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What changed in Biogen's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Biogen's 2023 and 2024 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 2024 report.

+606 added−645 removedSource: 10-K (2025-02-12) vs 10-K (2024-02-14)

Top changes in Biogen's 2024 10-K

606 paragraphs added · 645 removed · 422 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

247 edited+89 added−115 removed281 unchanged
Biggest changeOur current ERNs include: • Parenting Network Group: Biogen's newest ERN provides support, networking and development opportunities to working parents and caregivers, as well as helping employees navigate the challenges of work-life balance. • IGNITE: Brings together early-career professionals and their advocates. • AccessAbility: Supports employees with disabilities and employees who are caretakers of individuals with disabilities. • Biogen Veterans Network: Encourages veterans and allies of veterans to connect and support one another. • Mosaic: Fosters awareness and appreciation of different cultural backgrounds, in addition to promoting networking and development opportunities for members. • ReachOUT: Supports a best-in-class working environment for LGBTQ+ employees and embraces all LGBTQ+ employees and their allies. • Women’s Innovation Network: Creates networking, mentoring and learning opportunities for women and allies worldwide. • ourIMPACT: Advances climate, health and equity at work, in employees' personal lives and in the communities where we live and work.
Biggest changeOur current ERGs include: • AccessAbility: Supports employees with disabilities and employees who are caregivers of individuals with disabilities and their allies. • Biogen Veterans Network: Encourages veterans and allies to connect and support one another. • IGNITE: Brings together early-career professionals and their allies. • Mosaic: Fosters awareness and appreciation of different cultural backgrounds, in addition to promoting networking and development opportunities for employees. • ourIMPACT: Addresses environmental issues at work, in employees' personal lives and in the communities where we live and work. • Parenting Network Group: Provides support, networking and development opportunities to working parents and caregivers, as well as helping employees navigate the challenges of work-life balance. • ReachOUT: Brings together LGBTQ+ employees and their allies. • Women’s Impact Network: Creates networking, mentoring and learning opportunities for women and allies worldwide. 32 Table o f Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS (as of February 12, 2025) Officer Current Position Age Year Joined Biogen Christopher A.
Outside the U.S., other countries have implemented requirements for disclosure of financial interactions with healthcare providers and additional countries may consider or implement such laws. OTHER REGULATIONS FOREIGN ANTI-CORRUPTION We are subject to various federal and foreign laws that govern our international business practices with respect to payments to government officials. Those laws include the U.S.
Outside the U.S., other countries have implemented requirements for disclosure of financial interactions with healthcare providers and additional countries may consider or implement such laws. OTHER LAWS AND REGULATIONS FOREIGN ANTI-CORRUPTION We are subject to various federal and foreign laws that govern our international business practices with respect to payments to government officials. Those laws include the U.S.
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.
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; and • Failure to Gain Market and Patient Acceptance.
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.
If a product which has an ODD 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.
Our patient representatives have access to a suite of financial assistance tools. With those tools, we help patients understand their insurance coverage and, if needed, help patients compare insurance options and programs. In the U.S., we have established programs that provide co-pay assistance or free product for qualified uninsured or underinsured patients, based on specific eligibility criteria.
Our patient support representatives have access to a suite of financial assistance tools. With those tools, we help patients understand their insurance coverage and, if needed, help patients compare insurance options and programs. In the U.S., we have established programs that provide co-pay assistance or free product for qualified uninsured or underinsured patients, based on specific eligibility criteria.
Various laws, regulations and recommendations relating to data privacy and protection, safe working conditions, laboratory practices, the experimental use of animals and the purchase, storage, movement, import, export and use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research work are or may be applicable to our activities.
Laws, regulations and recommendations relating to data privacy and protection, safe working conditions, laboratory practices, the experimental use of animals and the purchase, storage, movement, import, export and use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research work are or may be applicable to our activities.
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.
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 divert 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.
Prior to that, Mr. Viehbacher served as Global CEO of Sanofi, from 2008 to 2014. Prior to joining Sanofi, Mr. Viehbacher spent over 20 years with GlaxoSmithKline in Germany, Canada, France and, latterly, the U.S. as president of its North American pharmaceutical division. Mr. Viehbacher began his career with PricewaterhouseCoopers LLP and qualified as a chartered accountant. Mr.
Viehbacher served as Global CEO of Sanofi, from 2008 to 2014. Prior to joining Sanofi, Mr. Viehbacher spent over 20 years with GlaxoSmithKline in Germany, Canada, France and, latterly, the U.S. as president of its North American pharmaceutical division. Mr. Viehbacher began his career with PricewaterhouseCoopers LLP and qualified as a chartered accountant. Mr.
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.
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.
In other countries, the distribution of our products varies from country to country, including through wholesale distributors of pharmaceutical products and third-party distribution partners who are responsible for most marketing and distribution activities. RITUXAN, RITUXAN HYCELA, GAZYVA, OCREVUS and LUNSUMIO are distributed by the Roche Group and its sublicensees.
In other countries, the distribution of our products varies from country to country, including through wholesale distributors of pharmaceutical products and third-party distribution partners who are responsible for most marketing and distribution activities. RITUXAN, RITUXAN HYCELA, GAZYVA, OCREVUS, LUNSUMIO and COLUMVI are distributed by the Roche Group and its sublicensees.
Relapsed or refractory follicular lymphoma U.S. Relapsed or refractory diffuse large B-cell lymphoma Large B-cell lymphoma arising from follicular lymphoma U.S. 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.
E.U. Relapsed or refractory follicular lymphoma U.S. Relapsed or refractory diffuse large B-cell lymphoma Large B-cell lymphoma arising from follicular lymphoma U.S. 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.
Biosimilar products may face regulatory hurdles or delays due to the evolving and uncertain regulatory and commercial pathway of biosimilars products in certain jurisdictions; • Ability to Provide Adequate Supply. Manufacturing biosimilars is complex. If we encounter any manufacturing or supply chain difficulties we may be unable to meet demand.
Biosimilar products may face regulatory hurdles or delays due to the evolving and uncertain regulatory and commercial pathway of biosimilars products in certain jurisdictions; • Ability to Provide Adequate Supply. Manufacturing biosimilars is complex. If we encounter any persistent manufacturing or supply chain difficulties we may be unable to meet demand.
In addition to risks associated with new product launches and the other factors described in these Risk Factors, Biogen’s and Eisai’s ability to successfully commercialize LEQEMBI and our ability to successfully commercialize SKYCLARYS may be adversely affected due to: • Eisai’s ability to obtain and maintain adequate reimbursement for LEQEMBI; • the effectiveness of Eisai's and Biogen’s commercial strategy for marketing LEQEMBI; • requirements such as participation in a registry and the use of imaging or other diagnostics for LEQEMBI; • our ability to obtain approval in other markets; • the approval of other new products for the same or similar indications; • Eisai’s and Biogen’s ability to maintain a positive reputation among patients, healthcare providers and others in the Alzheimer’s disease community, which may be impacted by pricing and reimbursement decisions relating to LEQEMBI, which are made by Eisai; • Biogen's ability to obtain and maintain adequate reimbursement for SKYCLARYS; and • the effectiveness of Biogen's commercial strategy for marketing SKYCLARYS.
In addition to risks associated with new product launches and the other factors described in these Risk Factors, Biogen’s and Eisai’s ability to successfully commercialize LEQEMBI and our ability to successfully commercialize SKYCLARYS may be adversely affected due to: • Eisai’s ability to obtain and maintain adequate reimbursement for LEQEMBI; • the effectiveness of Eisai's and Biogen’s commercial strategy for marketing LEQEMBI; • requirements such as participation in a registry and the use of imaging or other diagnostics for LEQEMBI; • our ability to obtain approval in other markets; • the approval of other new products for the same or similar indications; • Eisai’s and Biogen’s ability to maintain a positive reputation among patients, healthcare providers and others in the Alzheimer’s disease community, which may be impacted by pricing and reimbursement decisions relating to LEQEMBI, which are made by Eisai and/or third parties; • Biogen's ability to obtain and maintain adequate reimbursement for SKYCLARYS; and • the effectiveness of Biogen's commercial strategy for marketing SKYCLARYS.
Sales of new products or products with additional indications may not meet investor expectations. If we fail to compete effectively, our business and market position would suffer. The biopharmaceutical industry and the markets in which we operate are intensely competitive.
Additionally, sales of new products or products with additional indications may not meet investor expectations. If we fail to compete effectively, our business and market position would suffer. The biopharmaceutical industry and the markets in which we operate are intensely competitive.
Recent developments in the threat landscape include use of AI and machine learning, as well as an increased number of cyber extortion attacks, with higher financial ransom demand amounts and increasing sophistication and variety of ransomware techniques and methodology.
Recent developments in the threat landscape include use of adversarial AI techniques and machine learning, as well as an increased number of cyber extortion attacks, with higher financial ransom demand amounts and increasing sophistication and variety of ransomware techniques and methodology.
Our quarterly revenue, expense and net income (loss) have fluctuated in the past and are likely to fluctuate significantly in the future due to the risks described in these Risk Factors as well as the timing of charges and expense that we may take.
