or receive price increases, including those resulting from governmental or regulatory requirements; • increased cost of goods due to factors such as inflation and supply chain disruptions; • additional complexity in manufacturing internationally, including materials manufactured in China; • delays in clinical trials relating to geopolitical instability related to Russia's invasion of Ukraine and the military conflict in the Middle East; • 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 revenue, net income and value of certain of our investments; • the imposition of governmental controls; 50 T able of Contents • 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.
The European Parliament and the Council of the E.U. adopted a comprehensive general data privacy regulation (GDPR) in 2016 to replace the current E.U. Data Protection Directive and related country-specific legislation. The GDPR took effect in May 2018 and governs the collection and use of personal data in the E.U.
The European Parliament and the Council of the E.U. adopted a comprehensive GDPR in 2016 to replace the current E.U. Data Protection Directive and related country-specific legislation. The GDPR took effect in May 2018 and governs the collection and use of personal data in the E.U.
We also provide charitable contributions to 11 Table of Conten ts independent charitable organizations that assist patients with out-of-pocket expenses associated with their therapy. We believe all healthcare stakeholders have a shared responsibility to ensure patients have equitable access to new, innovative medicines. We regularly review our pricing strategy and prioritize patient access to our therapies.
We also provide charitable contributions to independent charitable organizations that assist patients with out-of-pocket expenses associated with their therapy. We believe all healthcare stakeholders have a shared responsibility to ensure patients have equitable access to new, innovative medicines. We regularly review our pricing strategy and prioritize patient access to our therapies.
Our technology systems, including our cloud technologies, continue to increase in multitude and complexity, increasing our vulnerability when breakdowns, malicious intrusions and random attacks occur.
Our information systems, including our cloud technologies, continue to increase in multitude and complexity, increasing our vulnerability when breakdowns, malicious intrusions and random attacks occur.
Cyber-attacks also include manufacturing, hardware or software supply chain attacks, which could cause a delay in the manufacturing of products or products produced for contract manufacturing or lead to a data privacy or security breach. Our key business partners face similar risks and any security breach of their systems could adversely affect our security posture.
Cybersecurity threats and incidents also include manufacturing, hardware or software supply chain attacks, which could cause a delay in the manufacturing of products or products produced for contract manufacturing or lead to a data privacy or security breach. Our key business partners face similar risks and any security breach of their systems could adversely affect our security posture.
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.
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 or other patient assistance programs, we could be subject to significant fines or penalties.
Under our agreements with Samsung Bioepis, we commercialize three anti-tumor necrosis factor (TNF) biosimilars in certain countries in Europe: BENEPALI, an etanercept biosimilar referencing ENBREL, IMRALDI, an adalimumab biosimilar referencing HUMIRA, and FLIXABI, an infliximab biosimilar referencing REMICADE.
Under our agreements with Samsung Bioepis, we commercialize three anti-TNF biosimilars in certain countries in Europe: BENEPALI, an etanercept biosimilar referencing ENBREL, IMRALDI, an adalimumab biosimilar referencing HUMIRA, and FLIXABI, an infliximab biosimilar referencing REMICADE.
Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report. 8 Table of Conten ts The table below highlights our current research and development programs that are in clinical trials and the current phase of such programs.
Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report. The table below highlights our current research and development programs that are in clinical trials and the current phase of such programs.
In the U.S., federal and state authorities are paying increased attention to enforcement of these laws 17 Table of Conten ts within the pharmaceutical industry and private individuals have been active in alleging violations of the laws and bringing suits on behalf of the government under the federal civil False Claims Act.
In the U.S., federal and state authorities are paying increased attention to enforcement of these laws within the pharmaceutical industry and private individuals have been active in alleging violations of the laws and bringing suits on behalf of the government under the federal civil False Claims Act.
Based on new safety information that emerges after approval, the FDA can mandate product labeling changes, impose a new REMS or the addition of elements to an existing REMS, require new post-marketing studies (including additional clinical trials) or suspend or withdraw approval of the product.
Based on new safety information that emerges after approval, the FDA can mandate product labeling changes, impose a new REMS or the addition of elements to 23 T able of Contents an existing REMS, require new post-marketing studies (including additional clinical trials) or suspend or withdraw approval of the product.
In addition, we are committed to providing flexible benefits designed to allow our diverse global workforce to have reward opportunities that meet their varied needs so that they are inspired to perform their best on behalf of patients and stockholders each day.
In addition, we are committed to 32 T able of Contents providing flexible benefits designed to allow our diverse global workforce to have reward opportunities that meet their varied needs so that they are inspired to perform their best on behalf of patients and stockholders each day.
Furthermore, the approval of a product candidate by one regulatory agency does not mean that other regulatory agencies will also approve such product candidate. 28 Table of Conten ts Success in preclinical work or early-stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful.
Furthermore, the approval of a product candidate by one regulatory agency does not mean that other regulatory agencies will also approve such product candidate. Success in preclinical work or early-stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful.

… 405 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

80 edited+87 added−105 removed15 unchanged
Biggest changeRESULTS OF OPERATIONS Revenue Revenue is summarized as follows: For the Years Ended December 31, % Change $ Change 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 (In millions, except percentages) 2022 2021 2020 Product revenue, net: United States $ 3,469.3 $ 3,805.7 $ 5,900.1 (8.8) % (35.5) % $ (336.4) $ (2,094.4) Rest of world 4,518.5 5,041.2 4,792.1 (10.4) 5.2 (522.7) 249.1 Total product revenue, net 7,987.8 8,846.9 10,692.2 (9.7) (17.3) (859.1) (1,845.3) Revenue from anti-CD20 therapeutic programs 1,700.5 1,658.5 1,977.8 2.5 (16.1) 42.0 (319.3) Other revenue 485.1 476.3 774.6 1.8 (38.5) 8.8 (298.3) Total revenue $ 10,173.4 $ 10,981.7 $ 13,444.6 (7.4) % (18.3) % $ (808.3) $ (2,462.9) 52 Table of Conten ts Product Revenue Product revenue is summarized as follows: For the Years Ended December 31, % Change $ Change 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 (In millions, except percentages) 2022 2021 2020 Multiple Sclerosis (MS): TECFIDERA $ 1,443.9 $ 1,951.9 $ 3,841.1 (26.0) % (49.2) % $ (508.0) $ (1,889.2) VUMERITY (1) 553.4 410.4 64.3 34.8 538.3 143.0 346.1 Total Fumarate 1,997.3 2,362.3 3,905.4 (15.5) (39.5) (365.0) (1,543.1) AVONEX 973.5 1,208.7 1,491.9 (19.5) (19.0) (235.2) (283.2) PLEGRIDY 331.9 357.4 385.6 (7.1) (7.3) (25.5) (28.2) Total Interferon 1,305.4 1,566.1 1,877.5 (16.6) (16.6) (260.7) (311.4) TYSABRI 2,030.9 2,063.1 1,946.1 (1.6) 6.0 (32.2) 117.0 FAMPYRA 96.6 105.2 103.1 (8.2) 2.0 (8.6) 2.1 Subtotal: MS 5,430.2 6,096.7 7,832.1 (10.9) (22.2) (666.5) (1,735.4) Spinal Muscular Atrophy: SPINRAZA 1,793.5 1,905.1 2,052.1 (5.9) (7.2) (111.6) (147.0) Biosimilars: BENEPALI 441.0 498.3 481.6 (11.5) 3.5 (57.3) 16.7 IMRALDI 224.5 233.4 216.3 (3.8) 7.9 (8.9) 17.1 FLIXABI 81.3 99.4 97.9 (18.2) 1.5 (18.1) 1.5 BYOOVIZ (2) 4.3 — — nm — 4.3 — Subtotal: Biosimilars 751.1 831.1 795.8 (9.6) 4.4 (80.0) 35.3 Other: FUMADERM 8.2 11.0 12.2 (25.5) (9.8) (2.8) (1.2) ADUHELM 4.8 3.0 — 60.0 nm 1.8 3.0 Total product revenue, net $ 7,987.8 $ 8,846.9 $ 10,692.2 (9.7) % (17.3) % $ (859.1) $ (1,845.3) (1) VUMERITY became commercially available in the E.U. during the fourth quarter of 2021.
Biggest changeRevenue is summarized as follows: For the Years Ended December 31, % Change $ Change 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 (In millions, except percentages) 2023 2022 2021 Product revenue, net: United States $ 3,141.4 $ 3,469.3 $ 3,805.7 (9.5) % (8.8) % $ (327.9) $ (336.4) Rest of world 4,105.3 4,518.5 5,041.2 (9.1) (10.4) (413.2) (522.7) Total product revenue, net 7,246.7 7,987.8 8,846.9 (9.3) (9.7) (741.1) (859.1) Revenue from anti-CD20 therapeutic programs 1,689.6 1,700.5 1,658.5 (0.6) 2.5 (10.9) 42.0 Contract manufacturing, royalty and other revenue 899.3 485.1 476.3 85.4 1.8 414.2 8.8 Total revenue $ 9,835.6 $ 10,173.4 $ 10,981.7 (3.3) % (7.4) % $ (337.8) $ (808.3) PRODUCT REVENUE Product revenue is summarized as follows: For the Years Ended December 31, % Change $ Change 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 (In millions, except percentages) 2023 2022 2021 Multiple Sclerosis $ 4,661.9 $ 5,430.2 $ 6,096.7 (14.1) % (10.9) % $ (768.3) $ (666.5) Rare disease 1,803.0 1,793.5 1,905.1 0.5 (5.9) 9.5 (111.6) Biosimilars 770.0 751.1 831.1 2.5 (9.6) 18.9 (80.0) Other (1) 11.8 13.0 14.0 (9.2) (7.1) (1.2) (1.0) Total product revenue, net $ 7,246.7 $ 7,987.8 $ 8,846.9 (9.3) % (9.7) % $ (741.1) $ (859.1) (1) Other includes FUMADERM, ADUHELM and ZURZUVAE, which became commercially available in the U.S. during the fourth quarter of 2023. 67 T able of Contents MULTIPLE SCLEROSIS • Global TECFIDERA revenue decreased $431.4 million, from $1,443.9 million in 2022 to $1,012.5 million in 2023, or 29.9%, driven by a decrease in demand as a result of multiple TECFIDERA generic entrants in North America, Brazil and certain E.U. countries. • Global Interferon revenue decreased $199.7 million, from $1,305.4 million in 2022 to $1,105.7 million in 2023, or 15.3%, driven by a decrease in sales volumes as patients transition to higher efficacy therapies. • Global VUMERITY revenue increased $22.9 million, from $553.4 million in 2022 to $576.3 million in 2023, or 4.1%, primarily due to an increase in global demand, partially offset by higher discounts and allowances in the U.S. driven by a favorable Medicaid-related sales adjustment in the first quarter of 2022. • Global TYSABRI revenue decreased $154.0 million, from $2,030.9 million in 2022 to $1,876.9 million in 2023, or 7.6%, primarily due to a decrease in U.S.
For the year ended December 31, 2022, amortization and impairment of acquired intangible assets reflects the impact of a $119.6 million impairment charge related to vixotrigi ne for the potential treatment of DPN.
For the year ended December 31, 2022 , amortization and impairment of acquired intangible assets reflects the impact of a $119.6 million impairment charge related to vixotrigi ne (BIIB074) for the potential treatment of DPN.
Other (Income) Expense, Net For 2022 compared to 2021, the change in other (income) expense, net primarily reflects a pre-tax gain during 2022 of approximately $1.5 billion related to the sale of our 49.9% equity interest in Samsung Bioepis, partially offset by a pre-tax charge of $900.0 million, plus settlement fees and expenses, related to a litigation settlement agreement to resolve a qui tam litigation relating to conduct prior to 2015.
OTHER (INCOME) EXPENSE, NET For 2023 compared to 2022, the change in other (income) expense, net primarily reflects a pre-tax gain recorded during 2022 of approximately $1.5 billion related to the sale of our 49.9% equity interest in Samsung Bioepis, partially offset by a pre-tax charge recorded during 2022 of approximately $900.0 million, plus settlement fees and expenses, related to a litigation settlement agreement to resolve a qui tam litigation relating to conduct prior to 2015.
Royalty Revenue on Sales of OCREVUS For 2022 compared to 2021, the increase in royalty revenue on sales of OCREVUS was primarily due to sales growth of OCREVUS in the U.S. OCREVUS royalty revenue is based on our estimates from third party and market research data of OCREVUS sales occurring during the corresponding period.
ROYALTY REVENUE ON SALES OF OCREVUS For 2023 compared to 2022, the increase in royalty revenue on sales of OCREVUS was primarily due to sales growth of OCREVUS in the U.S. OCREVUS royalty revenue is based on our estimates from third party and market research data of OCREVUS sales occurring during the corresponding period.
For additional information on our collaboration arrangements with Samsung Bioepis, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report. Noncontrolling Interests, Net of Tax Our consolidated financial statements include the financial results of our variable interest entity, Neurimmune, as we determined that we are the primary beneficiary.
For additional information on our collaboration arrangements with Samsung Bioepis, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report. NONCONTROLLING INTERESTS, NET OF TAX Our consolidated financial statements include the financial results of a variable interest entity, Neurimmune, as we determined that we were the primary beneficiary.
Beginning January 1, 2023, Eisai receives only a tiered royalty based on net sales of ADUHELM, and will no longer share global profits and losses. For the years ended December 31, 2022 and 2021, we recognized net profit-sharing expense of $217.4 million and $285.4 million, respectively, to reflect Samsung Bioepis’ 50.0% sharing of the net collaboration profits.
Beginning January 1, 2023, Eisai receives only a tiered royalty based on net sales of ADUHELM, and will no longer share global profits and losses. For the years ended December 31, 2023 and 2022, we recognized net profit-sharing expense of $223.5 million and $217.4 million, respectively, to reflect Samsung Bioepis' 50.0% sharing of the net collaboration profits.
Simultaneously, with the close of this transaction we leased back the building for a term of approximately 5.5 years, which resulted in the recognition of approximately $168.2 million in new lease liabilities and right-of-use assets recorded within our consolidated balance sheets as of December 31, 2022.
Simultaneously, with the close of this transaction we leased back the building for a term of approximately 5.5 years, which resulted in the recognition of approximately $168.2 million in a new lease liability and right-of-use asset recorded within our consolidated balance sheets as of December 31, 2022.
Contractual Adjustments Contractual adjustments primarily relate to Medicaid and managed care rebates in the U.S., pharmacy rebates, co-payment (copay) assistance, Veterans Administration, 340B discounts, specialty pharmacy program fees and other government rebates or applicable allowances.
CONTRACTUAL ADJUSTMENTS Contractual adjustments primarily relate to Medicaid and managed care rebates in the U.S., pharmacy rebates, co-payment (copay) assistance, VA, 340B discounts, specialty pharmacy program fees and other government rebates or applicable allowances.
These savings are being achieved through a number of initiatives, including reductions to our workforce, the substantial elimination of our commercial ADUHELM infrastructure, the consolidation of certain real estate locations and operating efficiency gains across our selling, general and administrative and research and development functions.