Our quarterly revenue, expense and net income have fluctuated in the past and are likely to fluctuate significantly in the future due to the risks described in these Risk Factors as well as the timing of charges and expense that we may take.
THIRD-PARTY SUPPLIERS AND MANUFACTURERS We principally use third parties to manufacture the active pharmaceutical ingredient and the final product for our small molecule products and product candidates, including TECFIDERA and FUMADERM, and the final drug product for our large molecule products and, to a lesser extent, product candidates.
THIRD-PARTY SUPPLIERS AND MANUFACTURERS We principally use third parties to manufacture the active pharmaceutical ingredient and the final product for our small molecule products and product candidates, including TECFIDERA, VUMERITY and FUMADERM, and the final drug product for our large molecule products and, to a lesser extent, product candidates.
Market success of biosimilar products will be adversely affected if patients, physicians and/or payors do not accept biosimilar products as safe and efficacious products offering a more competitive price or other benefit over existing therapies; and • Competitive Challenges.
Market success of biosimilar products will be adversely affected if patients, physicians and/or payors do not accept biosimilar products as safe and efficacious products offering a more competitive price or other benefit over existing therapies.
ITEM 1. BUSINESS OVERVIEW Biogen is a global biopharmaceutical company focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases worldwide.
ITEM 1. BUSINESS OVERVIEW Biogen is a global biopharmaceutical company focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases.
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.
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, staffing, resources 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.
For additional information on our collaboration with Sage, 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 Sage, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
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.
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.
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.
On August 16, 2022, the IRA was signed into law, 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 up to 10.0% of costs up to the $2,000 cap and up to 20.0% after that cap is reached.
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.
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 protect and enforce any intellectual property rights or 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, 41 Table o f Contents 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.
Priority review may also be granted for any supplement that proposes a labeling change due to studies completed in response to a written request from the FDA for pediatric studies, for an application for a drug that has been designated as a qualified infectious disease product or for any application or supplement for a drug submitted with a priority review voucher.
Priority review may also be granted for any supplement that proposes a labeling change due to studies completed in response to a written request from the FDA for pediatric studies, for an application for a drug that has been designated as a qualified infectious disease product or for any application or supplement for a drug submitted with a PRV.
Education l Harvard School of Public Health, M.P.H. in International Health l University of Mumbai, Doctor of Medicine (M.D.) Jane Grogan, Ph.D. Experience Dr. Grogan has served as our Executive Vice President and Head of Development since September 2023. Dr.
Education l Harvard School of Public Health, M.P.H. in International Health l University of Mumbai, Doctor of Medicine (M.D.) Jane Grogan, Ph.D. Experience Dr. Grogan has served as our Executive Vice President and Head of Development since October 2023. Dr.
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).
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, adverse weather events, power failures, cyber-attacks and many other factors. • Risks Relating to Compliance with current GMP (cGMP).
ORPHAN DRUG ACT Under the U.S. Orphan Drug Act, the FDA may grant orphan drug designation to drugs or biologics intended to treat a “rare disease or condition,” which generally is a disease or condition that affects fewer than 200,000 individuals in the U.S.
ORPHAN DRUG ACT Under the U.S. Orphan Drug Act, the FDA may grant ODD to drugs or biologics intended to treat a “rare disease or condition,” which generally is a disease or condition that affects fewer than 200,000 individuals in the U.S.
General Risk Factors Our effective tax rate fluctuates, and we may incur obligations in tax jurisdictions in excess of accrued amounts. As a global biopharmaceutical company, we are subject to taxation in numerous countries, states and other jurisdictions.
General Risk Factors Our effective tax rate fluctuates, and we may incur obligations in tax jurisdictions in excess of accrued amounts in our financial statements. As a global biopharmaceutical company, we are subject to taxation in numerous countries, states and other jurisdictions.
OTHER Product Indication Collaborator Major Markets Moderate to severe plaque psoriasis None Germany PATIENT SUPPORT AND ACCESS We interact with patients, advocacy organizations and healthcare societies in order to gain insights into unmet needs. The insights gained from these engagements help us support patients with services, programs and applications that are designed to help patients lead better lives.
OTHER Product Indication Collaborator Major Markets Moderate to severe plaque psoriasis None Germany PATIENT SUPPORT AND ACCESS We interact with patients, advocacy organizations and healthcare societies in order to gain insights into unmet needs. The insights gained from these engagements help us support patients with services, programs and applications that are designed to help patients lead fuller, healthier lives.
Patients with active RMS experience an uneven pattern of disease progression characterized by periods of stability that are interrupted by flare-ups of the disease after which the patient may return to a lower baseline of functioning. The MS products we market and our major markets are as follows: Product Indication Collaborator Major Markets RMS in the U.S.
Patients with active RMS experience an uneven pattern of disease progression characterized by periods of stability that are interrupted by flare-ups of the disease after which the patient may return to a lower baseline of functioning. The MS products we market and our major markets are as follows: Product Indication Collaborator Major Markets RMS RRMS in the E.U.
Our employees have varied roles and functions, which is why we empower them to promote a safe working environment, regardless of whether work happens in the lab, in an office or in a manufacturing plant. Our policies and practices are intended to protect not only our employees, but also the surrounding communities where we operate.
Our employees have varied roles and functions, which is why we empower them to promote a safe working environment, regardless of whether work happens in the lab, in an office or in a manufacturing facility. Our EHS policies and practices are intended to protect not only our employees, but also the surrounding communities where we operate.
Although the Solothurn facility was approved by the FDA for ADUHELM and LEQEMBI, there can be no assurance that the regulatory authorities will approve the Solothurn facility for the manufacturing of other products. Additionally, we are building a new gene therapy manufacturing facility in RTP, North Carolina with no assurance that this investment will be fully utilized.
Although the Solothurn facility was approved by the FDA for LEQEMBI, there can be no assurance that the regulatory authorities will approve the Solothurn facility for the manufacturing of other products. Additionally, we are building a new gene therapy, clinical packaging and other manufacturing facility in RTP, North Carolina with no assurance that this investment will be fully utilized.
(1) MS includes TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA. VUMERITY became commercially available in the E.U. during the fourth quarter of 2021. (2) Rare disease includes SPINRAZA, QALSODY, which became commercially available in the U.S. during the second quarter of 2023, and SKYCLARYS, which was obtained as part of our acquisition of Reata in September 2023.
(1) MS includes TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA. (2) Rare disease includes SPINRAZA, QALSODY, which became commercially available in the U.S. during the second quarter of 2023 and commercially available in the E.U. during the second quarter of 2024, and SKYCLARYS, which was obtained as part of our acquisition of Reata in September 2023.
The development of novel approaches for the treatment of diseases, including development efforts in new modalities such as those based on the antisense oligonucleotide platform and gene therapy, may present additional challenges and risks, including obtaining approval from regulatory authorities that have limited experience with the development of such therapies.
The development of novel approaches for the treatment of diseases, including development efforts in new modalities such as those based on the antisense oligonucleotide platform and gene therapy, presents additional challenges and risks, including obtaining approval from regulatory authorities that have limited experience with the development of such therapies.
The severity of SMA correlates with the amount of SMN protein. People with Type 1 SMA, the most severe life-threatening form, produce very little SMN protein and do not achieve the ability to sit without support, and typically do not live beyond two years of age without respiratory support and nutritional interventions.
People with Type 1 SMA, the most severe life-threatening form, produce very little SMN protein and do not achieve the ability to sit without support, and typically do not live beyond two years of age without respiratory support and nutritional interventions.
If we are unable to fully utilize this gene therapy manufacturing facility, charges from excess capacity may occur and would have a negative effect on our financial condition and results of operations. If we are unable to fully utilize our manufacturing facilities, our business may be harmed.
If we are unable to fully utilize this gene therapy, clinical packaging and other manufacturing facility, charges from excess capacity may occur and would have a negative effect on our financial condition and results of operations. If we are unable to fully utilize our manufacturing facilities, our business may be harmed.
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.
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.
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.
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.
Under the centralized procedure, a company submits a single application to the EMA. The marketing authorization application is similar to the NDA or BLA in the U.S. and is evaluated by the CHMP, the expert scientific committee of the EMA responsible for human medicines.
Under the centralized procedure, a company submits a single application to the EMA. The MAA is similar to the NDA or BLA in the U.S. and is evaluated by the CHMP, the expert scientific committee of the EMA responsible for human medicines.
In order to support our future growth and drug development pipeline, we 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. The second manufacturing suite became operational in January 2024.
In order to support our future growth and drug development pipeline, we 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 SWISSMEDIC and was placed into service.
In addition, several U.S. jurisdictions have similar data privacy laws, such as the California Consumer Privacy Act and California Privacy Rights Act. MANUFACTURING We seek to ensure an uninterrupted supply of medicines to patients around the world. To that end, we continually review our manufacturing capacity, capabilities, processes and facilities.
In addition, several U.S. jurisdictions have similar data privacy laws, such as the CCPA and California Privacy Rights Act. MANUFACTURING We seek to ensure an uninterrupted supply of medicines to patients around the world. To that end, we regularly review our manufacturing capacity, capabilities, processes and facilities.
We built a large-scale biologics manufacturing facility and are building a gene therapy manufacturing facility, which will result in the incurrence of significant investment with no assurance that such investment will be recouped.
We built a large-scale biologics manufacturing facility and are building a gene therapy, clinical packaging and other manufacturing facility, which will result in the incurrence of significant investment with no assurance that such investment will be recouped.
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.
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; 48 Table o f Contents • additional complexity in manufacturing or conducting clinical research internationally, including materials manufactured in China or working with CROs 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; • 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 anti-bribery and anti-corruption legislation across the globe, including the U.K.
We also continue to pursue additional patents and patent term extensions in the U.S. and other territories covering various aspects of our products that may, if issued, extend exclusivity beyond the expiration of the patents listed in the table. 13 T able of Contents Product Territory Patent No.
We also continue to pursue additional patents and patent term extensions in the U.S. and other territories covering various aspects of our products that may, if issued, extend exclusivity beyond the expiration of the patents listed in the table. 13 Table o f Contents Product Territory Patent No.
We may face difficulty in attracting and retaining talent for a number of reasons, including management changes, integration related to the Reata acquisition, the underperformance or discontinuation of one or more marketed, pre-clinical or clinical programs, recruitment by competitors or changes in the overall labor market.
We may face difficulty in attracting and retaining talent for a number of reasons, including management changes, integration related to the Reata and HI-Bio acquisitions, the underperformance or discontinuation of one or more marketed, pre-clinical or clinical programs, recruitment by competitors or changes in the overall labor market.
If we determine that the fair value of any of our owned properties is lower than their book value, we may not realize the full investment in these properties and incur significant impairment charges or additional depreciation when the expected useful lives of certain assets have been shortened due to the anticipated closing of facilities.
If we determine that the fair value of any of our owned properties is lower than their book value, we may not realize the full investment in these properties and incur significant 50 Table o f Contents impairment charges or additional depreciation when the expected useful lives of certain assets have been shortened due to the anticipated closing of facilities.
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.
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.
If these third-parties fail to perform successfully, or reduce their third party manufacturing production, our biosimilar product development or commercialization of biosimilar products could be delayed, revenue from biosimilar products could decline and/or we may not realize the anticipated benefits of these arrangements; • Regulatory Compliance.
If these third-parties fail to perform successfully, or reduce their third party manufacturing production, our biosimilar product development or commercialization of biosimilar products could be delayed, revenue from biosimilar products could decline and/or we may not realize the anticipated benefits of these arrangements; • Competitive Challenges.
Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our products or manufacturing facilities, we may need to close our manufacturing facilities for an extended period of time to investigate and remediate the contaminant.
Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered 46 Table o f Contents in our products or manufacturing facilities, we may need to close our manufacturing facilities for an extended period of time to investigate and remediate the contaminant.
FDA regulatory review may result in denial or modification of the planned changes, or requirements to conduct additional tests or evaluations that can substantially delay or increase the cost of the planned changes. REGULATION OF PRODUCT ADVERTISING AND PROMOTION The FDA regulates all advertising and promotion activities and communications for products under its jurisdiction both before and after approval.
FDA regulatory review may result in denial or modification of the planned changes, or requirements to conduct additional tests or evaluations that can substantially delay or increase the cost of the planned changes. 22 Table o f Contents REGULATION OF PRODUCT ADVERTISING AND PROMOTION The FDA regulates all advertising and promotion activities and communications for products under its jurisdiction both before and after approval.
Raw materials, delivery devices, such as syringes and auto-injectors, and other supplies required for the production of our products and product candidates are procured from various third-party suppliers and manufacturers in quantities adequate to meet our needs. Continuity of supply of such raw materials, devices and supplies is assured through inventory management and dual sourcing as appropriate.
Raw materials, delivery devices, such as syringes and auto-injectors, and other supplies required for the production of our products and product candidates are procured from various third-party suppliers and manufacturers in quantities adequate to meet our needs. We endeavor to assure continuity of supply of such raw materials, devices and supplies through inventory management and dual sourcing as appropriate.
Regulatory authorities may grant marketing approval that is more restricted than anticipated, including limiting indications to narrow patient populations and the imposition of safety monitoring, educational requirements, requiring confirmatory trials and risk evaluation and mitigation strategies.
Regulatory authorities have in the past and may in the future grant marketing approval that is more restricted than anticipated, including limiting indications to narrow patient populations and the imposition of safety monitoring, educational requirements, requiring confirmatory trials and risk evaluation and mitigation strategies.
As a result, our effective tax rate is derived from a combination of applicable tax rates, including 53 T able of Contents withholding taxes, in the various places that we operate. In preparing our financial statements, we estimate the amount of tax that will become payable in each of such places.
As a result, our effective tax rate is derived from a combination of applicable tax rates, including withholding taxes, in the various places that we operate. In preparing our financial statements, we estimate the amount of tax that will become payable in each of such places.
If we do not obtain appropriate permits, including permits for sufficient quantities of water and wastewater, we could incur significant costs and limits on our manufacturing volumes that could harm our business. Additionally, regulators are considering new environmental disclosure rules.
If we do not obtain appropriate permits, including permits for sufficient quantities of water and wastewater, we could incur significant costs and limits on our manufacturing volumes that could harm our business. Additionally, regulators have passed new environmental disclosure rules.
People with Type 2 and Type 3 SMA produce greater amounts of SMN protein and have less severe, but still life-altering, forms of SMA. FA is an inherited, debilitating and degenerative neuromuscular disorder that is typically diagnosed during adolescence and can ultimately lead to premature death.
People with Type 2 and Type 3 SMA produce greater amounts of SMN protein and have less severe, but still life-altering, forms of SMA. 8 Table o f Contents FA is an inherited, debilitating and degenerative neuromuscular disorder that is typically diagnosed during adolescence and can ultimately lead to premature death.
We and our third-party providers are generally required to maintain compliance with cGMP and other stringent requirements and are subject to inspections by the FDA and other regulatory authorities to confirm compliance.
We and our third-party providers are required to maintain compliance with cGMP and other stringent requirements, as applicable, and are subject to inspections by the FDA and other regulatory authorities to confirm compliance.
Among other things, we provide customer service and other related programs for our products, such as disease and product specific websites, insurance research services, financial assistance programs and the facilitation of the procurement of our marketed products. 11 T able of Contents We are dedicated to helping patients obtain access to our therapies.
Among other things, we provide customer service and other related programs for our products, such as disease and product specific websites, insurance research services, financial assistance programs and the facilitation of the procurement of our marketed products. 11 Table o f Contents We are dedicated to helping patients obtain access to our therapies.
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.
Identified climate-related material risks and opportunities are reported to our ERM team, which reports to our ERM Committee with oversight by our Board of Directors. We endeavor to 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.
These measures have negatively impacted our revenue and may continue to adversely affect our revenue and results of operations in the future. Our success in commercializing biosimilars is subject to risks and uncertainties inherent in the development, manufacture and commercialization of biosimilars. If we are unsuccessful in such activities, our business may be adversely affected.
These measures have negatively impacted our revenue and may continue to adversely affect our revenue and results of operations in the future. 42 Table o f Contents Our success in commercializing biosimilars is subject to risks and uncertainties inherent in the development, manufacture and commercialization of biosimilars. If we are unsuccessful in such activities, our business may be adversely affected.
Risks relating to compliance with laws and regulations may be heightened as we continue to expand our global operations and enter new therapeutic areas with different patient populations, which may have different product distribution methods, marketing programs or patient assistance programs from those we currently utilize or support.
Risks relating to compliance with laws and regulations may be heightened as we continue to expand our global operations and enter new therapeutic areas with different patient populations, which 47 Table o f Contents may have different product distribution methods, marketing programs or patient assistance programs from those we currently utilize or support.
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. 9 T able of Contents BIOSIMILARS Biosimilars are a group of biologic medicines that are highly similar to currently available biologic therapies developed by companies known as "originators".
Germany 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. 9 Table o f Contents BIOSIMILARS Biosimilars are a group of biologic medicines that are highly similar to currently available biologic therapies developed by companies known as "originators".
Risk Factors included in this report, and the discussion of legal proceedings related to certain patents described above is set forth in Note 21, Litigation, to our consolidated financial statements included in this report. 16 T able of Contents COMPETITION Competition in the biopharmaceutical industry and the markets in which we operate is intense.
Risk Factors included in this report, and the discussion of legal proceedings related to certain patents described above is set forth in Note 21, Litigation, to our consolidated financial statements included in this report. 16 Table o f Contents COMPETITION Competition in the biopharmaceutical industry and the markets in which we operate is intense.
Breakdowns, invasions, corruptions, destructions and/or breaches, which impact may include, but not limited to, comprising the capacity, reliability or security of our information systems or those of our business partners, including our cloud tech nologies, and/or unauthorized access to our data and information could subject us to significant liability, negatively impact our business operations, and/or require replacement of technology and/or sizeable ransom payments.
Breakdowns, invasions, corruptions, destructions and/or breaches, which may include impacts such as, but not limited to, comprising the capacity, reliability or security of our information systems or those of our business partners, including our cloud technologies, and/or unauthorized access to our data and information could subject us to significant liability, negatively impact our business operations, and/or require replacement of technology and/or sizeable ransom payments.