These savings are being achieved through a number of initiatives, including reductions to our workforce, the substantial elimination of our commercial ADUHELM infrastructure, deprioritization of certain research and development programs, the consolidation of certain real estate locations and operating efficiencies across our selling, general and administrative and research and development functions.
Milestone and Upfront Expense Research and development expense for 2022 includes: • $37.0 million in charges to research and development expense in connection with milestone payments to Ionis; • $15.0 million charge to research and development expense in connection with the upfront payment associated with entering into our collaboration with Alectos in the second quarter of 2022; and • $10.0 million charge to research and development expense in connection with the upfront payment associated with entering into 61 Table of Conten ts our collaboration with Alcyone in the fourth quarter of 2022.
Research and development expense for 2022 includes: • $37.0 million in charges to research and development expense in connection with milestone payments to Ionis; • $15.0 million charge to research and development expense in connection with the upfront payment associated with entering into our collaboration with Alectos Therapeutics Inc. in the second quarter of 2022; and • $10.0 million charge to research and development expense in connection with the upfront payment associated with entering into our collaboration with Alcyone Therapeutics in the fourth quarter of 2022.
For additional information on our collaboration agreement with Neurimmune, please read Note 20, Investments in Variable Interest Entities, to our consolidated financial statements included in this report.
For additional information on the valuation allowance, deconsolidation and our collaboration agreement with Neurimmune, please read Note 20, Investments in Variable Interest Entities, to our consolidated financial statements included in this report.
We expect additional guidance and regulations to be issued in future periods and will continue to assess its potential impact on our business and results of operations as further information becomes available. The IRA also contains substantial drug pricing reforms that may have a significant impact on the pharmaceutical industry in the U.S.
We will continue to assess its potential impact on our business and results of operations as further information becomes available. The IRA also contains substantial drug pricing reforms that may have a significant impact on the pharmaceutical industry in the U.S.
For the years ended December 31, 2022 and 2021 we recognized net reductions to our operating expense of approximately $224.7 million and $233.2 million, respectively, to reflect Eisai's 45.0% share of net collaboration losses in the U.S.
For the year ended December 31, 2022, we recognized net reductions to our operating expense of approximately $224.7 million to reflect Eisai's 45.0% share of net collaboration losses in the U.S. for ADUHELM.
We have also recognized approximately $197.0 million and $99.0 million related to Eisai's 45.0% share of inventory, idle capacity charges and contractual commitments, which was recorded in collaboration profit (loss) sharing within our consolidated statements of income for the years ended December 31, 2022 and 2021, respectively.
We also recognized approximately $197.0 million related to Eisai's 45.0% share of inventory, idle capacity charges and contractual commitments in collaboration profit sharing/(loss reimbursement) within our consolidated statements of income for the year ended December 31, 2022.
For additional information on our collaboration arrangements with Samsung Bioepis and Eisai, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. For additional information on our collaboration arrangements with Eisai, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
For additional information on our income taxes, uncertain tax positions and income tax rate reconciliation, please read Note 17, Income Taxes , to our consolidated financial statements included in this report.
For additional information on the litigation settlement agreement, please read Note 18, Other Consolidated Financial Statement Detail , to our consolidated financial statements included in this report. For additional information on our income taxes, uncertain tax positions and income tax rate reconciliation, please read Note 17, Income Taxes , to our consolidated financial statements included in this report.
Biogen’s Share of Pre-tax Profits in the U.S. for RITUXAN and GAZYVA The following table provides a summary of amounts comprising our share of pre-tax profits in the U.S. for RITUXAN and GAZYVA: For the Years Ended December 31, (In millions) 2022 2021 2020 Product revenue, net $ 1,729.2 $ 2,032.0 $ 3,334.1 Cost and expense 253.6 291.8 433.0 Pre-tax profits in the U.S. $ 1,475.6 $ 1,740.2 $ 2,901.1 Biogen's share of pre-tax profits $ 547.0 $ 647.7 $ 1,080.2 For 2022 compared to 2021, the decrease in U.S. product revenue, net was primarily due to a decrease in sales volumes of RITUXAN in the U.S. of 28.4%, primarily due to the onset of competition from multiple biosimilar products.
FOR RITUXAN, GAZYVA AND LUNSUMIO The following table provides a summary of amounts comprising our share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO: For the Years Ended December 31, (In millions) 2023 2022 2021 Product revenue, net $ 1,581.3 $ 1,729.2 $ 2,032.0 Cost and expense 419.9 253.6 291.8 Pre-tax profits in the U.S. $ 1,161.4 $ 1,475.6 $ 1,740.2 Biogen's share of pre-tax profits $ 409.4 $ 547.0 $ 647.7 For 2023 compared to 2022, the decrease in U.S. product revenue, net was primarily due to a decrease in sales volumes of RITUXAN in the U.S. of 15.2%, resulting from competition from multiple biosimilar products, partially offset by an increase in sales volumes of GAZYVA of 17.9%.
This sale resulted in a pre-tax gain on sale of approximately $503.7 million, net of transaction costs, for the year ended December 31, 2022.
This sale resulted in a pre-tax gain on sale of approximately $503.7 million, net of transaction costs, which is reflected within gain on sale of building in our consolidated statements of income for the year ended December 31, 2022.
The decrease was partially offset by an increase in costs associated with: • the advancement of litifilimab (BIIB059) for the potential treatment of SLE into late stage; • the advancement of BIIB122 for the potential treatment of Parkinson's disease into late stage; and • the advancement of BIIB800, a proposed tocilizumab biosimilar referencing ACTEMRA, into late stage.
The decrease was partially offset by an increase in costs associated with: • development of litifilimab for the treatment of SLE into late stage; and • development of TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA.
For additional information on our collaboration arrangements with Genentech, including information regarding the pre-tax profit-sharing formula and its impact on future revenue from anti-CD20 therapeutic programs, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report. 57 Table of Conten ts Other Revenue Other revenue consists of royalty revenue and contract manufacturing and other revenue and is summarized as follows: Royalty Revenue and Contract Manufacturing and Other Revenue Contract Manufacturing and Other Revenue We record contract manufacturing and other revenue primarily from amounts earned under contract manufacturing agreements.
For additional information on our collaboration arrangements with Genentech, including information regarding the pre-tax profit-sharing formula and its impact on future revenue from anti-CD20 therapeutic programs, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
Differences between actual and estimated royalty revenue will be adjusted for in the period in which they become known, which is generally expected to be the following quarter. Other Revenue from Anti-CD20 Therapeutic Programs Other revenue from anti-CD20 therapeutic programs consists of our share of pre-tax co-promotion profits from RITUXAN in Canada.
Differences between actual and estimated royalty revenue will be adjusted for in the period in which they become known, which is generally expected to be the following quarter. BIOGEN'S SHARE OF PRE-TAX PROFITS IN THE US.
The IRA introduced new tax provisions, including a 15.0% corporate alternative minimum tax and a 1.0% excise tax on stock repurchases. The provisions of the IRA will be effective for periods after December 31, 2022.
INFLATION REDUCTION ACT OF 2022 In August 2022 the IRA was signed into law in the U.S. The IRA introduced new tax provisions, including a 15.0% corporate alternative minimum tax and a 1.0% excise tax on stock repurchases. The provisions of the IRA are effective for periods after December 31, 2022.
Excluding upfront payments, we expect our core research and development expense to modestly increase in 2023, as we continue to invest in our pipeline. We intend to continue committing significant resources to targeted research and development opportunities where there is a significant unmet need and where a drug candidate has the potential to be highly differentiated.
We intend to continue committing significant resources to targeted research and development opportunities where there is a significant unmet need and where a drug candidate has the potential to be highly differentiated.
For additional information on the redemption of our Senior Notes, please read Note 13, Indebtedness , to our consolidated financial statements included in this report. 125 Broadway Sale and Leaseback Transaction In September 2022 we completed the sale of our building and land parcel located at 125 Broadway for an aggregate sales price of approximately $603.0 million, which is inclusive of a $10.8 million tenant allowance.
GAIN ON SALE OF BUILDING In September 2022 we completed the sale of our building and land parcel located at 125 Broadway for an aggregate sales price of approximately $603.0 million, which is inclusive of a $10.8 million tenant allowance.
These estimates reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.
These estimates reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Actual amounts may ultimately differ from our estimates.
For additional information on the litigation settlement agreement, please read Note 18, Other Consolidated Financial Statement Detail , to our consolidated financial statements included in this report. For additional information on certain risks that could negatively impact our financial position or future results of operations, please read Item 1A. R isk Factors and
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. 82 T able of Contents For additional information on certain risks that could negatively impact our financial position or future results of operations, please read Item 1A. Risk Factors and
For 2022 compared to 2021, the 9.4% decrease in rest of world SPINRAZA revenue was primarily due to country mix, the unfavorable impact of foreign currency exchange and the timing of shipments, partially offset by an increase in sales volumes.
The increase was partially offset by a decrease in rest of world SPINRAZA revenue primarily due to the unfavorable impact of foreign currency exchange, increased competition, a decrease in pricing and the timing of shipments.
For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to our consolidated financial statements included in this report. For additional information on the redemption of our Senior Notes, please read Note 13, Indebtedness , to our consolidated financial statements included in this report.
For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to our consolidated financial statements included in this report. 80 T able of Contents For additional information on the litigation settlement agreement, please read Note 18, Other Consolidated Financial Statement Detail , to our consolidated financial statements included in this report.
(Gain) Loss on Fair Value Remeasurement of Contingent Consideration For the year ended December 31, 2022, the changes in fair value of our contingent consideration obligations were primarily due to the discontinuation of further development efforts related to vixotrigine for the potential treatment of TGN and DPN, resulting in a reduction of our contingent consideration obligations of approximatel y $195.4 million, and changes in the interest rates used to revalue our contingent consideration liabilities.
For additional information on our collaboration and license arrangements with Samsung Bioepis, Sage and Eisai, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report. 78 T able of Contents (GAIN) LOSS ON FAIR VALUE REMEASUREMENT OF CONTINGENT CONSIDERATION For the year ended December 31, 2022, the changes in fair value of our contingent consideration obligations were primarily due to the discontinuation of further development efforts related to vixotrigine for the potential treatment of TGN and DPN, resulting in a reduction of our contingent consideration obligations of approximatel y $195.4 million, reducing the remaining fair value of vixotrigine to zero, as well as changes in the interest rates used to revalue our contingent consideration liabilities.
We may, from time to time, also seek additional funding through a combination of new collaborative agreements, strategic alliances and additional equity and debt financings or from other 71 Table of Conten ts sources should we identify a significant new opportunity .
In addition, we may choose to opportunistically return cash to shareholders and pursue other business initiatives, including acquisition and licensing activities. We may also seek additional funding through a combination of new collaborative agreements, strategic alliances and additional equity and debt financings or from other sources should we identify a significant new opportunity.
Revenue from Anti-CD20 Therapeutic Programs Genentech (Roche Group) Our share of RITUXAN, including RITUXAN HYCELA, and GAZYVA collaboration operating profits in the U.S., royalty revenue on sales of OCREVUS and other revenue from anti-CD20 therapeutic programs are summarized in the table below. For purposes of this discussion, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.
In February 2023 we announced that we are exploring strategic options for our biosimilars business. 70 T able of Contents REVENUE FROM ANTI-CD20 THERAPEUTIC PROGRAMS Our share of RITUXAN, including RITUXAN HYCELA, GAZYVA and LUNSUMIO collaboration operating profits in the U.S., royalty revenue on sales of OCREVUS and other revenue from anti-CD20 therapeutic programs are summarized in the table below.
Late Stage Programs For 2022 compared to 2021, the decrease in spending associated with our late stage programs was primarily due to a decrease in costs associated with: • the advancement of ADUHELM from late stage to marketed upon the accelerated approval of ADUHELM in the U.S.; and • the discontinuation of BIIB111 in choroideremia.
LATE STAGE PROGRAMS 2023 vs. 2022 The decrease in late stage programs was driven by a decrease in costs associated with: • advancement of LEQEMBI from late stage to marketed upon the accelerated approval of LEQEMBI in the U.S.; • advancement of ZURZUVAE from late stage to marketed upon the approval of ZURZUVAE for PPD in the U.S.; • advancement of QALSODY from late stage to marketed upon the accelerated approval of QALSODY in the U.S.; and • advancement of LUNSUMIO from late stage to marketed upon the accelerated approval of LUNSUMIO in the U.S.
Amortization and Impairment of Acquired Intangible Assets Our amortization expense is based on the economic consumption and impairment of intangible assets. Our most significant amortizable intangible assets are related to our TYSABRI, AVONEX, SPINRAZA, VUMERITY and TECFIDERA (rest of world) products and other programs acquired through business combinations.
AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS Our amortization expense is based on the economic consumption and impairment of intangible assets. Our most significant amortizable intangible assets are related to TYSABRI, AVONEX, SPINRAZA, VUMERITY and SKYCLARYS, which was obtained as part of our acquisition of Reata in September 2023.
This amount reflects our share of results prior to the sale of Samsung Bioepis as the results are recognized one quarter in arrears.
This amount reflects our share of results prior to the sale of Samsung Bioepis as the results are recognized one quarter in arrears. For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to our consolidated financial statements included in this report.
We anticipate modest growth in revenue from our biosimilars business in 2023, compared to 2022, driven by the continued launch of BYOOVIZ in the U.S. and rest of world, offset in part by continued price reductions in certain markets.
During the third quarter of 2023 the FDA approved TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA, which we expect to become commercially available during 2024. In 2024 we anticipate modest growth in revenue from our biosimilars business driven by the continued launch of BYOOVIZ in the U.S. and rest of world, offset in part by lower pricing in certain markets.
Cost and Expense A summary of total cost and expense is as follows: For the Years Ended December 31, % Change $ Change 2022 vs. 2021 2021 vs. 2020 2022 vs. 2021 2021 vs. 2020 (In millions, except percentages) 2022 2021 2020 Cost of sales, excluding amortization and impairment of acquired intangible assets $ 2,278.3 $ 2,109.7 $ 1,805.2 8.0 % 16.9 % $ 168.6 $ 304.5 Research and development 2,231.1 2,501.2 3,990.9 (10.8) (37.3) (270.1) (1,489.7) Selling, general and administrative 2,403.6 2,674.3 2,504.5 (10.1) 6.8 (270.7) 169.8 Amortization and impairment of acquired intangible assets 365.9 881.3 464.8 (58.5) 89.6 (515.4) 416.5 Collaboration profit (loss) sharing (7.4) 7.2 232.9 (202.8) (96.9) (14.6) (225.7) (Gain) loss on divestiture of Hillerød, Denmark manufacturing operations — — (92.5) — nm — 92.5 (Gain) loss on fair value remeasurement of contingent consideration (209.1) (50.7) (86.3) 312.4 (41.3) (158.4) 35.6 Acquired in-process research and development — 18.0 75.0 (100.0) (76.0) (18.0) (57.0) Restructuring charges 131.1 — — nm — 131.1 — Gain on sale of building (503.7) — — nm — (503.7) — Other (income) expense, net (108.2) 1,095.5 (497.4) (109.9) (320.2) (1,203.7) 1,592.9 Total cost and expense $ 6,581.6 $ 9,236.5 $ 8,397.1 (28.7) % 10.0 % $ (2,654.9) $ 839.4 nm Not meaningful 59 Table of Conten ts Cost of Sales, Excluding Amortization and Impairment of Acquired Intangible Assets Cost of sales, as a percentage of total revenue, were 22.4%, 19.2% and 13.4% for the years ended December 31, 2022, 2021 and 2020, respectively.
For additional information on our revenue reserves, please read Note 5, Revenue, to our consolidated financial statements included in this report. 73 T able of Contents COST AND EXPENSE A summary of total cost and expense is as follows: For the Years Ended December 31, % Change $ Change 2023 vs. 2022 2022 vs. 2021 2023 vs. 2022 2022 vs. 2021 (In millions, except percentages) 2023 2022 2021 Cost of sales, excluding amortization and impairment of acquired intangible assets $ 2,533.4 $ 2,278.3 $ 2,109.7 11.2 % 8.0 % $ 255.1 $ 168.6 Research and development 2,462.0 2,231.1 2,501.2 10.3 (10.8) 230.9 (270.1) Selling, general and administrative 2,549.7 2,403.6 2,674.3 6.1 (10.1) 146.1 (270.7) Amortization and impairment of acquired intangible assets 240.6 365.9 881.3 (34.2) (58.5) (125.3) (515.4) Collaboration profit sharing/(loss reimbursement) 218.8 (7.4) 7.2 nm (202.8) 226.2 (14.6) (Gain) loss on fair value remeasurement of contingent consideration — (209.1) (50.7) nm 312.4 209.1 (158.4) Acquired in-process research and development — — 18.0 — nm — (18.0) Restructuring charges 218.8 131.1 — 66.9 nm 87.7 131.1 Gain on sale of building — (503.7) — nm nm 503.7 (503.7) Other (income) expense, net 315.5 (108.2) 1,095.5 (391.6) (109.9) 423.7 (1,203.7) Total cost and expense $ 8,538.8 $ 6,581.6 $ 9,236.5 29.7 % (28.7) % $ 1,957.2 $ (2,654.9) nm Not meaningful COST OF SALES, EXCLUDING AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS For the Years Ended December 31, (In millions) 2023 2022 2021 Product $ 1,787.2 $ 1,504.8 $ 1,281.2 Royalty 746.2 773.5 828.5 Total cost of sales $ 2,533.4 $ 2,278.3 $ 2,109.7 Cost of sales, as a percentage of total revenue, were 25.8%, 22.4% and 19.2% for the years ended December 31, 2023, 2022 and 2021, respectively.
Therefore, the same program could be reflected in different development stages in the same year. For several of our programs, the research and development activities are part of our collaborative and other relationships. Our costs reflect our share of the total costs incurred.
These costs are considered other research and development costs in the table above and are not allocated to a specific program or stage. For several of our programs, the research and development activities are part of our collaborative and other relationships. Our costs reflect our share of the total costs incurred.
For 2022 compared to 2021, the decrease in contract manufacturing and other revenue was primarily due to lower contract manufacturing revenue related to the timing of batch releases. Royalty Revenue We receive royalties from net sales on products related to patents that we have out-licensed, as well as royalty revenue on biosimilar products from our collaboration arrangements with Samsung Bioepis.
ROYALTY AND OTHER REVENUE Royalty and other revenue primarily reflects the royalties we receive from net sales on products related to patents that we have out-licensed, as well as royalty revenue on biosimilar products from our license arrangements with Samsung Bioepis and our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties, as we are not the principal.
The net unrealized losses recognized during the year ended December 31, 2022, primarily reflect a decrease in the aggregate fair value of our investments in Denali and Sangamo common stock of approximately $278.0 million.
NET (GAINS) LOSSES IN EQUITY SECURITIES For the year ended December 31, 2023, net unrealized and realized losses on our holdings in equity securities were approximately $270.0 million and $5.2 million, respectively, compared to net unrealized losses and realized (gains) losses of approximately $264.7 million and zero, respectively, in 2022. • The net unrealized losses recognized during the year ended December 31, 2023, primarily reflect a decrease in the aggregate fair value of our investments in Sage, Denali, Sangamo and Ionis common stock of approximately $248.5 million. • The net unrealized losses recognized during the year ended December 31, 2022, primarily reflect a decrease in the aggregate fair value of our investments in Denali and Sangamo common stock of approximately $278.0 million, partially offset by an increase in the fair value of Ionis and Sage common stock of approximately $27.3 million.
We expect that biosimilar competition will continue to increase as these products capture additional market share and that this will have a significant adverse impact on our co-promotion profits in the U.S. in future years.
We expect that biosimilar competition will continue to increase as these products capture additional market share and that this will have a significant adverse impact on our co-promotion profits in the U.S. in future years. 71 T able of Contents OTHER REVENUE FROM ANTI-CD20 THERAPEUTIC PROGRAMS Other revenue from anti-CD20 therapeutic programs consists of our share of pre-tax co-promotion profits from RITUXAN in Canada, royalty revenue on sales of LUNSUMIO outside the U.S. and royalty revenue on net sales of COLUMVI in the U.S, which became commercially available during the second quarter of 2023.
For additional information on our income taxes please read Note 17, Income Taxes , to our consolidated financial statements included in this report. 70 Table of Conten ts FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Our financial condition is summarized as follows: As of December 31, (In millions, except percentages) 2022 2021 % Change $ Change Financial assets: Cash and cash equivalents $ 3,419.3 $ 2,261.4 51.2 % $ 1,157.9 Marketable securities — current 1,473.5 1,541.1 (4.4) (67.6) Marketable securities — non-current 705.7 892.0 (20.9) (186.3) Total cash, cash equivalents and marketable securities $ 5,598.5 $ 4,694.5 19.3 % $ 904.0 Borrowings: Current portion of notes payable $ — $ 999.1 nm $ (999.1) Notes payable 6,281.0 6,274.0 0.1 7.0 Total borrowings $ 6,281.0 $ 7,273.1 (13.6) % $ (992.1) Working Capital: Current assets $ 9,791.2 $ 7,856.5 24.6 % $ 1,934.7 Current liabilities (3,272.8) (4,298.2) (23.9) 1,025.4 Total working capital $ 6,518.4 $ 3,558.3 83.2 % $ 2,960.1 nm Not meaningful Overview We have historically financed and expect to continue to fund our operating and capital expenditures primarily through cash flow earned through our operations as well as our existing cash resources.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Our financial condition is summarized as follows: As of December 31, (In millions, except percentages) 2023 2022 % Change $ Change Financial assets: Cash and cash equivalents $ 1,049.9 $ 3,419.3 (69.3) % $ (2,369.4) Marketable securities — current — 1,473.5 nm (1,473.5) Marketable securities — non-current — 705.7 nm (705.7) Total cash, cash equivalents and marketable securities $ 1,049.9 $ 5,598.5 (81.2) % $ (4,548.6) Borrowings: Current portion of term loan $ 150.0 $ — nm $ 150.0 Notes payable and term loan 6,788.2 6,281.0 8.1 507.2 Total borrowings $ 6,938.2 $ 6,281.0 10.5 % $ 657.2 Working Capital: Current assets $ 6,859.3 $ 9,791.2 (29.9) % $ (2,931.9) Current liabilities (3,434.3) (3,272.8) 4.9 (161.5) Total working capital $ 3,425.0 $ 6,518.4 (47.5) % $ (3,093.4) nm Not meaningful OVERVIEW We have historically financed and expect to continue to fund our operating and capital expenditures primarily through cash flow earned through our operations, as well as our existing cash resources.
Product Cost of Sales For 2022 compared to 2021, the increase in product cost of sales was primarily due to higher charges in 2022 associated with the write-off of excess ADUHELM inventory and purchase commitments, higher gross idle capacity charges associated with our manufacturing facilities and increased product cost of sales driven by product mix.
PRODUCT COST OF SALES For 2023 compared to 2022, the increase in product cost of sales was primarily due to unfavorable product mix from increased contract manufacturing revenue, MS product mix and higher idle capacity charges, partially offset by a decrease in excess and obsolescence inventory charges in 2023.
This resulted in a gain of approximately $5.3 million, which was recorded within restructuring charges in our consolidated statements of income for the year ended December 31, 2022 . For additional information on our 300 Binney Street lease modification, please read Note 12, Leases , to these consolidated financial statements included in this report.
For additional information on our 300 Binney Street lease modification, please read Note 12, Leases , to these consolidated financial statements. For additional information on our cost saving initiatives, please read Note 4, Restructuring, to our consolidated financial statements included in this report.
For additional information on our collaboration arrangements with Genentech, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.
For the years ended December 31, 2023 and 2022, we recorded approximately $165.2 million and $119.0 million, respectively, of aggregate gross idle capacity charges. For additional information on our collaboration arrangements with Eisai, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.
We expect that Interferon revenue will continue to decline in both the U.S. and rest of world markets in 2023, compared to 2022, as a result of increasing competition from other MS products. TYSABRI For 2022 compared to 2021, U.S.
TYSABRI revenue driven by a decrease in demand, higher discounts and unfavorable channel dynamics. MS revenue includes sales from TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA. In 2024 we expect total MS revenue will continue to decline as a result of increasing competition for many of our MS products in both the U.S. and rest of world markets.
Inventory amounts written down as a result of excess, obsolescence or unmarketability totaled $336.2 million, $167.6 million and $26.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Write Downs and Other Charges Inventory amounts written down as a result of excess, obsolescence or unmarketability totaled $124.4 million, $336.2 million and $167.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. 74 T able of Contents For the year ended December 31, 2022, we recorded approximately $286.0 million of charges associated with the write-off of ADUHELM inventory and contractual commitments in excess of forecasted demand.
For the year ended December 31, 2022, we recognized approximately $131.1 million of net pre-tax restructuring charges related to our 2022 cost saving initiatives, of which approximately $112.6 million consisted of employee severance costs. Our restructuring reserve is included in accrued expense and other in our consolidated balance sheets.
For the year ended December 31, 2023, we recognized approximately $30.4 million of net pre-tax restructuring charges related to employee severance costs. 2022 COST SAVING INITIATIVES In December 2021 and May 2022 we announced our plans to implement a series of cost-reduction measures during 2022.
We believe generic competition for TECFIDERA in the U.S. and other key markets and the impact of biosimilar competition on RITUXAN sales volumes will continue to reduce our cash flow from operations in 2023 and will have a significant adverse impact on our future cash flow from operations.
We believe that generic and biosimilar competition for many of our key products, the continued overall decline of our MS business and our investments in the launch of key new products and the development of our pipeline will have a significant adverse impact on our future cash flow from operations.
For 2022 compared to 2021, the decrease in amortization and impairment of acquired intangible assets was primarily due to higher impairment charges in 2021 of approximately $629.3 million, compared to impairment charges of approximately $119.6 million in 2022.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. For 2023 compared to 2022, the decrease i n amortization and impairment of acquired intangible assets was primarily due to higher impairment charges in 2022 of approximately $119.6 million, compared to no impairment charges in 2023.
For the year ended December 31, 2021, we also recognized net reductions to our operating expense of $45.0 million to reflect Eisai's 45.0% share of the $100.0 million milestone payment made to Neurimmune related to the launch of ADUHELM in the U.S. during the second quarter of 2021.
For the year ended December 31, 2023, we recognized net reductions to our operating expense of approximately $4.7 million to reflect Sage's 50.0% share of net collaboration losses in the U.S.
For 2023 compared to 2022, we anticipate a decrease in net interest expense as a result of lower average debt balances in 2023 and an increase in 67 Table of Conten ts interest income driven by higher interest rates on our cash and marketable securities.
For 2024 compared to 2023, we anticipate an increase in net interest expense as a result of lower cash balances leading to lower interest income due to the funding of our acquisition of Reata.
Biosimilars BENEPALI, IMRALDI, FLIXABI and BYOOVIZ During the third quarter of 2021 BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, was approved in the U.S., the E.U and the U.K. BYOOVIZ launched in the U.S. in June 2022 and became commercially available in July 2022 through major distributors in the U.S.
Biosimilars revenue includes sales from BENEPALI, IMRALDI, FLIXABI and BYOOVIZ. BYOOVIZ launched in the U.S. in June 2022 and became commercially available in July 2022 through major distributors in the U.S. In 2023 BYOOVIZ became commercially available in certain international markets.
In accordance with contractual terms, wholesalers are permitted to return product for reasons such as damaged or expired product. The majority of wholesaler returns are due to product expiration. Provisions for product returns are recognized in the period the related revenue is recognized, resulting in a reduction to product sales. For 2022 compared to 2021, return reserves were relatively consistent.
The majority of wholesaler returns are due to product expiration. Provisions for estimated product returns are recognized in the period the related revenue is recognized, resulting in a reduction to product sales. For 2023 compared to 2022, the increase in returns was primarily driven by higher return rates in the U.S.
The provisions of the IRA will be effective for periods after December 31, 2022. The enactment of the IRA did not result in any material adjustments to our income tax provision or net deferred tax assets as of December 31, 2022.
The IRA did not result in any material adjustments to our income tax provision or other income tax balances as of December 31, 2023 and 2022. Preliminary guidance has been issued by the IRS and we expect additional guidance and regulations to be issued in future periods.
A significant amount of our research and development costs consist of indirect costs incurred in support of overall research and development activities and non-specific programs, including activities that benefit multiple programs, such as management costs, as well as depreciation, information technology and facility-based expenses.
Therefore, the same program could be reflected in different development stages in the same year. • Research and discovery: represents costs incurred to support our discovery research and translational science efforts. • Early stage programs: are programs in Phase 1 or Phase 2 development. • Late stage programs: are programs in Phase 3 development or in registration stage. • Marketed products: includes costs associated with product lifecycle management activities including, if applicable, costs associated with the development of new indications for existing products. • Other research and development costs: A significant amount of our research and development costs consist of indirect costs incurred in support of overall research and development activities and non-specific programs, including activities that benefit multiple programs, such as management costs, as well as depreciation, information technology and facility-based expenses.
Collaboration Profit (Loss) Sharing Collaboration profit (loss) sharing primarily includes Samsung Bioepis' 50.0% share of the profit or loss related to our biosimilars 2013 commercial agreement with Samsung Bioepis and, beginning in the second quarter of 2021, Eisai's 45.0% share of income and expense in the U.S. related to the ADUHELM Collaboration Agreement.
In the third quarter of 2023 we began recognizing collaboration profit sharing/(loss reimbursement) related to Sage's 50.0% share of income and expense in the U.S. related to ZURZUVAE for PPD. During 2022 we recognized Eisai's 45.0% share of income and expense in the U.S. related to the ADUHELM Collaboration Agreement.
The decrease was partially offset by an increase in costs associated with: • an increase in spending in the development of BIIB124 for the potential treatment of essential tremor; • an increase in spending in the development of litifilimab (BIIB059) for the potential treatment of CLE; • an increase in spending in the development of BIIB113 for the potential treatment of Alzheimer's disease; • an increase in spending in the development of BIIB131 for the potential treatment of acute ischemic stroke; and • an increase in spending in the development of BIIB121 for the potential treatment of Angelman syndrome.