Furthermore, factors such as geopolitical events, global health outbreaks, weather events, labor or raw material shortages and other supply chain disruptions could result in difficulties and delays in manufacturing our products, which could have an adverse impact on our results in operations or result in product shortages.
Furthermore, factors such as geopolitical events, global health outbreaks, adverse weather events, labor or raw material shortages, imposition of tariffs or trade restrictions and other supply chain disruptions could result in difficulties and delays in manufacturing our products, which could have an adverse impact on our results in operations or result in product shortages.
Third-parties might illegally distribute and sell counterfeit or unfit versions of our products, which do not meet our rigorous manufacturing, distribution and testing standards. A patient who receives a counterfeit or unfit drug may be at risk for a number of dangerous health consequences.
Third-parties might illegally distribute and sell counterfeit or unfit versions of our products, which do not meet our rigorous manufacturing, distribution and testing standards. A patient who receives a counterfeit or unfit drug may be 49 Table o f Contents at risk for a number of dangerous health consequences.
The agency may require the sponsor of a BLA or NDA to conduct additional clinical studies or to provide other scientific or technical information about the product, and these additional requirements may lead to 22 T able of Contents unanticipated delays or expenses.
The agency may require the sponsor of a BLA or NDA to conduct additional clinical studies or to provide other scientific or technical information about the product, and these additional requirements may lead to unanticipated delays or expenses.
Purchasers eligible for discounts include hospitals that serve a disproportionate share of financially needy patients, community health clinics and 27 T able of Contents other entities that receive certain types of grants under the PHS Act.
Purchasers eligible for discounts include hospitals that serve a disproportionate share of financially needy patients, community health clinics and other entities that receive certain types of grants under the PHS Act.
Under the FDA's accelerated approval regulations, if the FDA concludes that a drug that has been shown to be effective can be safely used only if distribution or use is restricted, it may require certain post-marketing restrictions to assure safe use.
Under the FDA's accelerated approval regulations, if the FDA 21 Table o f Contents concludes that a drug that has been shown to be effective can be safely used only if distribution or use is restricted, it may require certain post-marketing restrictions to assure safe use.
In addition, if we fail to provide information timely or we are found to have knowingly submitted false information to the government, the statute governing the Medicaid Drug Rebate Program provides for civil monetary penalties. • Medicare : Medicare is a federal program that is administered by the federal government.
In addition, if we fail to provide information timely or we are found to have knowingly submitted false information to the government, the statute governing the Medicaid Drug Rebate Program provides for civil monetary penalties. 25 Table o f Contents • Medicare : Medicare is a federal program that is administered by the federal government.
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.
Furthermore, the approval of a product candidate by one regulatory agency does not mean that other regulatory agencies will also approve such product candidate. 38 Table o f Contents Success in preclinical work or early-stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful.
Upon a change in control, some of these provisions could trigger reduced milestone, profit or royalty payments to us or give our collaboration partner rights to terminate our collaboration agreement, acquire operational control or force the purchase or sale of the programs that are the subject of the collaboration.
Upon a change in control, some of these provisions could trigger reduced milestone, profit or royalty 51 Table o f Contents payments to us or give our collaboration partner rights to terminate our collaboration agreement, acquire operational control or force the purchase or sale of the programs that are the subject of the collaboration.
Our Rare disease products and major markets are as follows: Product Indication Collaborator Major Markets SMA Ionis U.S. Brazil Canada China France Germany Italy Japan Spain Turkey ALS in adults with SOD1 gene Ionis U.S. FA in adults and adolescents aged 16 years and older None U.S.
Our Rare disease products and major markets are as follows: Product Indication Collaborator Major Markets SMA Ionis U.S. Brazil France Germany Italy Turkey FA in adults and adolescents aged 16 years and older None U.S. France Germany ALS in adults with mutation in SOD1 gene Ionis U.S.
Our current biosimilar products and major markets are as follows: Product Indication Major Markets Rheumatoid arthritis Juvenile idiopathic arthritis Psoriatic arthritis Axial spondyloarthritis Plaque psoriasis Paediatric plaque psoriasis France Germany Italy Spain U.K.
Our current biosimilar products and major markets are as follows: Product Indication Collaborator Major Markets Rheumatoid arthritis Juvenile idiopathic arthritis Psoriatic arthritis Axial spondyloarthritis Plaque psoriasis Paediatric plaque psoriasis Samsung Bioepis France Germany Italy Spain Sweden U.K.
Our product sales to two wholesale distributors each accounted for more than 10.0% of our total revenue for the years ended December 31, 2023, 2022 and 2021, and on a combined basis, accounted for approximately 36.9%, 37.9% and 38.9%, respectively, of our gross product revenue.
Our product sales to two wholesale distributors each accounted for more than 10.0% of our total revenue for the years ended December 31, 2024, 2023 and 2022, and on a combined basis, accounted for approximately 39.3%, 36.9% and 37.9%, respectively, of our gross product revenue.
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.
In addition, we are committed to providing flexible benefits designed to allow our 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.
Prior to that, Ms. Alexander was a partner at the law firms of Hinckley, Allen & Snyder and Fine & Ambrogne. Education l Wellesley College, B.A. l Boston University School of Law, J.D. 35 T able of Contents Michael R. McDonnell Experience Mr. McDonnell has served as our Executive Vice President and Chief Financial Officer since August 2020.
Prior to that, Ms. Alexander was a partner at the law firms of Hinckley, Allen & Snyder and Fine & Ambrogne. Education l Wellesley College, B.A. l Boston University School of Law, J.D. 33 Table o f Contents Michael R. McDonnell Experience Mr. McDonnell has served as our Executive Vice President and Chief Financial Officer since August 2020.
We commercialize a portfolio of biosimilars of advanced biologics including BENEPALI, an etanercept biosimilar referencing ENBREL, IMRALDI, an adalimumab biosimilar referencing HUMIRA, and FLIXABI, an infliximab biosimilar referencing REMICADE, in certain countries in Europe, as well as BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, in the U.S. and certain international markets.
We commercialize a portfolio of biosimilars of advanced biologics including: BENEPALI, an etanercept biosimilar referencing ENBREL; IMRALDI, an adalimumab biosimilar referencing HUMIRA; FLIXABI, an infliximab biosimilar referencing REMICADE; and BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, in certain international markets, as well as TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA, in the U.S. and certain international markets.
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.
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 under Section 340B of the Public Health Service Act and similar state legislation.
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 40 Table o f Contents countries and using those reference prices to set a price).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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.
Biggest changePRODUCT REVENUE Product revenue is summarized as follows: For the Years Ended December 31, % Change $ Change 2024 vs. 2023 2023 vs. 2022 2024 vs. 2023 2023 vs. 2022 (In millions, except percentages) 2024 2023 2022 Multiple Sclerosis $ 4,349.8 $ 4,661.9 $ 5,430.2 (6.7) % (14.1) % $ (312.1) $ (768.3) Rare disease 1,988.1 1,803.0 1,793.5 10.3 0.5 185.1 9.5 Biosimilars 793.1 770.0 751.1 3.0 2.5 23.1 18.9 Other (1) 82.5 11.8 13.0 599.2 (9.2) 70.7 (1.2) Total product revenue, net $ 7,213.5 $ 7,246.7 $ 7,987.8 (0.5) % (9.3) % $ (33.2) $ (741.1) (1) Other includes FUMADERM, ADUHELM and ZURZUVAE, which became commercially available in the U.S. during the fourth quarter of 2023. 64 Table o f Contents MULTIPLE SCLEROSIS • Global TYSABRI revenue decreased $161.9 million, from $1,876.9 million in 2023 to $1,715.0 million in 2024, or 8.6%, primarily due to increased competition and a decrease in pricing in rest of world TYSABRI. • Global TECFIDERA revenue decreased $45.4 million, from $1,012.5 million in 2023 to $967.1 million in 2024, or 4.5%, 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 $137.7 million, from $1,105.7 million in 2023 to $968.0 million in 2024, or 12.5%, driven by a decrease is demand as patients transition to higher efficacy therapies. • Global VUMERITY revenue increased $51.7 million, from $576.3 million in 2023 to $628.0 million in 2024, or 9.0%, primarily due to an increase in global demand.
Factors such as global health outbreaks, adverse weather events, geopolitical events, inflation, 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.
Factors such as global health outbreaks, adverse weather events, geopolitical events, tariffs, inflation, 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.
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.
The IRA did not result in any material adjustments to our income tax provision or other income tax balances as of December 31, 2024 and 2023. Preliminary guidance has been issued by the IRS and we expect additional guidance and regulations to be issued in future periods.
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.
ROYALTY REVENUE ON SALES OF OCREVUS For 2024 compared to 2023, 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 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.
For additional information on the 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.
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.
Item 1A. Risk Factors, included in this report. TECFIDERA Multiple TECFIDERA generic entrants are now in North America, Brazil and certain European 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.
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.
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 U.S.
Revenue generated from sales in Russia and Ukraine represent less than 2.0% of total revenue for the years ended December 31, 2023, 2022 and 2021. Revenue generated from sales in the broader Middle East region represents less than 2.0% of total revenue for the years ended December 31, 2023, 2022 and 2021.