EARLY STAGE PROGRAMS 2023 vs. 2022 The increase in early stage programs was driven by an increase in costs associated with: • development of BIIB121 for the treatment of Angelman syndrome; • development of litifilimab for the treatment of CLE; • development of BIIB115 for the treatment of SMA; • development of BIIB091 for the treatment of MS; and • development of BIIB080 for the treatment of Alzheimer's disease.
For the year ended December 31, 2021, amortization and impairment of acquired intangible assets reflects the impact of a $365.0 million impairment charge related to BIIB111, a $220.0 million impairment charge related to BIIB112 and a $44.3 million impairment charge related to vixotrigine for the potential treatment of TGN. 63 Table of Conten ts Amortization of acquired intangible assets, excluding impairment charges, totaled $246.3 million, $252.0 million and $255.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Amortization of acquired intangible assets, excluding impairment charges, totaled $240.6 million, $246.3 million and $252.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. The decrease in amortization of acquired intangible assets, excluding impairment charges, over the three years was primarily due to a lower rate of amortization for acquired intangible assets.
We are currently working with our contract manufacturer for IMRALDI to address facility regulatory inspection deficiencies at two filling locations, which could impact supply and have an adverse impact on 2023 IMRALDI sales, if not resolved. Manufacturing of BENEPALI also utilizes one of these facilities and therefore could have an adverse impact on 2023 BENEPALI sales.
We continue to work with our third-party contract manufacturers for IMRALDI and BENEPALI to address supply constraints. If not resolved these supply constraints could have an adverse impact on 2024 sales.
The net unrealized losses recognized during the year ended December 31, 2021, primarily reflect decreases in the aggregate fair value of our investments in Denali, Sage, Sangamo and Ionis common stock of approximately $819.6 million. For the year ended December 31, 2022, net interest expense was $157.3 million, compared to $242.6 million in 2021.
INTEREST INCOME AND EXPENSE For the year ended December 31, 2023, net interest income was $29.6 million, compared to net interest expense of $157.3 million in 2022. The increase was primarily due to higher interest rates leading to greater interest income earned on our investments in 2023, compared to 2022.
For 2022 compared to 2021, the 9.6% decrease in biosimilar revenue was primarily due to unfavorable pricing and the unfavorable impact of foreign currency exchange, partially offset by an increase in sales volumes.
We expect moderate growth in SPINRAZA in the U.S. as well as continued access expansion in emerging markets to offset increased competition and the impact of loading dose dynamics. 69 T able of Contents BIOSIMILARS • For 2023 compared to 2022, the increase in biosimilar revenue was primarily due to an increase in sales volumes related to the continued launch of BYOOVIZ in the U.S. and rest of world, partially offset by unfavorable BYOOVIZ pricing and the unfavorable impact of foreign currency exchange.
For 2022 compared to 2021, the decrease in contractual adjustments was primarily driven by lower TECFIDERA sales in the U.S., resulting in lower pharmacy rebates, Medicaid rebates and managed care rebates, as well as lower Medicaid rebates in the U.S. driven by a favorable change in estimates for VUMERITY. Returns Product return reserves are established for returns made by wholesalers.
For 2023 compared to 2022, the decrease in contractual adjustments was primarily due to lower government rebates in the U.S. as a result of a contract pharmacy change made during the first quarter of 2023 related to our Interferons, partially offset by higher managed care and Medicaid rebates in the U.S. and higher government rebates in rest of world.
We are awaiting the decision of the CJEU. For additional information, please read Note 21, Litigation, to our consolidated financial statements included in this report. We expect that TECFIDERA revenue will continue to decline in 2023, compared to 2022, as a result of generic competition in the North America, Latin America and certain E.U. countries.
Item 1A. Risk Factors, included in this report. TECFIDERA Multiple TECFIDERA generic entrants are now in North America, Brazil and certain E.U. countries and have deeply discounted prices compared to TECFIDERA. The generic competition for TECFIDERA has significantly reduced our TECFIDERA revenue and we expect that TECFIDERA revenue will continue to decline in the future.
For additional information on our IPR&D intangible assets, please read Note 7, Intangible Assets and Goodwill , to our consolidated financial statements included in this report. 65 Table of Conten ts Restructuring Charges 2022 Cost Saving Initiatives In December 2021 and May 2022 we announced our plans to implement a series of cost-reduction measures that when completed we expect may yield approximately $1.0 billion in expense savings.
For additional information on our IPR&D intangible assets, please read Note 7, Intangible Assets and Goodwill , to our consolidated financial statements included in this report. RESTRUCTURING CHARGES 2023 FIT FOR GROWTH RESTRUCTURING PROGRAM In 2023 we initiated additional cost saving measures as part of our Fit for Growth program to reduce operating costs, while improving operating efficiency and effectiveness.
During the first quarter of 2022, upon issuance of the final NCD related to ADUHELM, we recorded an increase in a valuation allowance of approximately $85.0 million to reduce the net value of this deferred tax asset to zero.
For 2023 compared to 2022, the change in net income (loss) attributable to noncontrolling interests, net of tax, was primarily due to an increase in a valuation allowance of approximately $85.0 million recorded in the first quarter of 2022.
The increase in sales volumes reflects growth in certain Asian markets, partially offset by a decrease in sales volumes from increased competition in certain established markets, particularly Germany and Japan. Despite competition from a gene therapy product and an oral product, we anticipate SPINRAZA revenue to be relatively flat in 2023, compared to 2022.
In 2024 we expect growth in rare disease revenue as we continue to launch SKYCLARYS in the U.S. Despite competition from a gene therapy product and an oral product, we anticipate SPINRAZA revenue to be relatively flat in 2024.
In January 2023 the EMA accepted for review the MAA for lecanemab. In January 2023 Eisai completed the submission of a MAA to the PMDA in Japan for lecanemab, and was granted Priority Review by the Japanese Ministry of Health, Labor and Welfare.
The meeting of the SAG is expected to take place during the first quarter of 2024 and the EC decision for the MAA of lecanemab is expected during the first half of 2024. • In January 2024 the NMPA approved LEQEMBI in China, with an expected launch date in 2024. • In December 2023 we and Eisai announced that LEQEMBI intravenous infusion was launched in Japan. • In September 2023 the Japanese Ministry of Health, Labor and Welfare approved LEQEMBI in Japan. • In January 2023 the EMA accepted for review the MAA for lecanemab. • In February 2023 the BLA for lecanemab was granted Priority Review by the NMPA of China. • In May 2023 we and Eisai announced the submission of a MAA for lecanemab to the U.K.
These charges were recognized in research and development expense in our consolidated statements of income for the year ended December 31, 2021. 64 Table of Conten ts For additional information on the amortization and impairment of our acquired intangible assets, please read Note 7, Intangible Assets and Goodwill , to our consolidated financial statements included in this report.
For additional information on the amortization and impairment of our acquired intangible assets, please read Note 7, Intangible Assets and Goodwill , to our consolidated financial statements included in this report. COLLABORATION PROFIT SHARING/(LOSS REIMBURSEMENT) Collaboration profit sharing/(loss reimbursement) primarily includes Samsung Bioepis' 50.0% share of the profit or loss related to our biosimilars 2013 commercial agreement with Samsung Bioepis.
This decrease was primarily due to a $666.5 million, or 10.9%, decrease in MS product revenue, a $111.6 million, or 5.9%, decrease in SPINRAZA product revenue and an $80.0 million, or 9.6%, decrease in revenue from our biosimilar business. ◦ The decrease in MS product revenue of $666.5 million, or 10.9%, from $6,096.7 million in 2021 to $5,430.2 million in 2022, was primarily due to a decrease in TECFIDERA demand as a result of multiple TECFIDERA generic entrants in North America, Brazil and certain E.U. countries, and a decrease in Interferon demand due to competition as patients transition to higher efficacy and oral MS therapies. ◦ The decrease in SPINRAZA revenue of $111.6 million, or 5.9%, from $1,905.1 million in 2021 to $1,793.5 million in 2022, was primarily due to country mix, the unfavorable impact of foreign currency exchange and the timing of shipments, partially offset by an increase in sales volumes.
SPINRAZA revenue increased $10.3 million, from $600.2 million in 2022 to $610.5 million in 2023, or 1.7%, primarily due to an increase in pricing, partially offset by higher discounts and allowances. • Rest of world SPINRAZA revenue decreased $62.6 million, from $1,193.3 million in 2022 to $1,130.7 million in 2023, or 5.2%, primarily due to the unfavorable impact of foreign currency exchange, a decrease in demand in certain European markets driven by increased competition, a decrease in pricing and the timing of shipments in certain Asian markets. • U.S.
For additional information on our revenue reserves, please read Note 5, Revenue, to our consolidated financial statements included in this report.
The change also benefits from the resolution of an uncertain tax matter during the first quarter of 2023 related to tax credits. For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.
Royalty Cost of Sales For 2022 compared to 2021, the decrease in royalty cost of sales was primarily due to lower royalties payable on lower sales of SPINRAZA, TYSABRI and AVONEX, partially offset by higher royalties payable on higher sales of VUMERITY.
ROYALTY COST OF SALES For 2023 compared to 2022, the decrease in royalty cost of sales was primarily due to lower royalties payable on lower sales of TYSABRI, partially offset by an increase in royalty cost of sales due to higher royalties payable on higher sales of VUMERITY and SKYCLARYS, which we began recognizing in the fourth quarter of 2023, subsequent to our acquisition of Reata. 75 T able of Contents RESEARCH AND DEVELOPMENT Research and development expense, as a percentage of total revenue, was 25.0%, 21.9% and 22.8% for the years ended December 31, 2023, 2022 and 2021, respectively.
For additional information on our collaboration arrangements with Eisai, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report. Selling, General and Administrative For 2022 compared to 2021, the decrease in selling, general and administrative expense was primarily due to cost-reduction measures realized during 2022.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. 77 T able of Contents SELLING, GENERAL AND ADMINISTRATIVE For 2023 compared to 2022, selling, general and administrative expense increased by approximately 6.1% primarily due to the recognition of approximately $196.4 million in equity-based compensation expense related to our acquisition of Reata in September 2023.
Eisai Collaboration Agreements LEQEMBI (lecanemab) Collaboration Agreement In January 2023 we and Eisai announced that the FDA granted accelerated approval of LEQEMBI, an anti-amyloid antibody for the treatment of Alzheimer's disease. Additionally, in January 2023 we and Eisai announced the completed submission of a supplemental BLA to the FDA for traditional approval of LEQEMBI.
RECENT DEVELOPMENTS DEVELOPMENTS IN KEY COLLABORATIVE RELATIONSHIPS LEQEMBI (lecanemab) United States In July 2023 the FDA granted traditional approval of LEQEMBI, an anti-amyloid antibody for the treatment of Alzheimer's disease, which was previously granted accelerated approval by the FDA in January 2023. Following the FDA's traditional approval of LEQEMBI, CMS confirmed broader coverage of LEQEMBI.
As a result of the lease assignment, we derecognized the related operating lease obligation and right-of-use asset during the second quarter of 2022. For the year ended December 31, 2022, we recognized other restructuring costs of approximately $13.2 million, which were recorded in restructuring charges in our consolidated statements of income.
In connection with this termination, we recorded close-out costs of approximately $13.2 million in research and development expense within our consolidated statements of income for the year ended December 31, 2023.
We do not anticipate a supply shortage in 2023 and are currently focused on rebuilding adequate inventory . 54 Table of Conten ts Interferon For 2022 compared to 2021, the 18.9% decrease in U.S. Interferon revenue was primarily due to a decrease in Interferon sales volumes of 15.5%.
In addition, we are in the process of securing regulatory approval for a secondary source of supply. We do not anticipate a supply shortage in 2024 and are currently focused on rebuilding adequate inventory. 68 T able of Contents RARE DISEASE • U.S.
Reserves for discounts, contractual adjustments and returns that reduced gross product revenue are summarized as follows: 58 Table of Conten ts For the years ended December 31, 2022, 2021 and 2020, reserves for discounts and allowances as a percentage of gross product revenue were 30.1%, 28.6% and 27.1%, respectively. Discounts Discounts include trade term discounts and wholesaler incentives.
If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment. 72 T able of Contents Reserves for discounts, contractual adjustments and returns that reduced gross product revenue are summarized as follows: For the Years Ended December 31, (In millions) 2023 2022 2021 Contractual adjustments $ 2,681.7 $ 2,716.9 $ 2,852.6 Discounts 735.2 663.9 732.8 Returns 38.2 5.1 11.9 Total discounts and allowances $ 3,455.1 $ 3,385.9 $ 3,597.3 For the years ended December 31, 2023, 2022 and 2021, reserves for discounts and allowances as a percentage of gross product revenue were 32.0%, 30.1% and 28.6%, respectively.
As a result, we recognized approximately $10.4 million of accelerated depreciation expense, which was recorded in restructuring charges in our consolidated statements of income for the year ended December 31, 2022 . In May 2022 we entered into a lease assignment agreement whereby we assigned our remaining lease obligations to an external third party.
As a result, we recorded a net gain on the deconsolidation of 81 T able of Contents Neurimmune of approximately $3.0 million, which was recorded in other (income) expense, net within our consolidated statements of income for the year ended December 31, 2023.
As described below under Results of Operations , our net income and diluted earnings per share attributable to Biogen Inc. for the year ended December 31, 2022, compared to the year ended December 31, 2021, reflects the following: Revenue • Total revenue was $10,173.4 million for 2022, representing an $808.3 million, or 7.4%, decrease compared to $10,981.7 million in 2021. • Product revenue, net totaled $7,987.8 million for 2022, representing an $859.1 million, or 9.7%, decrease compared to $8,846.9 million in 2021.
We will continue to assess as further information becomes available. 62 T able of Contents FINANCIAL HIGHLIGHTS As described below under Results of Operations , our net income and diluted earnings per share attributable to Biogen Inc. for the year ended December 31, 2023, compared to the year ended December 31, 2022, reflects the following: TOTAL REVENUE Decreased $337.8 million or 3.3% DILUTED EARNINGS PER SHARE Decreased $12.90 or 61.8% PRODUCT REVENUE Decreased $741.1 million or 9.3% • MS revenue decreased $768.3 million, or 14.1% • Rare disease revenue increased $9.5 million, or 0.5% • Biosimilars revenue increased $18.9 million, or 2.5% • The decrease in MS product revenue was primarily due to a decrease in TECFIDERA demand as a result of multiple TECFIDERA generic entrants in North America, Brazil and certain E.U. countries, a decrease in Interferon demand due to competition as patients transition to higher efficacy therapies and a decrease in U.S.
We expect an increase in VUMERITY sales volumes in 2023, compared to 2022, mostly due to demand growth in the U.S. and select European markets. We believe that we have resolved previously reported manufacturing issues at our contract manufacturer. In addition, we are in the process of securing regulatory approval for a secondary source of supply.
We are also aware of a biosimilar entrant of TYSABRI that was approved in the U.S. in August 2023 and the E.U. in September 2023. We believe that future sales of TYSABRI may be adversely affected by the entrance of this biosimilar. We believe that we have resolved previously reported manufacturing issues at our VUMERITY contract manufacturer.
Under these initiatives, we estimate we will incur total restructuring charges of approximately $131.0 million, primarily related to severance. These amounts were substantially incurred during 2022. As of December 31, 2022, approximately $35.9 million remained in our restructuring reserve and payments are expected to be made through 2026.
Charges related to our 2022 cost saving initiatives were substantially incurred during 2022 with remaining payments expected to be made through 2026. 79 T able of Contents Total charges incurred from our 2022 cost saving initiatives are summarized as follows: For the Years Ended December 31, 2023 2022 (In millions) Severance Costs Accelerated Depreciation and Other Costs Total Severance Costs Accumulated Depreciation and Other Costs (1) Total Restructuring charges $ (2.2) $ 2.6 $ 0.4 $ 112.6 $ 18.5 $ 131.1 Total charges $ (2.2) $ 2.6 $ 0.4 $ 112.6 $ 18.5 $ 131.1 (1) Amounts reflect a gain recorded during the third quarter of 2022 of approximately $5.3 million related to the partial termination of a portion of our lease located at 300 Binney Street.

… 192 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

9 edited+5 added−3 removed1 unchanged
Biggest changeInternational Switzerland In order to support our future growth and drug development pipeline, we are building a large-scale biologics manufacturing facility in Solothurn, Switzerland. Upon completion, this facility will include 393,000 square feet related to a large-scale biologics manufacturing facility, 290,000 square feet of warehouse, utilities and support space and 51,000 square feet of administrative space.
Biggest changeFor additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. INTERNATIONAL SWITZERLAND In order to support our future growth and drug development pipeline, we built a large-scale biologics manufacturing facility in Solothurn, Switzerland.
North Carolina In RTP, NC we own approximately 1,040,000 square feet of real estate space, which is summarized as follows: • 357,000 square feet of laboratory and office space; • 206,000 square foot multi-purpose facility, including an ASO manufacturing suite and administrative space; • 175,000 square feet related to a large-scale biologics manufacturing facility; • 105,000 square feet related to a small-scale biologics manufacturing facility; • 84,000 square feet of warehouse space and utilities; • 70,000 square feet related to a parenteral fill-finish facility; and • 43,000 square feet related to a large-scale purification facility.
NORTH CAROLINA In RTP, North Carolina we own approximately 1,040,000 square feet of real estate space, which is summarized as follows: • 357,000 square feet of laboratory and office space; • 206,000 square foot multi-purpose facility, including an ASO manufacturing suite and administrative space; • 175,000 square feet related to a large-scale biologics manufacturing facility; • 105,000 square feet related to a small-scale biologics manufacturing facility; • 84,000 square feet of warehouse space and utilities; • 70,000 square feet related to a parenteral fill-finish facility; and • 43,000 square feet related to a large-scale purification facility.
Other International We lease office space in Baar, Switzerland, our international headquarters; the U.K.; Germany; France; Japan; Canada and numerous other countries. Our international lease agreements expire at various dates through the year 2031.
OTHER INTERNATIONAL We lease office space in Baar, Switzerland, our international headquarters; the U.K.; Germany; France; Japan; Canada and numerous other countries. Our international lease agreements expire at various dates through the year 2034.
For additional information 42 Table of Conten ts on our 125 Broadway sale and leaseback transaction, please read Note 11, Property, Plant and Equipment and Note 12, Leases , to our consolidated financial statements included in this report. 300 Binney Street Lease Modification In September 2022 we entered into an agreement to partially terminate a portion of our lease located at 300 Binney Street, Cambridge, MA (300 Binney Street), as well as to reduce the lease term for the majority of the remaining space.
For additional information on our 125 Broadway sale and leaseback transaction, please read Note 11, Property, Plant and Equipment and Note 12, Leases , to our consolidated financial statements included in this report. 300 BINNEY STREET LEASE MODIFICATION In September 2022 we entered into an agreement to partially terminate a portion of our lease located at 300 Binney Street, as well as to reduce the lease term for the majority of the remaining space.
In addition, we lease approximately 65,000 square feet of warehouse space in Durham, NC. Our North Carolina lease agreements expire at various dates through the year 2025. In March 2021 we announced our plans to build a new gene therapy manufacturing facility in RTP, NC to support our gene therapy pipeline across multiple therapeutic areas.
In addition, we lease approximately 65,000 square feet of warehouse space in Durham, North Carolina. Our North Carolina lease agreements expire at various dates through the year 2025. In the fourth quarter of 2021 we began construction of a new gene therapy manufacturing facility in RTP, North Carolina to support our gene therapy pipeline across multiple therapeutic areas.
Our Massachusetts lease agreements expire at various dates through the year 2028. 125 Broadway Building Sale and Leaseback In September 2022 we completed the sale of our building and land parcel located at 125 Broadway.
Our lease expires in May 2025 and we do not intend on renewing the lease agreement. Our Massachusetts lease agreements expire at various dates through the year 2028. 125 BROADWAY BUILDING SALE AND LEASEBACK In September 2022 we completed the sale of our building and land parcel located at 125 Broadway.
In addition, we lease a total of approximately 1,429,000 square feet in Massachusetts, which is summarized as follows: • 1,072,000 square feet in Cambridge, MA, which is comprised of offices for our corporate headquarters and other administrative and development functions and laboratories, of which 289,000 square feet is subleased by multiple companies for general office space, laboratories and manufacturing facilities; and • 357,000 square feet of office space in Weston, MA, of which 174,000 square feet is subleased through the remaining term of our lease agreement.
MASSACHUSETTS In Cambridge, Massachusetts we own approximately 263,000 square feet of real estate space, consisting of a building that houses a research laboratory and a cogeneration plant. 55 T able of Contents In addition, we lease a total of approximately 1,165,000 square feet in Massachusetts, which is summarized as follows: • 808,000 square feet in Cambridge, Massachusetts, which is comprised of offices for our corporate headquarters and other administrative and development functions and laboratories, of which 209,000 square feet is subleased by multiple companies for general office space, laboratories and manufacturing facilities; and • 357,000 square feet of office space in Weston, Massachusetts, of which 174,000 square feet is subleased through the remaining term of our lease agreement.
The sale and immediate leaseback of this building qualified for sale and leaseback treatment and is classified as an operating lease.
In connection with this sale, we simultaneously leased back the building for a term of approximately 5.5 years. The sale and immediate leaseback of this building qualified for sale and leaseback treatment and is classified as an operating lease.
ITEM 2. PROPERTIES Below is a summary of our owned and leased properties as of December 31, 2022. U.S. Massachusetts In Cambridge, MA we own approximately 263,000 square feet of real estate space, consisting of a building that houses a research laboratory and a cogeneration plant.
ITEM 2. PROPERTIES Below is a summary of our owned and leased properties as of December 31, 2023. U.S.
Removed
In connection with this sale, we simultaneously leased back the building for a term of approximately 5.5 years, which resulted in the recognition of approximately $168.2 million in new lease liabilities and right-of-use assets recorded within our consolidated balance sheets as of December 31, 2022.
Added
The new manufacturing facility will be approximately 197,000 square feet.
Removed
The new manufacturing facility will be approximately 197,000 square feet and is expected to be operational by the end of 2023, with an estimated total investment of approximately $195.0 million. Construction for this new facility began during the fourth quarter of 2021.
Added
As we continue to advance our research and development prioritization efforts, which includes refocusing our investment in gene therapy, we are evaluating several alternative uses for this facility. 56 T able of Contents TEXAS As part of our acquisition of Reata in September 2023 we acquired leases totaling approximately 404,000 square feet of real estate space, which is summarized as follows: • 327,000 square feet in Plano, Texas, which is comprised of office and laboratory space, with an initial lease term through the year 2038.
Removed
In the second quarter of 2021 a portion of the facility received a GMP multi-product license from SWISSMEDIC. Solothurn has been approved for the manufacture of ADUHELM and LEQEMBI by the FDA. We estimate the second manufacturing suite at the Solothurn facility will be operational by the end of 2023.
Added
We do not intend to occupy this building and are evaluating opportunities to sublease this property; • 35,000 square feet in Irving, Texas, which is comprised of office and laboratory space and expires in 2024; and • 42,000 square feet in Plano, Texas, which is comprised of office and laboratory space and expires in 2024.
Added
This facility includes 393,000 square feet related to a large-scale biologics manufacturing facility, 290,000 square feet of warehouse, utilities and support space and 51,000 square feet of administrative space. In the second quarter of 2021 a portion of the facility (the first manufacturing suite) received a GMP multi-product license from the SWISSMEDIC and was placed into service.
Added
The second manufacturing suite became operational in January 2024. Solothurn has been approved for the manufacture of ADUHELM and LEQEMBI by the FDA. For additional information on our Solothurn manufacturing facility, please read Note 11, Property, Plant and Equipment, to our consolidated financial statements included in this report.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS For a discussion of legal matters as of December 31, 2022, please read Note 21, Litigation, to our consolidated financial statements included in this report, which is incorporated into this item by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 43 Table of Conten ts PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS For a discussion of legal matters as of December 31, 2023, please read Note 21, Litigation, to our consolidated financial statements included in this report, which is incorporated into this item by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 57 T able of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+2 added−3 removed1 unchanged
Biggest changeUnder our March 2019 Share Repurchase Program, we repurchased and retired approximately 4.1 million shares of our common stock at a cost of approximately $1.3 billion during the year ended December 31, 2020. In August 2022 the IRA was signed into law. Among other things, the IRA levies a 1.0% excise tax on net stock repurchases after December 31, 2022.
Biggest changeApproximately $2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2023. In August 2022 the IRA was signed into law. Among other things, the IRA levies a 1.0% excise tax on net stock repurchases after December 31, 2022.
Issuer Purchases of Equity Securities The following table summarizes our common stock repurchase activity during the fourth quarter of 2022: Period Total Number of Shares Purchased (#) Average Price Paid per Share ($) 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) October 2022 — $ — — $ 2,050.0 November 2022 — $ — — $ 2,050.0 December 2022 — $ — — $ 2,050.0 Total (1) — $ — (1) There were no share repurchases during the fourth quarter of 2022.
ISSUER PURCHASES OF EQUITY SECURITIES The following table summarizes our common stock repurchase activity during the fourth quarter of 2023: 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) October 2023 — $ — — $ 2,050.0 November 2023 — $ — — $ 2,050.0 December 2023 — $ — — $ 2,050.0 Total (1) — $ — (1) There were no share repurchases during the fourth quarter of 2023.
In October 2020 our Board of Directors authorized a program to repurchase up to $5.0 billion of our common stock (2020 Share Repurchase Program). Our 2020 Share Repurchase Program does not have an expiration date. All share repurchases under our 2020 Share Repurc hase Program will be retired.
In October 2020 our Board of Directors authorized our 2020 Share Repurchase Program, which is a program to repurchase up to $5.0 billion of our common stock. Our 2020 Share Repurchase Program does not have an expiration date. All share repurchases under our 2020 Share Repurc hase Program will be retired.
The performance graph below assumes the investment of $100.00 on December 31, 2017, in our common stock and each of the three indexes, with dividends being reinvested.
The performance graph below assumes the investment of $100.00 on December 31, 2018, in our common stock and each of the three indexes, with dividends being reinvested.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market and Stockholder Information Our common stock trades on The Nasdaq Global Select Market under the symbol “BIIB.” As of February 14, 2023, there were approximately 448 shareholders of record of our common stock. Dividends We have not paid cash dividends since our inception.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET AND STOCKHOLDER INFORMATION Our common stock trades on The Nasdaq Global Select Market under the symbol “BIIB.” As of February 12, 2024, there were approximately 420 shareholders of record of our common stock. DIVIDENDS We have not paid cash dividends since our inception.
Under our 2020 Share Repurchase Program, we repurchased and retired approximately 3.6 million, 6.0 million and 1.6 million shares of our common stock at a cost of approximately $750.0 million, $1.8 billion and $400.0 million during the years ended December 31, 2022, 2021 and 2020 , respectively.
Under our 2020 Share Repurchase Program, we repurchased and retired approximately 3.6 million and 6.0 million shares of our common stock at a cost of approximately $750.0 million and $1.8 billion during the years ended December 31, 2022 and 2021 , respectively. There were no share repurchases of our common stock during the year ended December 31, 2023.
Historically, we have made discretionary share repurchases. 44 Table of Conten ts Performance Graph The performance graph below compares the five-year cumulative total stockholder return on our common stock, the Nasdaq Pharmaceutical Index, the S&P 500 Index and the Nasdaq Biotechnology Index.
While we have historically made discretionary share repurchases, we had no share repurchases of our common stock during the year ended December 31, 2023. 58 T able of Contents PERFORMANCE GRAPH The performance graph below compares the five-year cumulative total stockholder return on our common stock, the Nasdaq Pharmaceutical Index, the S&P 500 Index and the Nasdaq Biotechnology Index.
The stock price performance in the graph below is not necessarily indicative of future price performance. 2017 2018 2019 2020 2021 2022 Biogen Inc. $100.00 $94.46 $93.14 $76.86 $75.31 $86.92 Nasdaq Pharmaceutical Index $100.00 $107.95 $123.62 $136.62 $169.94 $189.23 S&P 500 Index $100.00 $95.62 $125.72 $148.85 $191.58 $156.88 Nasdaq Biotechnology Index $100.00 $91.14 $114.02 $144.15 $144.18 $129.59 The information included under the heading Performance Graph is “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be “soliciting material” subject to Regulation 14A or incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
The stock price performance in the graph below is not necessarily indicative of future price performance. 2018 2019 2020 2021 2022 2023 Biogen Inc. $100.00 $98.61 $81.37 $79.73 $92.01 $85.97 Nasdaq Pharmaceutical Index $100.00 $114.51 $126.56 $157.42 $175.29 $182.08 S&P 500 Index $100.00 $131.49 $155.68 $200.37 $164.08 $207.21 Nasdaq Biotechnology Index $100.00 $125.11 $158.17 $158.20 $142.19 $148.72 The information included under the heading Performance Graph is “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed to be “soliciting material” subject to Regulation 14A or incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Removed
Approximately $2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2022. In December 2019 our Board of Directors authorized a program to repurchase up to $5.0 billion of our common stock (December 2019 Share Repurchase Program), which was completed as of September 30, 2020.
Added
ITEM 6. RESERVED 59 T able of Contents ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our consolidated financial statements and the accompanying notes beginning on page F-1 of this report.
Removed
All shares repurchased under our December 2019 Share Repurchase Program were retired. Under our December 2019 Share Repurchase Program, we repurchased and retired approximately 16.7 million shares of our common stock at a cost of approximately $5.0 billion during the year ended December 31, 2020.