Revenue generated from sales in Russia and Ukraine represent less than 2.0% of total revenue for the years ended December 31, 2024, 2023 and 2022. Additionally, revenue generated from sales in the broader Middle East region represents less than 2.0% of total revenue for the years ended December 31, 2024, 2023 and 2022.
For 2023 compared to 2022, the increase in contract manufacturing revenue was primarily driven by higher volumes due to the timing of batch production, which includes batches related to LEQEMBI that we began recognizing in the first quarter of 2023 upon the accelerated approval of LEQEMBI in the U.S.
For 2024 compared to 2023, the decrease in contract manufacturing revenue was primarily driven by higher volumes in 2023 due to the timing of batch production, which includes batches related to LEQEMBI that we began recognizing in the first quarter of 2023 upon the accelerated approval of LEQEMBI in the U.S.
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.
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. 68 Table o f 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 collaborative arrangements with Samsung Bioepis, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.
For additional information on our collaboration and license arrangements with Samsung Bioepis and Sage, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
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 a result, we recorded a net gain on the deconsolidation of Neurimmune of approximately $3.0 million, which was recorded in other (income) expense, net within our consolidated statements of income for the year ended December 31, 2023.
The Fit for Growth program is expected to generate approximately $1.0 billion in gross operating expense savings and $800.0 million in net operating expense savings by 2025, some of which will be reinvested in various initiatives.
The Fit for Growth program is expected to generate approximately $1.0 billion in gross operating expense savings by the end of 2025, some of which will be reinvested in various initiatives.
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%.
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) 2024 2023 2022 Product revenue, net $ 1,531.0 $ 1,581.3 $ 1,729.2 Cost and expense 404.1 419.9 253.6 Pre-tax profits in the U.S. $ 1,126.9 $ 1,161.4 $ 1,475.6 Biogen's share of pre-tax profits $ 392.0 $ 409.4 $ 547.0 For 2024 compared to 2023, the decrease in U.S. product revenue, net was primarily due to a decrease in sales volumes of RITUXAN in the U.S. of 7.9%, resulting from competition from multiple biosimilar products, partially offset by an increase in sales volumes of GAZYVA of 11.8%.
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.
Our costs reflect our share of the total costs incurred. • 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.
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.
NET (GAINS) LOSSES IN EQUITY SECURITIES For the year ended December 31, 2024, net unrealized losses and realized gains on our holdings in equity securities were approximately $102.4 million and $2.0 million, respectively, compared to net unrealized and realized losses of approximately $270.0 million and $5.2 million, respectively, in 2023. • The net unrealized losses recognized during the year ended December 31, 2024, primarily reflect a decrease in the aggregate fair value of our investments in Sage common stock of approximately $101.4 million, partially offset by an increase in the fair value of Denali and Sangamo common stock of approximately $7.5 million. • 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.
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 additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions , 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. Risk Factors and
INCOME TAX PROVISION For the Years Ended December 31, (In millions, except percentages) 2023 2022 2021 Income before income tax (benefit) expense $ 1,296.8 $ 3,591.8 $ 1,745.2 Income tax (benefit) expense 135.3 632.8 52.5 Effective tax rate 10.4 % 17.6 % 3.0 % Our effective tax rate fluctuates from year to year due to the global nature of our operations.
INCOME TAX PROVISION For the Years Ended December 31, (In millions, except percentages) 2024 2023 2022 Income before income tax (benefit) expense $ 1,906.0 $ 1,296.8 $ 3,591.8 Income tax (benefit) expense 273.8 135.3 632.8 Effective tax rate 14.4 % 10.4 % 17.6 % Our effective tax rate fluctuates from year to year due to the global nature of our operations.
For the Years Ended December 31, (In millions) 2023 2022 2021 Royalty revenue on sales of OCREVUS $ 1,266.2 $ 1,136.3 $ 991.7 Biogen’s share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO (1) 409.4 547.0 647.7 Other revenue from anti-CD20 therapeutic programs 14.0 17.2 19.1 Total revenue from anti-CD20 therapeutic programs $ 1,689.6 $ 1,700.5 $ 1,658.5 (1) LUNSUMIO became commercially available in the U.S. during the first quarter of 2023.
For the Years Ended December 31, (In millions) 2024 2023 2022 Royalty revenue on sales of OCREVUS $ 1,339.5 $ 1,266.2 $ 1,136.3 Biogen’s share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO (1) 392.0 409.4 547.0 Other revenue from anti-CD20 therapeutic programs 18.4 14.0 17.2 Total revenue from anti-CD20 therapeutic programs $ 1,749.9 $ 1,689.6 $ 1,700.5 (1) LUNSUMIO became commercially available in the U.S. during the first quarter of 2023.
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.
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.
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 300 Binney Street lease modification, please read Note 12, Leases , to our consolidated financial statements included in this report.
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.
LATE STAGE PROGRAMS 2024 vs. 2023 The decrease in late stage programs was driven by a decrease in costs associated with: • 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.; • advancement of TOFIDENCE from late stage to marketed upon the approval of TOFIDENCE in the U.S.; and • discontinuation of BIIB093 for LHI.
Additionally, global disputes and interruptions in international relationships, including tariffs, trade protection measures, import or export licensing requirements and the imposition of trade sanctions or similar restrictions by the U.S. or other governments, affect our ability to do business.
GEOPOLITICAL TENSIONS Global disputes and interruptions in international relationships, including tariffs, trade protection measures, import or export licensing requirements and the imposition of trade sanctions or similar restrictions, affect our ability to do business.
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.
For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions , 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.
CONTRACT MANUFACTURING, ROYALTY AND OTHER REVENUE Contract manufacturing, royalty and other revenue is summarized as follows: For the Years Ended December 31, (In millions) 2023 2022 2021 Contract manufacturing revenue $ 848.2 $ 417.7 $ 427.7 Royalty and other revenue 51.1 67.4 48.6 Total contract manufacturing, royalty and other revenue $ 899.3 $ 485.1 $ 476.3 CONTRACT MANUFACTURING REVENUE We record contract manufacturing revenue primarily from amounts earned under contract manufacturing agreements with our strategic customers.
CONTRACT MANUFACTURING, ROYALTY AND OTHER REVENUE Contract manufacturing, royalty and other revenue is summarized as follows: For the Years Ended December 31, (In millions) 2024 2023 2022 Contract manufacturing revenue $ 592.1 $ 848.2 $ 417.7 Royalty and other revenue 60.5 51.1 67.4 Total contract manufacturing, royalty and other revenue $ 652.6 $ 899.3 $ 485.1 CONTRACT MANUFACTURING REVENUE Contract manufacturing revenue primarily reflects amounts earned under contract manufacturing agreements with our strategic customers.
In November 2023 we notified Neurimmune of our decision to terminate the Neurimmune Agreement. Subsequent to the termination, we reconsidered our relationship with Neurimmune and determined that we were no longer the primary beneficiary of the variable interest entity.
Subsequent to the termination, we reconsidered our relationship with Neurimmune and determined that we were no longer the primary beneficiary of the variable interest entity.
As part of the 2020 sale of our Hillerød, Denmark manufacturing operations to FUJIFILM, we provided FUJIFILM with certain minimum batch production commitment guarantees, including batches related to our contract manufacturing arrangements.
In addition, as part of the 2020 sale of our Hillerød, Denmark manufacturing operations to FUJIFILM, we provided FUJIFILM with certain minimum batch production commitment guarantees, including batches related to our contract manufacturing arrangements. These batch commitments were satisfied as of December 31, 2023.
This fair value step-up adjustment will be amortized to cost of sales within our consolidated statements of income when the inventory is sold, which is expected to be within approximately 3 years from the acquisition date.
This fair value step-up adjustment is being amortized to cost of sales within our consolidated statements of income as the inventory is sold, which is expected to be sold over a period of approximately 4 years from the acquisition date.
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.
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 2025 sales. In addition, one of our contract manufacturers for IMRALDI and BENEPALI was acquired by a third party in December 2024.
For the year ended December 31, 2023, amortization from the fair value step-up adjustment as a result of inventory sold during the fourth quarter was approximately $31.5 million. For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.
For the years ended December 31, 2024 and 2023, amortization from the fair value step-up adjustment was approximately $181.5 million and $31.5 million, respectively. For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.
SKYCLARYS revenue was $55.9 million in 2023, which we began recognizing during the fourth quarter of 2023, subsequent to our acquisition of Reata. Rare disease revenue includes sales from SPINRAZA, QALSODY, which became commercially available in the U.S. during the second quarter of 2023, and SKYCLARYS (omaveloxolone), which was obtained as part of our acquisition of Reata in September 2023.
Rare disease revenue includes sales from SPINRAZA, QALSODY, which became commercially available in the U.S. during the second quarter of 2023 and commercially available in the E.U. during the second quarter of 2024, and SKYCLARYS, which was obtained as part of our acquisition of Reata in September 2023.
Prior to regulatory approval, we record our share of the expense incurred by the collaboration for the development of anti-CD20 products in research and development expense and pre-commercialization costs within selling, general and administrative expense in our consolidated statements of income.