Added
For our discussion of the year ended December 31, 2022, compared to the year ended December 31, 2021, please read
Removed
In March 2019 our Board of Directors authorized a program to repurchase up to $5.0 billion of our common stock (March 2019 Share Repurchase Program), which was completed as of March 31, 2020. All shares repurchased under our March 2019 Share Repurchase Program were retired.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

11 edited+2 added−32 removed1 unchanged
Biggest changeWe have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, CLL and other conditions; RITUXAN HYCELA for the treatment of non-Hodgkin's lymphoma and CLL; GAZYVA for the treatment of CLL and follicular lymphoma; OCREVUS for the treatment of PPMS and RMS; LUNSUMIO (mosunetuzumab), which was granted accelerated approval in the U.S. during the fourth quarter of 2022 for the treatment of relapsed or refractory follicular lymphoma; glofitamab, an investigational bispecific antibody for the potential treatment of non-Hodgkin's lymphoma; and have the option to add other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, a wholly-owned member of the Roche Group.
Biggest changeWe also have collaborations with Eisai on the commercialization of LEQEMBI for the treatment of Alzheimer's disease and Sage on the commercialization of ZURZUVAE for the treatment of PPD and we have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, CLL and other conditions; RITUXAN HYCELA for the treatment of non-Hodgkin's lymphoma and CLL; GAZYVA for the treatment of CLL and follicular lymphoma; OCREVUS for the treatment of PPMS and RMS; LUNSUMIO for the treatment of relapsed or refractory follicular lymphoma; COLUMVI, a bispecific antibody for the treatment of non-Hodgkin's lymphoma; and have the option to add other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, a wholly-owned member of the Roche Group.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the year ended December 31, 2021. Executive Summary Introduction Biogen is a global biopharmaceutical company focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases worldwide.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the year ended December 31, 2022. EXECUTIVE SUMMARY INTRODUCTION Biogen is a global biopharmaceutical company focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases worldwide.
We also commercialize biosimilars of advanced biologics including BENEPALI, an etanercept biosimilar referencing ENBREL, IMRALDI, an adalimumab biosimilar referencing HUMIRA, and FLIXABI, an infliximab biosimilar referencing REMICADE, in certain countries in Europe, as well as BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, in the U.S.
We commercialize a portfolio of biosimilars of advanced biologics including BENEPALI, an etanercept biosimilar referencing ENBREL, IMRALDI, an adalimumab biosimilar referencing HUMIRA, and FLIXABI, an infliximab biosimilar referencing REMICADE, in certain countries in Europe, as well as BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, in the U.S. and certain international markets.
In the longer term, our revenue growth will depend upon the successful clinical development, regulatory approval and launch of new commercial 46 Table of Conten ts products as well as additional indications for our existing products, our ability to obtain and maintain patents and other rights related to our marketed products, assets originating from our research and development efforts and/or successful execution of external business development opportunities.
In the longer term, our revenue growth will depend upon the successful clinical development, regulatory approval and launch of new commercial products as well as additional indications for our existing products, our ability to obtain 60 T able of Contents and maintain patents and other rights related to our marketed products, assets originating from our research and development efforts and/or successful execution of external business development opportunities.
Business Environment For a detailed discussion on our business environment, please read Item 1. Business, included in this report. For additional information on our competition and pricing risks that could negatively impact our product sales, please read Item 1A. Risk Factors, included in this report. ADUHELM (aducanumab) U.S.
BUSINESS ENVIRONMENT For a detailed discussion on our business environment, please read Item 1. Business, included in this report. For additional information on our competition and pricing risks that could negatively impact our product sales, please read
In order to support our future growth and drug development pipeline, we are expanding our large molecule production capacity by building a large-scale biologics manufacturing facility in Solothurn, Switzerland. In the second quarter of 2021 a portion of the facility received a GMP multi-product license from SWISSMEDIC.
In order to support our future growth and drug development pipeline, we expanded our large molecule production capacity and built a large-scale biologics manufacturing facility in Solothurn, Switzerland. In the second quarter of 2021 a portion of the facility (the first manufacturing suite) received a GMP multi-product license from the SWISSMEDIC and was placed into service.
We continue to develop potential biosimilar products including BIIB800, a proposed tocilizumab biosimilar referencing ACTEMRA, and SB15, a proposed aflibercept biosimilar referencing EYLEA. In February 2023 we announced that we are exploring strategic options for our biosimilars business.
We also have exclusive rights to commercialize TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA. We continue to develop potential biosimilar product SB15, a proposed aflibercept biosimilar referencing EYLEA. In February 2023 we announced that we are exploring strategic options for our biosimilars business.
Solothurn has been approved for the manufacture of ADUHELM and LEQEMBI by the FDA. We estimate the second manufacturing suite at the Solothurn facility will be operational by the end of 2023. We believe that the Solothurn facility will support our anticipated near-term needs for the manufacturing of biologic assets.
The second manufacturing suite became operational in January 2024. Solothurn has been approved for the manufacture of ADUHELM and LEQEMBI by the FDA. We believe that the Solothurn facility will support our anticipated near to mid-term needs for the manufacturing of biologic assets, including the commercial launch of LEQEMBI.
We have a broad portfolio of medicines to treat MS, have introduced the first approved treatment for SMA and co-developed two treatments to address a defining pathology of Alzheimer’s disease. We are focused on advancing our pipeline in neurology, neuropsychiatry, specialized immunology and rare diseases.
We have a broad portfolio of medicines to treat MS, have introduced the first approved treatment for SMA, co-developed treatments to address a defining pathology of Alzheimer’s disease and launched the first approved treatment to target a genetic cause of ALS.
If we are unable to fully utilize our manufacturing facilities, due to lower than forecasted demand for our products, we will incur excess capacity charges which will have a negative effect on our financial condition and results of operations.
The plant represents a significant increase in our overall manufacturing capacity and is not yet being fully utilized, resulting in our recording of excess capacity charges. If we are unable to fully utilize our manufacturing facilities, we will incur additional excess capacity charges which would have a negative effect on our financial condition and results of operations.
We support our drug discovery and development efforts through internal research and development programs and external collaborations. Our marketed products include TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA for the treatment of MS; SPINRAZA for the treatment of SMA; ADUHELM for the treatment of Alzheimer's disease; and FUMADERM for the treatment of severe plaque psoriasis.
Our marketed products include TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA for the treatment of MS; SPINRAZA for the treatment of SMA; SKYCLARYS for the treatment of Friedreich's Ataxia; QALSODY for the treatment of ALS; and FUMADERM for the treatment of severe plaque psoriasis.
Removed
We also collaborate with Eisai on the commercialization of LEQEMBI for the treatment of Alzheimer's disease, which was granted accelerated approval by the FDA in January 2023.
Added
Through our 2023 acquisition of Reata we market the first and only drug approved in the U.S. and the E.U. for the treatment of Friedreich's Ataxia in adults and adolescents aged 16 years and older. We are focused on advancing our pipeline in neurology, specialized immunology and rare diseases.
Removed
In addition to continuing to invest in new potential innovation in MS and SMA we are advancing our mid-to-late stage programs including zuranolone for MDD and PPD, BIIB080 for Alzheimer's disease, tofersen for ALS and both litifilimab and dapirolizumab pegol for certain forms of lupus.
Added
We support our drug discovery and development efforts through internal research and development programs and external collaborations.
Removed
Our revenue depends 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.
Removed
In June 2021 the FDA granted accelerated approval of ADUHELM, which, until March of 2022, we had been collaborating on with Eisai, based on reduction in amyloid beta plaques observed in patients treated with ADUHELM.
Removed
As part of the accelerated approval, we are required to conduct a confirmatory trial to verify the clinical benefit of ADUHELM in patients with Alzheimer’s disease.
Removed
The FDA may withdraw approval if, among other things, the confirmatory trial fails to verify clinical benefit of ADUHELM, ADUHELM's benefit-risk is no longer positive or we fail to comply with the conditions of the accelerated approval. In April 2022 the CMS released a final NCD for the class of anti-amyloid treatments in Alzheimer's disease, including ADUHELM.
Removed
The final NCD confirmed coverage with evidence development, in which patients with Medicare can only access treatment if they are part of an approved clinical trial. This decision effectively resulted in denying all Medicare beneficiaries access to ADUHELM. We expect that this decision will reduce future demand for ADUHELM to a minimal level.
Removed
During the first quarter of 2022, as a result of the final NCD, we recorded approximately $275.0 million of charges associated with the write-off of inventory and purchase commitments in excess of forecasted demand related to ADUHELM. Additionally, for the year ended December 31, 2022, we recorded approximately $111.0 million of aggregate gross idle capacity charges related to ADUHELM.
Removed
These charges were recorded in cost of sales within our consolidated statements of income for the year ended December 31, 2022. We have recognized approximately $197.0 million related to Eisai's 45.0% share of inventory, idle capacity charges and contractual commitments in collaboration profit (loss) sharing within our consolidated statements of income for the year ended December 31, 2022.
Removed
Additionally, as a result of the final NCD we have substantially eliminated our commercial infrastructure supporting ADUHELM, retaining minimal resources to manage patient access programs, including a continued free drug program for patients currently on treatment in the U.S.
Removed
We expect to continue funding certain regulatory and research and development activities for ADUHELM, including the continuation of the EMBARK re-dosing study and the Phase 4 post-marketing requirement study, ENVISION. Additional actions regarding ADUHELM may be informed by upcoming data readouts expected for this class of antibodies, as well as further engagement with the FDA and CMS.
Removed
On March 14, 2022, we amended our ADUHELM Collaboration Agreement with Eisai. As of the amendment date, we have sole decision making and commercialization rights worldwide on ADUHELM, and beginning January 1, 2023, Eisai receives only a tiered royalty based on net sales of ADUHELM, and no longer participates in sharing ADUHELM's global profits and losses.
Removed
Eisai's share of development, commercialization and manufacturing expense was limited to $335.0 million for the period from January 1, 2022 to December 31, 2022, which was achieved as of December 31, 2022. Once this limit was achieved, we became responsible for all ADUHELM related costs.
Removed
Rest of World In October 2020 the EMA accepted for review the MAA for aducanumab and in December 2020 the Ministry of Health, Labor and Welfare (MHLW) accepted for review the Japanese NDA for aducanumab. In December 2021 the CHMP of the EMA adopted a negative opinion on the MAA for aducanumab in Europe.
Removed
We sought re-examination of the opinion by the CHMP. In April 2022 we announced our decision to withdraw our MAA for aducanumab in Europe. TECFIDERA Multiple TECFIDERA generic entrants are now in North America, Brazil and certain E.U. countries and have deeply discounted prices compared to TECFIDERA.
Removed
The generic competition for TECFIDERA has significantly reduced our TECFIDERA revenue and we expect that TECFIDERA revenue will continue to decline in the future. In the E.U., we are seeking to enforce a patent granted in June 2022 that relates to TECFIDERA and expires in 2028.
Removed
In addition, we are litigating to affirm that TECFIDERA is entitled to regulatory data and 47 Table of Conten ts market protection until at least February 2024.
Removed
Our Company, the EMA and the EC have each appealed the May 2021 decision of the European General Court, which annulled the EMA's decision not to validate an application for approval of a TECFIDERA generic on the basis that the EMA and EC conducted the wrong assessment when determining TECFIDERA's entitlement to regulatory data and marketing protection.
Removed
Our Company, the EMA and the EC have each appealed the General Court’s decision as wrongly decided and the appeal is pending. On October 6, 2022, the Advocate General of the CJEU issued a nonbinding advisory opinion in Biogen's favor. This opinion recommends that the CJEU set aside the judgment of the European General Court.
Removed
We are awaiting the decision of the CJEU. For additional information, please read Note 21, Litigation , to our consolidated financial statements included in this report and the discussion under Results of Operations - Product Revenue - Multiple Sclerosis (MS) - Fumarate below.
Removed
Business Update Regarding COVID-19 and Other Disruptions COVID-19 The COVID-19 pandemic continues to present a substantial public health and economic challenge around the world.
Removed
The length of time and full extent to which the COVID-19 pandemic directly or indirectly impacts our business, results of operations and financial condition, including sales, expense, reserves and allowances, the supply chain, manufacturing, clinical trials, research and development costs and employee-related costs, depends on future developments that are highly uncertain, subject to change and are difficult to predict, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19 as well as the economic impact on local, regional, national and international customers and markets.
Removed
We are monitoring the demand for our products, including the duration and degree to which we may see delays in starting new patients on a product due to hospitals diverting the resources that are necessary to administer certain of our products to care for COVID-19 patients, including products, such as TYSABRI and SPINRAZA, that are administered in a physician's office or hospital setting.
Removed
We may also see reduced demand for immunosuppressant therapies during the COVID-19 pandemic. While we are currently continuing the clinical trials we have underway in sites across the globe, COVID-19 precautions have impacted the timeline for some of our clinical trials and these precautions may, directly or indirectly, have a further impact on timing in the future.
Removed
Geopolitical Tensions The ongoing geopolitical tensions related to Russia's invasion of Ukraine have resulted in global business disruptions and economic volatility, including sanctions and other restrictions levied on the government and businesses in Russia.
Removed
Although we do not have affiliates or employees, in either Russia or Ukraine, we do provide various therapies to patients in Russia through a distributor and are currently involved in clinical trials with sites in Ukraine and Russia. The timing and costs of these trials may be impacted as a result of the conflict.
Removed
In addition, new government sanctions on the export of certain manufacturing materials to Russia may delay or limit our ability to get new products approved.
Removed
The impact of the conflict on our operations and financial performance remains uncertain and will depend on future developments, including the severity and duration of the conflict, its impact on regional and global economic conditions and whether the conflict spreads or has effects on countries outside Ukraine and Russia.
Removed
Revenue generated from sales in these regions represented less than 2.0% of total product revenue for the years ended December 31, 2022 and 2021.
Removed
We will continue to monitor the ongoing conflict between Russia and Ukraine and assess any potential impacts on our business, supply chain, partners or customers, as well as any factors that could have an adverse effect on our results of operations.
Removed
Factors such as the COVID-19 pandemic and other global health outbreaks, adverse weather events, geopolitical events, labor or raw material shortages and other supply chain disruptions could result in product shortages or other difficulties and delays or increased costs in manufacturing our products.
Removed
For additional information on the various risks posed by the COVID-19 pandemic and the conflict in Ukraine, please read

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

69 edited+34 added−27 removed39 unchanged
Biggest changeOperating cash flow is derived by adjusting our net income for: • non-cash operating items such as depreciation and amortization, impairment charges, unrealized gain (loss) on strategic investments, acquired IPR&D and share-based compensation; • changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations; and • changes in the fair value of contingent payments associated with our acquisitions of businesses and payments related to collaborations.
Biggest changeCASH FLOW The following table summarizes our cash flow activity: % Change For the Years Ended December 31, 2023 vs. 2022 2022 vs. 2021 (In millions, except percentages) 2023 2022 2021 Net cash flow provided by (used in) operating activities $ 1,547.2 $ 1,384.3 $ 3,639.9 11.8 % (62.0) % Net cash flow provided by (used in) investing activities (4,101.0) 1,576.6 (563.7) (360.1) 379.7 Net cash flow provided by (used in) financing activities 149.3 (1,747.3) (2,086.2) 108.5 (16.2) OPERATING ACTIVITIES Operating cash flow is derived by adjusting our net income for: • non-cash operating items such as depreciation and amortization, impairment charges, unrealized (gain) loss on strategic investments and share-based compensation; • changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations; and • (gains) losses on the disposal of assets, deferred income taxes, changes in the fair value of contingent payments associated with our acquisitions of businesses and acquired IPR&D.