In April 2023 our pre-tax profit share for RITUXAN, GAZYVA and LUNSUMIO decreased from 37.5% to 35.0%. Prior to regulatory approval, we record our share of the expense incurred by the collaboration for the development of anti-CD20 products in research and development expense and pre-commercialization costs within selling, general and administrative expense in our consolidated statements of income.
Additionally, we incurred transaction and integration-related expense of approximately $34.6 million related to this acquisition.
Additionally, we incurred transaction and integration-related expense of approximately $3.6 million related to our acquisition of HI-Bio.
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 acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.
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.
For additional information on our revenue reserves, please read Note 5, Revenue, to our consolidated financial statements included in this report. 70 Table o f Contents COST AND EXPENSE A summary of total cost and expense is as follows: For the Years Ended December 31, % Change $ Change 2024 vs. 2023 2023 vs. 2022 2024 vs. 2023 2023 vs. 2022 (In millions, except percentages) 2024 2023 2022 Cost of sales, excluding amortization and impairment of acquired intangible assets $ 2,310.4 $ 2,533.4 $ 2,278.3 (8.8) % 11.2 % $ (223.0) $ 255.1 Research and development 2,041.8 2,462.0 2,231.1 (17.1) 10.3 (420.2) 230.9 Selling, general and administrative 2,403.7 2,549.7 2,403.6 (5.7) 6.1 (146.0) 146.1 Amortization and impairment of acquired intangible assets 446.7 240.6 365.9 85.7 (34.2) 206.1 (125.3) Collaboration profit sharing/(loss reimbursement) 254.4 218.8 (7.4) 16.3 nm 35.6 226.2 (Gain) loss on fair value remeasurement of contingent consideration 27.7 — (209.1) nm nm 27.7 209.1 Restructuring charges 30.2 218.8 131.1 (86.2) 66.9 (188.6) 87.7 Gain on sale of priority review voucher, net (88.6) — — nm — (88.6) — Gain on sale of building, net — — (503.7) — nm — 503.7 Other (income) expense, net 343.6 315.5 (108.2) 8.9 (391.6) 28.1 423.7 Total cost and expense $ 7,769.9 $ 8,538.8 $ 6,581.6 (9.0) % 29.7 % $ (768.9) $ 1,957.2 nm Not meaningful COST OF SALES, EXCLUDING AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS For the Years Ended December 31, (In millions) 2024 2023 2022 Product $ 1,604.2 $ 1,787.2 $ 1,504.8 Royalty 706.2 746.2 773.5 Total cost of sales $ 2,310.4 $ 2,533.4 $ 2,278.3 Cost of sales, as a percentage of total revenue, were 23.9%, 25.8% and 22.4% for the years ended December 31, 2024, 2023 and 2022, respectively.
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.
The decrease was partially offset by an increase in costs associated with: • advancement of BIIB059 for the treatment of CLE into late stage; and • development of BIIB059 for the treatment of SLE.
SKYCLARYS became commercially available in the U.S. during the second quarter of 2023 and we began recognizing revenue from SKYCLARYS in the U.S. during the fourth quarter of 2023, subsequent to our acquisition of Reata. In February 2024 the EC approved SKYCLARYS in the E.U. for the treatment of FA in adults and adolescents aged 16 years and older.
SKYCLARYS became commercially available in the U.S. during the second quarter of 2023 and we began recognizing revenue from SKYCLARYS in the U.S. during the fourth quarter of 2023, subsequent to our acquisition of Reata. SKYCLARYS was also approved in the E.U. and became commercially available during the first quarter of 2024.
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.
ROYALTY AND OTHER REVENUE Royalty and other revenue primarily reflects royalty revenue on biosimilar products from our license arrangements with Samsung Bioepis and royalties we receive from net sales on products related to patents that we have out-licensed.
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.
After evaluating our strategic options, we have made the decision to retain our biosimilars business. 67 Table o f 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.
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.
For additional information on our acquisitions of Reata and HI-Bio, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. 73 Table o f Contents SELLING, GENERAL AND ADMINISTRATIVE For 2024 compared to 2023, selling, general and administrative expense decreased by approximately 5.7% primarily due to equity-based compensation expense recognized in 2023 of approximately $196.4 million related to our acquisition of Reata.
Total charges incurred from our 2023 cost saving initiatives are summarized as follows: For the Years Ended December 31, 2023 (In millions) Severance Costs Accelerated Depreciation and Other Costs Total Selling, general and administrative $ — $ 23.3 $ 23.3 Research and development — 1.2 1.2 Restructuring charges 153.4 34.6 188.0 Total charges $ 153.4 $ 59.1 $ 212.5 Other Costs: includes costs associated with items such as asset abandonment and write-offs, facility closure costs, pretax gains and losses resulting from the termination of certain leases, employee non-severance expense, consulting fees and other costs.
Total charges incurred from our 2023 Fit for Growth program are summarized as follows: For the Years Ended December 31, 2024 2023 (In millions) Severance Costs Accelerated Depreciation and Other Costs Total Severance Costs Accelerated Depreciation and Other Costs Total Selling, general and administrative $ — $ 13.8 $ 13.8 $ — $ 23.3 $ 23.3 Research and development — 11.7 11.7 — 1.2 1.2 Restructuring charges 24.2 — 24.2 153.4 34.6 188.0 Total charges $ 24.2 $ 25.5 $ 49.7 $ 153.4 $ 59.1 $ 212.5 Other Costs: includes costs associated with items such as asset abandonment and write-offs, facility closure costs, pretax gains and losses resulting from the termination of certain leases, employee non-severance expense, consulting fees and other costs. 75 Table o f Contents REATA INTEGRATION Following the close of our Reata acquisition in September 2023, we implemented an integration plan designed to realize operating synergies through cost savings and avoidance.
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.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Our financial condition is summarized as follows: As of December 31, (In millions, except percentages) 2024 2023 % Change $ Change Financial assets: Cash and cash equivalents $ 2,375.0 $ 1,049.9 126.2 % $ 1,325.1 Total cash and cash equivalents $ 2,375.0 $ 1,049.9 126.2 % $ 1,325.1 Borrowings: Current portion of notes payable and term loan $ 1,748.6 $ 150.0 nm $ 1,598.6 Notes payable and term loan 4,547.2 6,788.2 (33.0) (2,241.0) Total borrowings $ 6,295.8 $ 6,938.2 (9.3) % $ (642.4) Working Capital: Current assets $ 7,456.8 $ 6,859.3 8.7 % $ 597.5 Current liabilities (5,528.8) (3,434.3) 61.0 (2,094.5) Total working capital $ 1,928.0 $ 3,425.0 (43.7) % $ (1,497.0) 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.
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.
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.
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.
Reserves for discounts, contractual adjustments and returns that reduced gross product revenue are summarized as follows: For the Years Ended December 31, (In millions) 2024 2023 2022 Contractual adjustments $ 2,648.8 $ 2,681.7 $ 2,716.9 Discounts 832.2 735.2 663.9 Returns 37.8 38.2 5.1 Total discounts and allowances $ 3,518.8 $ 3,455.1 $ 3,385.9 For the years ended December 31, 2024, 2023 and 2022, reserves for discounts and allowances as a percentage of gross product revenue were 32.6%, 32.0% and 30.1%, respectively.
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.
ROYALTY COST OF SALES For 2024 compared to 2023 , the decrease in royalty cost of sales was primarily due to lower royalties payable associated with lower sales of SPINRAZA and TYSABRI, partially offset by higher royalties payable associated with higher sales of SKYCLARYS. 71 Table o f Contents RESEARCH AND DEVELOPMENT Research and development expense, as a percentage of total revenue, was 21.1%, 25.0% and 21.9% for the years ended December 31, 2024, 2023 and 2022, respectively.
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 the years ended December 31, 2024 and 2023, we recognized net profit-sharing expense of approximately $27.0 million and net loss reimbursement of approximately $4.7 million, respectively, to reflect Sage's 50.0% share of net collaboration results in the U.S. for ZURZUVAE for PPD.
The increase in selling, general and administrative expense was also due to a $31.0 million obligation to Eisai related to the termination of the co-promotion agreement for our MS products in Japan during 2023 and approximately $11.5 million of accelerated depreciation, associated with exiting a leased property, recognized during the second quarter of 2023.
Additionally, we incurred transaction and integration-related expense of approximately $34.6 million related to our acquisition of Reata. In 2023, selling, general and administrative expense also included a $31.0 million obligation to Eisai related to the termination of the co-promotion agreement for our MS products in Japan and approximately $11.5 million of accelerated depreciation.
The IRA's drug pricing controls and Medicare redesign may have an adverse impact on our sales (particularly for our products that are more substantially reliant on Medicare reimbursement), our business and our results of operations. However, the degree of impact from this legislation on our business depends on a number of implementation decisions.
We expect the IRA's drug pricing controls and Medicare Part D redesign may have an adverse impact on our sales, particularly for our products that are more substantially reliant on Medicare reimbursement.
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.
For the years ended December 31, 2024, 2023 and 2022, we recognized net profit-sharing expense of approximately $227.4 million, $223.5 million and $217.4 million, respectively, to reflect Samsung Bioepis' 50.0% sharing of the net collaboration profits.