We use foreign currency forward contracts and foreign currency options 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 12 months. We do not engage in currency speculation.
We use foreign currency forward contracts and foreign currency options to manage foreign currency risk, with the majority of our forward contracts and options used to hedge certain forecasted revenue and operating expense transactions denominated in foreign currencies in the next 12 months. We do not engage in currency speculation.
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.
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, foreign currency options, interest rate lock contracts and interest rate swap contracts. We do not enter into financial instruments for trading or speculative purposes.
Cash, Cash Equivalents and Marketable Securities Until required for another use in our business, we typically invest our cash reserves in bank deposits, certificates of deposit, commercial paper, corporate notes, U.S. and foreign government instruments, overnight reverse repurchase agreements and other interest-bearing marketable debt instruments in accordance with our investment policy.
Until required for another use in our business, we typically invest our cash reserves in bank deposits, certificates of deposit, commercial paper, corporate notes, U.S. and foreign government instruments, overnight reverse repurchase agreements and other interest-bearing marketable debt instruments in accordance with our investment policy.
As a result, our consolidated financial position, results of operations and cash flow can be affected by market fluctuations in foreign currency exchange rates, primarily with respect to the Euro, British pound sterling, Canadian dollar, Swiss franc and Japanese yen.
As a result, our consolidated financial position, results of operations and cash flow can be affected by market fluctuations in foreign currency exchange rates, primarily with respect to the Euro, British pound sterling, Canadian dollar and Swiss franc.
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.
The Transition Toll Tax is being 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.
SPINRAZA We make royalty payments on annual worldwide net sales of SPINRAZA using a tiered royalty rate between 11.0% and 15.0%, which are recognized as cost of sales in our consolidated statements of income.
SPINRAZA We make royalty payments to Ionis on annual worldwide net sales of SPINRAZA using a tiered royalty rate between 11.0% and 15.0%, which are recognized as cost of sales in our consolidated statements of income.
We have acquired, and expect to continue to acquire, intangible assets through the acquisition of biotechnology companies or through the consolidation of variable interest entities. These intangible assets primarily consist of technology associated with human therapeutic products and IPR&D product candidates.
We have acquired, and expect to continue to acquire, intangible assets through the acquisition of biotechnology companies or through the consolidation of variable interest entities. These intangible assets primarily consist of technology associated with human therapeutic products, IPR&D product candidates and priority review vouchers.
We consider matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews, we have no plans to appeal or litigate any aspect of the tax position and we believe that it is highly unlikely that the taxing authority would examine or re-examine the related tax position.
We consider matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews, we have no plans to appeal or litigate any aspect of the tax position and we believe that it is highly unlikely that the taxing authority would examine 90 T able of Contents or re-examine the related tax position.
If we acquire an asset or group of assets that do not meet the definition of a business under applicable accounting standards, the acquired IPR&D is expensed on its acquisition date. Future costs to develop these assets are recorded to 77 Table of Conten ts research and development expense as they are incurred.
If we acquire an asset or group of assets that do not meet the definition of a business under applicable accounting standards, the acquired IPR&D is expensed on its acquisition date. Future costs to develop these assets are recorded to research and development expense as they are incurred.
The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenue recognized will not occur in a future period.
The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the 88 T able of Contents cumulative revenue recognized will not occur in a future period.
In particular, as the U.S. dollar strengthens versus other currencies, the value of the non-U.S. revenue 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 79 Table of Conten ts mitigated by the value of non-U.S. expense, which will also decline when reported in U.S. dollars.
In particular, as the U.S. dollar strengthens versus other currencies, the value of the non-U.S. revenue will decline when reported in U.S. dollars. The impact to net income as a result of a strengthening U.S. dollar will be partially mitigated by the value of non-U.S. expense, which will also decline when reported in U.S. dollars.
As of December 31, 2022 and 2021, a hypothetical adverse 10.0% movement would result in a hypothetical decrease in fair value of approximately $79.1 million and $104.8 million, respectively. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item 8 is contained on pages F-1 through F-79 of this report and is incorporated herein by reference.
As of December 31, 2023 and 2022, a hypothetical adverse 10.0% movement would result in a hypothetical decrease in fair value of approximately $41.7 million and $79.1 million, respectively. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item 8 is contained on pages F-1 through F-85 of this report and is incorporated herein by reference.
Contingent Development, Regulatory and Commercial Milestone Payments Based on our development plans as of December 31, 2022, we could trigger potential future milestone payments to third parties of up to approximately $9.3 billion, including approximately $2.0 billion in development milestones, approximately $0.5 billion in regulatory milestones and approximately $6.8 billion in commercial milestones, as part of our various collaborations, including licensing and development programs.
CONTINGENT DEVELOPMENT, REGULATORY AND COMMERCIAL MILESTONE PAYMENTS Based on our development plans as of December 31, 2023, we could trigger potential future milestone payments to third parties of up to approximately $5.1 billion, including approximately $0.9 billion in development milestones, approximately $0.4 billion in regulatory milestones and approximately $3.8 billion in commercial milestones, as part of our various collaborations, including licensing and development programs.
We recognize revenue following the five-step model prescribed under Financial Accounting Standards Board (FASB) Accounting Standards Codification 606, Revenue from Contracts with Customers : (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations.
We recognize revenue following the five-step model prescribed under FASB ASC 606, Revenue from Contracts with Customers : (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are subject to certain risks that may affect our results of operations, cash flow and fair values of assets and liabilities, including volatility in foreign currency exchange rates, interest rate movements and equity price exposure as well as changes in economic conditions in the markets in which we operate as a result of the COVID-19 pandemic and the conflict in Ukraine.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are subject to certain risks that may affect our results of operations, cash flow and fair values of assets and liabilities, including volatility in foreign currency exchange rates, interest rate movements and equity price exposure as well as changes in economic conditions in the markets in which we operate as a result of the conflict between Russia and Ukraine and the military conflict in the Middle East.
Product Revenue In the U.S., we sell our products primarily to wholesale and specialty distributors and specialty pharmacies. In other countries, we sell our products primarily to wholesale distributors, hospitals, pharmacies and other third-party distribution partners. These customers subsequently resell our products to 76 Table of Conten ts health care providers and patients.
PRODUCT REVENUE In the U.S., we sell our products primarily to wholesale and specialty distributors and specialty pharmacies. In other countries, we sell our products primarily to wholesale distributors, hospitals, pharmacies and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients.
As of December 31, 2022 and 2021, a hypothetical adverse 10.0% 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 $293.7 million and $333.1 million, respectively.
As of December 31, 2023 and 2022, a hypothetical adverse 10.0% 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 $249.4 million and $293.7 million, respectively.
Payments under these agreements generally become due and payable upon achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones was not considered probable as 75 Table of Conten ts of December 31, 2022, such contingencies have not been recorded in our financial statements.
Payments under these agreements generally become due and payable upon achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones was not considered probable as of December 31, 2023, such contingencies have not been recorded in our financial statements.
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 December 31, 2022, we have approximately $154.6 million of liabilities associated with uncertain tax positions.
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 December 31, 2023, we have approximately $172.0 million of liabilities associated with uncertain tax positions.
For additional information on our collaboration arrangement with Alkermes, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.
For additional information on our collaboration arrangements with Ionis, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.
Under our 2020 Share Repurchase Program, we repurchased and retired approximately 3.6 million, 6.0 million and 1.6 million shares of our common stock at a cost of approximately $750.0 million, $1.8 billion and $400.0 million during the years ended December 31, 2022, 2021 and 2020 , respectively.
Under our 2020 Share Repurchase Program, we repurchased and retired approximately 3.6 million and 6.0 million shares of our common stock at a cost of approximately $750.0 million and $1.8 billion during the years ended December 31, 2022 and 2021 , respectively. There were no share repurchases of our common stock during the year ended December 31, 2023.
The contracts with CROs are generally cancellable, with notice, at our option. We recorded accrued expense of approximately $20.4 million in our consolidated balance sheets for expenditures incurred by CROs as of December 31, 2022. We have approximately $929.0 million in cancellable future commitments based on existing CRO contracts as of December 31, 2022.
The contracts with CROs are generally cancellable, with notice, at our option. We recorded accrued expense of approximately $47.2 million in our consolidated balance sheets for expenditures incurred by CROs as of December 31, 2023. We have approximately $669.0 million in cancellable future commitments based on existing CRO contracts as of December 31, 2023.
On an ongoing basis we evaluate our estimates, judgments and assumptions. 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 revenue and expense.
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 revenue and expense. Actual results may differ from these estimates.
As of December 31, 2022 and 2021, we have accrued income tax liabilities of approximately $558.0 million and $633.0 million, respectively, under the Transition Toll Tax. Of the amounts accrued as of December 31, 2022, approximately $137.8 million is expected to be paid within one year.
As of December 31, 2023 and 2022, we have accrued income tax liabilities of approximately $419.5 million and $558.0 million, respectively, under the Transition Toll Tax. Of the amounts accrued as of December 31, 2023, approximately $185.4 million is expected to be paid within one year.
For additional information on our Senior Notes, please read Note 13, Indebtedness , to our consolidated financial statements included in this report. For a summary of the fair values of our outstanding borrowings as of December 31, 2022 and 2021, please read Note 8, Fair Value Measurements, to our consolidated financial statements included in this report.
For a summary of the fair values of our outstanding borrowings as of December 31, 2023 and 2022, please read Note 8, Fair Value Measurements, to our consolidated financial statements included in this report.
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.
As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.
These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Upon our election in the fourth quarter of 2018 to record deferred taxes for global intangible low-taxed income (GILTI), we have included amounts related to GILTI taxes within temporary difference.
These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Upon our election in the fourth quarter of 2018 to record deferred taxes for GILTI, we have included amounts related to GILTI taxes within temporary difference. Significant management judgment is required in assessing the realizability of our deferred tax assets.
This categorization did not have a material impact on our results of operations or financial position as of December 31, 2022, and is not expected to have a material impact on our results of operations or financial position in the future.
This categorization did not have a material impact on our results of operations or financial position as of December 31, 2023, and is not expected to have a material impact on our results of operations or financial position in the future. In December 2023 the Argentinian Peso experienced a substantial devaluation following a presidential election.
The change in working capital reflects an increase in total current assets of approximately $1.9 billion and a decrease in total current liabilities of approximately $1.0 billion.
The change in working capital reflects a decrease in total current assets of approximately $2,931.9 million and an increase in total current liabilities of approximately $161.5 million.
It is our policy to mitigate credit risk in our cash reserves and marketable securities by maintaining a well-diversified portfolio that limits the amount of exposure as to institution, maturity and investment type. As of December 31, 2022, we had cash, cash equivalents and marketable securities totaling approximately $5.6 billion compared to approximately $4.7 billion as of December 31, 2021.
It is our policy to mitigate credit risk in our cash reserves and marketable securities by maintaining a well-diversified portfolio that limits the amount of exposure as to institution, maturity and investment type.
If customer demand subsequently differs from our forecasts, we may be required to record additional charges for excess inventory. Although we believe that the assumptions we use in estimating inventory write-downs are reasonable, no assurance can be given that significant future changes in these assumptions or changes in future events and market conditions could result in different estimates.
Although we believe that the assumptions we use in estimating inventory write-downs are reasonable, no assurance can be given that significant future changes in these assumptions or changes in future events and market conditions could result in different estimates.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In making this determination, under the applicable financial accounting standards, we are allowed to consider the scheduled reversal of deferred tax liabilities, projected future taxable income and the effects of tax planning strategies.
In making this determination, under the applicable financial accounting standards, we are allowed to consider the scheduled reversal of deferred tax liabilities, projected future taxable income and the effects of tax planning strategies.
We believe that our allowance for doubtful accounts was adequate as of December 31, 2022 and 2021. Equity Price Risk Our strategic investment portfolio includes investments in equity securities of certain biotechnology companies.
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 December 31, 2023 and 2022. EQUITY PRICE RISK Our strategic investment portfolio includes investments in equity securities of certain biotechnology companies.
Revenue Recognition We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
Other significant accounting policies are outlined in Note 1, Summary of Significant Accounting Policies , to our consolidated financial statements included in this report. REVENUE RECOGNITION We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
VUMERITY We make royalty payments to Alkermes Pharma Ireland Limited, a subsidiary of Alkermes plc (Alkermes) on worldwide net sales of VUMERITY using a royalty rate of 15.0%, which are recognized as cost of sales in our consolidated statements of income.
QALSODY We make royalty payments to Ionis on annual worldwide net sales of QALSODY using a tiered royalty rate between 11.0% and 15.0%, which are recognized as cost of sales in our consolidated statements of income.
Currently, we believe that the likelihood of Samsung BioLogics failing to make timely payments to us for the amounts due is remote. For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to our consolidated financial statements included in this report.
For additional information on the sale of our equity interest in Samsung Bioepis, please read Note 3, Dispositions , to our consolidated financial statements included in this report.
Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones. If certain clinical and commercial milestones are met, we may pay up to $356.2 million in milestones in 2023 under our current agreements.
Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones.
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.
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 December 31, 2022, we estimate that such hypothetical 100 basis point adverse movement would result in a hypothetical loss in fair value of approximately $11.7 million to our interest rate sensitive instruments.
We also accrue for potential interest and penalties related to unrecognized tax benefits in income tax expense. ITEM 7A.
We also accrue for potential interest and penalties related to unrecognized tax benefits in income tax expense. BUSINESS COMBINATIONS Business combinations are recorded using the acquisition method of accounting.
(2) Obligations are presented net of sublease income expected to be received for our vacated portion of our Weston, MA facility and other facilities throughout the world. (3) In September 2022 we completed the sale of our building and land parcel located at 125 Broadway.
(2) Obligations are presented net of sublease income expected to be received for our vacated portions of our Weston, Massachusetts facility and other facilities throughout the world.
New Accounting Standards For a discussion of new accounting standards please read Note 1, Summary of Significant Accounting Policies, to our consolidated financial statements included in this report. Legal Matters For a discussion of legal matters as of December 31, 2022, please read Note 21, Litigation, to our consolidated financial statements included in this report.
LEGAL MATTERS For a discussion of legal matters as of December 31, 2023, please read Note 21, Litigation, to our consolidated financial statements included in this report. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of our consolidated financial statements, which have been prepared in accordance with U.S.
Our most significant intangible assets are our acquired and in-licensed rights and patents. Acquired and in-licensed rights and patents primarily relate to our acquisition of all remaining rights to TYSABRI. We amortize the intangible assets related to our marketed products using the economic consumption method based on revenue generated from the products underlying the related intangible assets.
We amortize the intangible assets related to our marketed products using the economic consumption method based on revenue generated from the products underlying the related intangible assets.