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.
For additional information on the sale of our PRV, please read Note 3, Dispositions , 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.
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 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.
For additional information on our 2019 Development and Commercialization Agreement with Samsung Bioepis, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report. 74 Table o f Contents COLLABORATION PROFIT SHARING/(LOSS REIMBURSEMENT) Collaboration profit sharing/(loss reimbursement) 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 third quarter of 2023, collaboration profit sharing/(loss reimbursement) related to Sage's 50.0% share of the profit or loss in the U.S. related to ZURZUVAE for PPD.
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.
Write Downs and Other Charges Inventory amounts written down as a result of excess, obsolescence or unmarketability totaled $101.9 million, $124.4 million and $336.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.
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. In addition, new government sanctions on the export of certain 61 T able of Contents manufacturing materials to Russia may delay or limit our ability to get new products approved.
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.
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.
For the year ended December 31, 2023, we had no impairment charges. Amortization of acquired intangible assets, excluding impairment charges, totaled $386.5 million, $240.6 million and $246.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
DISCOUNTS Discounts include trade term discounts and wholesaler incentives. For 2023 compared to 2022, the increase in discounts was primarily driven by higher purchase and volume discounts for biosimilars. RETURNS Product return reserves are established for returns made by wholesalers. In accordance with contractual terms, wholesalers are permitted to return product for reasons such as damaged or expired product.
For 2024 compared to 2023, the increase in discounts was primarily driven by higher purchase and volume discounts for biosimilars and rest of world, as well as higher purchase discounts in the U.S. RETURNS Product return reserves are established for returns made by wholesalers.
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.
In 2025 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. Additionally, a biosimilar entrant of TYSABRI was approved in the U.S. and the E.U. in 2023.
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 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.
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.
PRODUCT COST OF SALES For 2024 compared to 2023, the decrease in product cost of sales was primarily due to favorable product mix from decreased contract manufacturing revenue and lower idle capacity charges, offset in part by approximately $181.5 million in SKYCLARYS amortization costs.
RESERVES FOR DISCOUNTS AND ALLOWANCES Revenue from product sales is recorded net of reserves established for applicable discounts and allowances, including those associated with the implementation of pricing actions in certain international markets where we operate.
For additional information on our license arrangements with Samsung Bioepis and our collaborative arrangements with Eisai, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report. 69 Table o f Contents RESERVES FOR DISCOUNTS AND ALLOWANCES Revenue from product sales is recorded net of reserves established for applicable discounts and allowances, including those associated with the implementation of pricing actions in certain international markets where we operate.
The increase was partially offset by a decrease in costs associated with: • discontinuation of BIIB104 for the treatment of cognitive impairment associated with schizophrenia; and • discontinuation of BIIB078 for the treatment of Alzheimer's disease.
The decrease was partially offset by an increase in costs associated with: • development of BIIB080 for the treatment of Alzheimer's disease; • development of cemdomespib for the treatment of diabetic neuropathic pain; and • development of BIIB091 for the treatment of MS.
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.
For 2025 compared to 2024, we anticipate lower net interest expense as a result of higher cash balances, somewhat offset by lower interest rates, leading to more interest income.
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.
For 2024 compared to 2023, the decrease in contractual adjustments was primarily due to lower government rebates in rest of world and biosimilars, partially offset by higher government rebates in the U.S. DISCOUNTS Discounts include trade term discounts, wholesaler incentives and volume related discounts.
For example, tensions between the U.S. and China have led to a series of tariffs and sanctions being imposed by the U.S. on imports from China mainland, as well as other business restrictions.
For example, tensions between China and Taiwan and tensions between the U.S. and China have led to a series of tariffs and sanctions being imposed by the U.S. on imports from China mainland, retaliatory tariffs imposed by China on U.S. imports, as well as other business restrictions, with additional restrictive measures being proposed. 58 Table o f Contents We, and the pharmaceutical industry, utilize China-based partners for certain raw materials, ingredients and components for our pharmaceutical products and their delivery devices.
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.
Biosimilars revenue includes sales from BENEPALI, IMRALDI, FLIXABI, BYOOVIZ and TOFIDENCE. In 2023 BYOOVIZ became commercially available in certain international markets. During the third quarter of 2023 the FDA approved TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA, which became commercially available in the U.S. during the second quarter of 2024 and approved in the E.U. during the second quarter of 2024.
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.
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 estimated product returns are recognized in the period the related revenue is recognized, resulting in a reduction to product sales.
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.
These costs are considered other research and development costs in the table above and are not allocated to a specific program or stage. For 2023 other research and development costs also includes approximately $197.0 million of equity-based compensation expense incurred as a result of our acquisition of Reata in 2023.
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.
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. In November 2023 we notified Neurimmune of our decision to terminate the Neurimmune Agreement.
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.
This was partially offset by a decrease in rest of world SPINRAZA revenue driven by the loss of an annual tender in Russia which resulted in an unfavorable impact of approximately $45.0 million. The decrease was also impacted by the timing of SPINRAZA shipments and the unfavorable impact of foreign currency exchange.
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 2025 we expect growth in rare disease revenue as we continue to launch SKYCLARYS in the U.S. and the E.U.
BIIB132 In April 2023 we announced that we would discontinue further development of BIIB132 in spinocerebellar ataxia type 3, as part of our ongoing research and development prioritization initiative. 66 T able of Contents RESULTS OF OPERATIONS REVENUE The following revenue discussion should be read in conjunction with Note 5, Revenue , to our consolidated financial statements included in this report.
BIIB143 (cemdomespib) In early 2025 we discontinued further development of BIIB143 (cemdomespib) for the treatment of diabetic neuropathic pain, as part of our ongoing pipeline prioritization efforts. 63 Table o f Contents RESULTS OF OPERATIONS REVENUE The following revenue discussion should be read in conjunction with Note 5, Revenue , 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.
For the years ended December 31, 2024, 2023 and 2022, we recorded approximately $4.8 million, $165.2 million and $119.0 million, respectively, of aggregate gross idle capacity charges.
Research and development expense is reported above based on the following classifications. The development stage reported is based upon the program status when incurred.
Research and development expense is reported above based on the following classifications. The development stage reported is based upon the program status when incurred. 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.
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.
At this stage, we do not believe this Executive Order impacts our financial results as of December 31, 2024. 77 Table o f Contents 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.
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.
INTEREST INCOME AND EXPENSE For the year ended December 31, 2024, net interest expense was approximately $182.7 million, compared to net interest income of $29.6 million in 2023. The change was primarily due to lower interest income driven by lower cash balances in 2024, compared to 2023, due to use of cash on hand for business development transactions.
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.
EARLY STAGE PROGRAMS 2024 vs. 2023 The decrease in early stage programs was driven by a decrease in costs associated with: • advancement of BIIB059 for the treatment of CLE into late stage; • discontinuation of BIIB121 for the treatment of Angelman syndrome; and • discontinuation of BIIB131 for the treatment of acute ischemic stroke.
BUSINESS UPDATE REGARDING MACROECONOMIC CONDITIONS AND OTHER DISRUPTIONS Significant portions of our business are conducted in Europe, Asia and other international geographies.
TYSABRI A biosimilar entrant of TYSABRI was approved in the U.S. and the E.U. in 2023. We expect the future sales of TYSABRI may be adversely affected by the entrance of this biosimilar. BUSINESS UPDATE REGARDING MACROECONOMIC CONDITIONS AND OTHER DISRUPTIONS Significant portions of our business are conducted in Europe, Asia and other international geographies.
As of December 31, 2023, these batch commitments have been satisfied and we expect that our contract manufacturing revenue will be lower in 2024, compared to 2023, as we are no longer supplying contract manufacturing customers in this manner.
As a result, we recognized lower contract manufacturing revenue in 2024, compared to 2023, as we are no longer supplying contract manufacturing customers using Hillerød in this manner.
The IRA also establishes drug inflationary rebate requirements to penalize manufacturers from raising the prices of Medicare covered single-source drugs and biologics beyond the inflation-adjusted rate. Further, to incentivize biosimilar development, the IRA provides an 8.0% Medicare Part B add-on payment for qualifying biosimilar products for a five-year period.
This includes the following: (i) allowing CMS to negotiate prices for select high-cost Medicare Part D drugs (beginning in 2026) and Part B drugs (beginning in 2028) to reduce out-of-pocket prescription drug costs for beneficiaries, potentially resulting in higher contributions from plans and manufacturers; (ii) drug inflationary rebate requirements to penalize manufacturers from raising the prices of Medicare covered single-source drugs and biologics beyond the inflation-adjusted rate, beginning in 2022 for Part D drugs and 2023 for Part B drugs; (iii) to incentivize biosimilar development, the IRA provides an 8.0% Medicare Part B add-on payment for qualifying biosimilar products for a five-year period; and (IV) 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 up to 10.0% of costs up to the $2,000 cap and up to 20.0% after that cap is reached.
Rest of World Key developments related to LEQEMBI (lecanemab) in rest of world markets during 2023 consisted of the following: • In January 2024 we and Eisai announced that the SAG will convene at the request of the CHMP to discuss the MAA of lecanemab that is currently under review by the EMA.