Payments Due by Period (In millions) Total Less than 1 Year 1 to 3 Years 3 to 5 Years After 5 Years Non-cancellable operating leases (1)(2)(3) $ 364.2 $ 82.7 $ 140.8 $ 110.3 $ 30.4 Long-term debt obligations (4) 10,262.4 232.7 2,197.7 323.7 7,508.3 Purchase and other obligations (5) 917.2 306.7 600.6 1.7 8.2 Defined benefit obligation 90.8 — — — 90.8 Total contractual obligations $ 11,634.6 $ 622.1 $ 2,939.1 $ 435.7 $ 7,637.7 (1) We lease properties and equipment for use in our operations.
Payments Due by Period (In millions) Total Less than 1 Year 1 to 3 Years 3 to 5 Years After 5 Years Non-cancellable operating leases (1)(2)(3) $ 524.6 $ 85.1 $ 152.3 $ 116.7 $ 170.5 Long-term debt obligations (4) 10,756.0 400.3 2,685.5 323.7 7,346.5 Purchase and other obligations (5) 807.7 524.9 277.5 0.8 4.5 Defined benefit obligation 98.0 — — — 98.0 Total contractual obligations $ 12,186.3 $ 1,010.3 $ 3,115.3 $ 441.2 $ 7,619.5 (1) We lease properties and equipment for use in our operations.
Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment. As of December 31, 2022, a 10.0% change in our discounts, contractual adjustments and reserves would have resulted in a decrease of our pre-tax earnings by approximately $338.6 million.
Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.
Significant management judgment is required in assessing the realizability of our deferred tax assets. In performing this assessment, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
In performing this assessment, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
Based on our most recent impairment assessment we incurred impairment charges of approximately $119.6 million and $629.3 million for the years ended December 31, 2022 and 2021, respectively, mainly related to the discontinuation of IPR&D programs. For additional information on our impairments, Note 7, Intangible Assets and Goodwill , to our consolidated financial statements included in this report.
Based on our most recent impairment assessment we incurred impairment charges of approximately $119.6 million for the year ended December 31, 2022, mainly related to the discontinuation of IPR&D programs. For the year ended December 31, 2023, we had no impairment charges.
Inventory At each reporting period we review our inventories for excess or obsolescence and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. The determination of obsolete or excess inventory requires management to make estimates based on assumptions about the future demand of our products, product expiration dates, estimated future sales and our general future plans.
The determination of obsolete or excess inventory requires management to make estimates based on assumptions about the future demand of our products, product expiration dates, estimated future sales and our general future plans. If customer demand subsequently differs from our forecasts, we may be required to record additional charges for excess inventory.
Credit Facility In January 2020 we entered into a $1.0 billion, five-year senior unsecured revolving credit facility under which we are permitted to draw funds for working capital and general corporate purposes. The terms of the revolving credit facility include a financial covenant that requires us not to exceed a maximum consolidated leverage ratio.
As of December 31, 2023, we had $650.0 million outstanding under the 2023 Term Loan, of which $150.0 million was outstanding under the 364-day tranche and $500.0 million was outstanding under the three-year tranche. 2020 REVOLVING CREDIT FACILITY In January 2020 we entered into a $1.0 billion, five-year senior unsecured revolving credit facility under which we are permitted to draw funds for working capital and general corporate purposes.
For additional information on the impairment charges related to our long-lived assets during 2022, 2021 and 2020, please read Note 7, Intangible Assets and Goodwill, to our consolidated financial statements included in this report. Contingent Consideration We record contingent consideration resulting from a business combination at its fair value on the acquisition date.
For additional information on the impairment charges related to our long-lived assets during 2023, 2022 and 2021, please read Note 7, Intangible Assets and Goodwill, to our consolidated financial statements included in this report. INCOME TAXES We prepare and file income tax returns based on our interpretation of each jurisdiction’s tax laws and regulations.
Credit Risk Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments, derivatives and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and investments by investing in a broad and diverse range of financial instruments.
We attempt to minimize the risks related to cash and cash equivalents and investments by investing in a broad and diverse range of financial instruments. We have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity.
(4) Long-term debt obligations are related to our 2015 Senior Notes, our 2020 Senior Notes and our 2021 Exchange Offer Senior Notes, including principal and interest payments.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. (4) Long-term debt obligations are related to our 2015 Senior Notes, our 2020 Senior Notes and our 2021 Exchange Offer Senior Notes, including principal and interest payments, and our 2023 Term Loan.
Critical Accounting Policies and Estimates The preparation of our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP), requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related disclosure of contingent assets and liabilities.
GAAP, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and assumptions.
We have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer.
Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. We minimize credit risk resulting from derivative instruments by choosing only highly rated financial institutions as counterparties.
This includes milestones totaling $225.0 million due to Sage upon the first commercial sale of zuranolone, for the potential treatment of MDD and PPD, in the U.S. Other Funding Commitments As of December 31, 2022, we have several ongoing clinical studies in various clinical trial stages. Our most significant clinical trial expenditures are to CROs.
If certain clinical and commercial milestones are met, we may pay up to approximately $109.0 million in milestones in 2024 under our current agreements. OTHER FUNDING COMMITMENTS As of December 31, 2023, we have several ongoing clinical studies in various clinical trial stages. Our most significant clinical trial expenditures are to CROs.
Share Repurchase Programs In October 2020 our Board of Directors authorized our 2020 Share Repurchase Program, which is a program to repurchase up to $5.0 billion of our common stock. Our 2020 Share Repurchase Program does not have an expiration date. All share repurchases under our 2020 Share Repurc hase 73 Table of Conten ts Program will be retired.
Our 2020 Share Repurchase Program does not have an expiration date. All share repurchases under our 2020 Share Repurc hase Program will be retired.
We continue to monitor these conditions, including the volatility associated with international economies and the relevant financial markets, and assess their possible impact on our business. To date, we have not experienced any significant losses with respect to the collection of our accounts receivable.
We operate in certain countries where weakness in economic conditions, including the effects of the conflict between Russia and Ukraine and the military conflict in the Middle East, 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.
The following table summarizes the fair value of our significant common stock investments: As of December 31, (In millions) 2022 2021 Denali $ 370.2 $ 550.7 Sage 238.0 231.9 Sangamo 74.3 173.7 Ionis 108.6 87.5 $ 791.1 $ 1,043.8 Although the contractual holding period restrictions on our investments in Denali, Sage, Sangamo and Ionis have expired, our ability to liquidate these investments may be limited by the size of our interest, the volume of market related activity, our concentrated level of ownership and potential restrictions resulting from our status as a collaborator.
(2) During 2023 we sold our remaining shares of Ionis common stock. Our ability to liquidate our investments in Denali, Sage and Sangamo may be limited by the size of our interest, the volume of market related activity, our concentrated level of ownership and potential restrictions resulting from our status as a collaborator.
No assurance can be given that the underlying assumptions used to estimate expected project sales, development costs or profitability, or the events associated with such projects, will transpire as estimated. Impairment and Amortization of Long-lived Assets Long-lived assets to be held and used include property, plant and equipment as well as intangible assets, including IPR&D and trademarks.
No assurance can be given that the underlying assumptions used to estimate expected project sales, development costs or profitability, or the events associated with such projects, will transpire as estimated. INVENTORY At each reporting period we review our inventories for excess or obsolescence and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value.
Financing Activities For 2022 compared to 2021, the decrease in net cash flow used in financing activities was primarily due to $1.1 billion in lower share repurchases in 2022, partially offset by $832.2 million in higher debt repayments in 2022. 74 Table of Conten ts Contractual Obligations and Off-Balance Sheet Arrangements Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2022, excluding amounts related to uncertain tax positions, funding commitments, contingent development, regulatory and commercial milestone payments, contingent payments and contingent consideration related to our business combinations, as described below.
As we continue to advance our research and development prioritization efforts, which includes refocusing our investment in gene therapy, we are evaluating several alternative uses for this facility. 85 T able of Contents CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS CONTRACTUAL OBLIGATIONS The following table summarizes our contractual obligations as of December 31, 2023, excluding amounts related to uncertain tax positions, funding commitments, contingent development, regulatory and commercial milestone payments, contingent payments and contingent consideration related to our business combinations, as described below.
In October 2019 we entered into a new supply agreement and amended our license and collaboration agreement with Alkermes for VUMERITY.
Royalties payable on net sales of VUMERITY are subject, under certain circumstances, to tiered minimum annual payment requirements for a period of five years following FDA approval. 86 T able of Contents In October 2019 we entered into a new supply agreement and amended our license and collaboration agreement with Alkermes for VUMERITY.
As of December 31, 2022 and 2021, we had no outstanding borrowings and were in compliance with all covenants under this facility. Working Capital Working capital is defined as current assets less current liabilities. Working capital was $6.5 billion and $3.6 billion as of December 31, 2022 and 2021, respectively.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in this report. LIQUIDITY WORKING CAPITAL Working capital is defined as current assets less current liabilities. Our working capital was $3.4 billion as of December 31, 2023, compared to $6.5 billion as of December 31, 2022.
Capital Expenditures In March 2021 we announced our plans to build a new gene therapy manufacturing facility in RTP, NC to support our gene therapy pipeline across multiple therapeutic areas. The new manufacturing facility will be approximately 197,000 square feet and is expected to be operational by the end of 2023, with an estimated total investment of approximately $195.0 million.
The new manufacturing facility will be approximately 197,000 square feet with an estimated total investment of approximately $195.0 million.
For 2022 compared to 2021, the decrease in net cash flow provided by operating activities was primarily due to lower revenue in 2022, net payments of $917.0 million for a litigation settlement agreement and settlement fees and expenses, timing of payments and higher net income tax payments in 2022.
For 2023 compared to 2022, the change in net cash flow provided by operating activities was driven by changes in operating assets and liabilities primarily related to a lower inventory build in 2023 as compared to 2022, the favorable timing of customer payment receipts in 2023 and the unfavorable timing of U.S. federal tax payments in 2023.
(5) Purchase and other obligations include $558.0 million related to the remaining payments on a one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings (the Transition Toll Tax) and $26.0 million related to the fair value of net liabilities on derivative contracts.
For additional information on our long-term debt obligations, please read Note 13, Indebtedness , to our consolidated financial statements included in this report. (5) Purchase and other obligations include $419.5 million related to the remaining payments on the Transition Toll Tax and $31.6 million related to the fair value of net liabilities on derivative contracts.
Actual results may differ from these estimates. Other significant accounting policies are outlined in Note 1, Summary of Significant Accounting Policies , to our consolidated financial statements included in this report.
We consolidate variable interest entities if we are the primary beneficiary. 87 T able of Contents NEW ACCOUNTING STANDARDS For a discussion of new accounting standards please read Note 1, Summary of Significant Accounting Policies, to our consolidated financial statements included in this report.
Simultaneously, with the close of this transaction we leased back the building for a term of approximately 5.5 years. For additional information on our 125 Broadway sale and leaseback transaction, please read Note 11, Property, Plant and Equipment and Note 12, Leases , to our consolidated financial statements included in this report.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to these consolidated financial statements included in this report.
Investing Activities For 2022 compared to 2021, the increase in net cash flow provided by investing activities was primarily due to proceeds received from the sale of our 49.9% equity interest in Samsung Bioepis of $990.3 million, net of expenses, during the second quarter of 2022 as well as $582.6 million in net proceeds received from the sale of one of our buildings during the third quarter of 2022.
INVESTING ACTIVITIES For 2023 compared to 2022, the change in net cash flow provided by (used in) investing activities was primarily due to a $6.9 billion payment made in 2023 for our acquisition of Reata, net of cash acquired, partially offset by higher net proceeds from the sales of marketable securities in the current period.
Current Assets The increase in total current assets was primarily driven by the following: • net increase in cash, cash equivalents and marketable securities due to net cash flow provided by operating activities of approximately $1,384.3 million; • receipt of approximately $990.3 million in cash, net of expenses, from the sale of our equity interest in Samsung Bioepis; • recording of a receivable from Samsung BioLogics for approximately $798.8 million as part of the sale of our equity interest in Samsung Bioepis; and • cash receipt of approximately $582.6 million related to the sale of one of our buildings.
The changes in total current assets and total current liabilities were primarily driven by the following: CURRENT ASSETS • $3,842.9 million decrease in cash, cash equivalents and current marketable securities primarily due to consideration paid for our acquisition of Reata as well as the early repayment of $350.0 million in outstanding debt obligations associated with our Reata acquisition ; • $235.6 million decrease in other current assets primarily due to the receipt of $812.5 million from Samsung BioLogics related to the sale of Samsung Bioepis, partially offset by the final deferred payment of $437.5 million now due within one year; and • $1,183.0 million increase in inventory primarily due to the fair value step-up adjustment for acquired inventory from our acquisition of Reata.
Removed
Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in this report.
Added
CURRENT LIABILITIES • $88.2 million decrease in accounts payable primarily due to timing of payments; • $102.2 million increase in accrued expense and other primarily reflecting accrued costs related to our acquisition of Reata; and • $150.0 million increase in current portion of debt due to the short-term portion of our outstanding 2023 Term Loan related to our acquisition of Reata.
Removed
The change in cash, cash equivalents and marketable securities at December 31, 2022, from December 31, 2021, was primarily due to net cash flow provided by operating activities, which includes $917.0 million in total net payments for a litigation settlement agreement and settlement fees and expenses, and $990.3 million in net proceeds received from the sale of our equity interest in Samsung Bioepis and $582.6 million in net proceeds received from the sale of one of our buildings, partially offset by $1.0 billion of cash used for the redemption of our 3.625% Senior Notes due September 15, 2022 and $750.0 million used for share repurchases.
Added
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. For additional information on our 2023 Term Loan, please read Note 13, Indebtedness , to our consolidated financial statements included in this report.
Removed
Investments and Other Assets Investments and other assets in our consolidated balance sheet as of December 31, 2021, includes the carrying value of our investment in Samsung Bioepis of $599.9 million. In April 2022 we completed the sale of our 49.9% equity interest in Samsung Bioepis to Samsung BioLogics.
Added
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES As of December 31, 2023, we had cash, cash equivalents and marketable securities totaling approximately $1.0 billion compared to approximately $5.6 billion as of December 31, 2022. The decrease in the balance was primarily due to the use of cash, cash equivalents and marketable securities to fund our acquisition of Reata.
Removed
Under the terms of this transaction, we received approximately $1.0 billion in cash at closing and expect to receive approximately $1.3 billion in cash to be deferred over two payments of approximately $812.5 million due at the first anniversary and approximately $437.5 million due at the second anniversary of the closing of this transaction.
Added
In connection with our acquisition of Reata we paid approximately $6.6 billion for the issued and outstanding shares of Reata and $983.9 million related to Reata's outstanding equity awards, inclusive of employer taxes.
Removed
As part of this transaction, we are also eligible to receive up to an additional $50.0 million upon the achievement of certain commercial milestones.
Added
Additionally, we assumed a payable to Blackstone of approximately $300.0 million related to a one-time contract termination fee to eliminate potential future royalty obligations related to SKYCLARYS, which was triggered as part of the change in control provision under Reata's funding agreement with Blackstone.
Removed
If any payments due to us remain outstanding after the second anniversary of the closing of this transaction, we may elect to receive shares of Samsung BioLogics common stock at a 5.0% discount in lieu of a cash payment for the remaining amount due.

… 50 more changes not shown on this page.

Other BIIB 10-K year-over-year comparisons