Rest of World Key developments related to LEQEMBI (lecanemab) in rest of world markets consisted of the following: • In January 2025 we and Eisai announced an update regarding the ongoing regulatory review of the MAA for lecanemab in the E.U., which the CHMP of the EMA previously adopted a positive opinion on in November 2024.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor additional information on our cybersecurity risks, please read Item 1A. Risk Factors - A breakdown or breach of our technology systems could subject us to liability or interrupt the operation of our business , included in this report.
Biggest changeRisk Factors - A breakdown or breach of our information systems could subject us to liability or interrupt the operation of our business , included in this report.
Our Board of Directors oversees management's processes for identifying and mitigating risks, including cybersecurity and information security risks. Our Audit Committee of our Board of Directors regularly reviews our technology and cybersecurity program and effectiveness, internal audits of our program, independent external expert evaluations of our program's maturity and operational readiness and the results of penetration testing.
Our Board of Directors oversees management's processes for identifying and mitigating risks, including cybersecurity and information security risks. Our Board of Directors regularly reviews our technology and cybersecurity program and effectiveness, internal audits of our program, independent external expert evaluations of our program's maturity and operational readiness and the results of penetration testing.
As part of our vendor risk management program, we conduct security assessments prior to engagement of high-risk vendors and other third-party providers and have a monitoring program to evaluate ongoing compliance with our cybersecurity standards. 54 T able of Contents A key element of our technology and cybersecurity program strategy is fostering training and awareness.
As part of our vendor risk management program, we conduct security assessments prior to engagement of high-risk vendors and other third-party providers and have a monitoring program to evaluate ongoing compliance with our cybersecurity standards. A key element of our technology and cybersecurity program strategy is fostering training and awareness.
ITEM 1C. CYBERSECURITY RISK MANAGEMENT AND STRATEGY We maintain a technology and cybersecurity program, which includes information security, as part of our overall risk management process with the aim that our information systems, including those of our vendors and other third-parties, will be resilient, effective and capable of safeguarding against emerging risks and cybersecurity threats.
ITEM 1C. CYBERSECURITY RISK MANAGEMENT AND STRATEGY 52 Table o f Contents We maintain a technology and cybersecurity program, which includes information security, as part of our overall risk management process with the aim that our information systems, including those of our vendors and other third-parties, will be resilient, effective and capable of safeguarding against emerging risks and cybersecurity threats.
Our Audit Committee also receives regular cybersecurity updates and education on a broad range of topics, including: • Current cybersecurity landscape and emerging threats; • Status of ongoing cybersecurity initiatives and strategies; • Incident report and learnings from any cybersecurity events; and • Compliance with regulatory requirements and industry standards.
Our Board of Directors also receives cybersecurity updates and education on a broad range of topics, including: • Current cybersecurity landscape and emerging threats; • Status of ongoing cybersecurity initiatives and strategies; • Incident report and learnings from any cybersecurity events; and 53 Table o f Contents • Compliance with regulatory requirements and industry standards.
Added
We do not believe that any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition during the period covered by this filing. For additional information on our cybersecurity risks, please read Item 1A.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn 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.
Biggest changeOur international lease agreements expire at various dates through the year 2034. In the fourth quarter of 2021 we began construction of a new gene therapy, clinical packaging and other manufacturing facility in RTP, North Carolina to support our gene therapy pipeline across multiple therapeutic areas. The new manufacturing facility will be approximately 197,000 square feet.
ITEM 2. PROPERTIES Below is a summary of our owned and leased properties as of December 31, 2023. U.S.
ITEM 2. PROPERTIES Below is a summary of our significant properties owned and leased as of December 31, 2024. Location Approximate Square Feet Use Owned/Leased U.S.
Removed
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.
Added
Cambridge, Massachusetts 263,000 Research laboratory and cogeneration plant Owned Cambridge, Massachusetts 729,000 Corporate headquarters and laboratory Leased - Expires 2028 Weston, Massachusetts 357,000 Office Leased - Expires 2025 RTP, North Carolina 1,040,000 Office, laboratory, manufacturing, warehouse Owned Durham, North Carolina 65,000 Warehouse Leased - Expires 2025 Plano, Texas 327,000 Office and laboratory Leased - Expires 2038 International (1) Solothurn, Switzerland 734,000 Manufacturing facility, warehouse and office Owned Baar, Switzerland 81,800 International headquarters Leased - Expires 2028 (1) We also lease office space in other international regions including: the U.K.; Germany; France; Japan; Canada and numerous other countries.
Removed
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.
Added
We estimate the construction of this manufacturing facility will be completed during 2025. We believe that our our existing properties, including both owned and leased sites, are adequate and suitable for the conduct of our business. We believe our capital resources are sufficient to purchase, lease or construct any additional facilities required to meet our expected long-term growth needs.
Removed
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.
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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.
Removed
The agreement was driven by our 2022 efforts to reduce costs by consolidating real estate locations. For additional information on our 300 Binney Street lease modification, please read Note 12, Leases , to our consolidated financial statements included in this report.
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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.
Removed
The new manufacturing facility will be approximately 197,000 square feet.
Removed
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
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.
Removed
For 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.
Removed
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.
Removed
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.
Removed
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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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
Biggest changeITEM 3. LEGAL PROCEEDINGS For a discussion of legal matters as of December 31, 2024, 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. 54 Table o f Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe 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.
Biggest changeThe stock price performance in the graph below is not necessarily indicative of future price performance. 2019 2020 2021 2022 2023 2024 Biogen Inc. $100.00 $82.52 $80.85 $93.31 $87.19 $51.52 Nasdaq Pharmaceutical Index $100.00 $110.52 $137.47 $153.08 $159.01 $172.62 S&P 500 Index $100.00 $118.40 $152.39 $124.79 $157.59 $197.02 Nasdaq Biotechnology Index $100.00 $126.42 $126.45 $113.65 $118.87 $118.20 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.
Approximately $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.
Approximately $2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2024. In August 2022 the IRA was signed into law. Among other things, the IRA levies a 1.0% excise tax on net stock repurchases after December 31, 2022.
ISSUER PURCHASES OF EQUITY SECURITIES The following table summarizes our common stock repurchase activity during the fourth quarter of 2023: Period Total Number of Shares Purchased (#) Average Price Paid per Share ($) 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.
ISSUER PURCHASES OF EQUITY SECURITIES The following table summarizes our common stock repurchase activity during the fourth quarter of 2024: 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 1, 2024 - October 31, 2024 — $ — — $ 2,050.0 November 1, 2024 - November 30, 2024 — $ — — $ 2,050.0 December 1, 2024 - December 31, 2024 — $ — — $ 2,050.0 Total (1) — $ — (1) There were no share repurchases during the fourth quarter of 2024.
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.
The performance graph below assumes the investment of $100.00 on December 31, 2019, 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 12, 2024, there were approximately 420 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 11, 2025, there were approximately 392 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 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.
Under our 2020 Share Repurchase Program, we repurchased and retired approximately 3.6 million shares of our common stock at a cost of approximately $750.0 million during the year ended December 31, 2022 . There were no share repurchases of our common stock during the years ended December 31, 2024 and 2023.
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.
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 shares repurchased under our 2020 Share Repurc hase Program were retired.
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.
While we have historically made discretionary share repurchases, we had no share repurchases of our common stock during the years ended December 31, 2024 and 2023. 55 Table o f 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.
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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.
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For our discussion of the year ended December 31, 2022, compared to the year ended December 31, 2021, please read

Item 7. Management's Discussion & Analysis

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

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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.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report and elsewhere in this report, that could cause actual results to differ materially from those reflected in such statements.
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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.
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The factors identified above should not be construed as an exhaustive list of factors that could affect our future results and should be read in conjunction with the other cautionary statements that are included in this Annual Report on Form 10-K.
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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.
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Because some of these risks and uncertainties cannot be predicted or quantified and some are beyond our control, you should not rely on our forward-looking statements as predictions of future events and you should not place undue reliance on these statements.
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We support our drug discovery and development efforts through internal research and development programs and external collaborations.
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Moreover, we operate in a very competitive and rapidly changing environment, new risks and uncertainties may emerge from time to time and it is not possible for us to predict all risks nor identify all uncertainties. Forward-looking statements speak only as of the date of this report and are based on information and estimates available to us at this time.
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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.
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Except as required by law, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. You should read this report with the understanding that our actual future results, performance, events and circumstances might be materially different from what we expect.
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We also have collaborations with Eisai on the commercialization of LEQEMBI for the treatment of Alzheimer's disease and Sage on the commercialization of ZURZUVAE for the treatment of PPD and we have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, CLL and other conditions; RITUXAN HYCELA for the treatment of non-Hodgkin's lymphoma and CLL; GAZYVA for the treatment of CLL and follicular lymphoma; OCREVUS for the treatment of 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.
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NOTE REGARDING COMPANY AND PRODUCT REFERENCES References in this report to: • “Biogen,” the “company,” “we,” “us” and “our” refer to Biogen Inc. and its consolidated subsidiaries; and • “RITUXAN” refers to both RITUXAN (the trade name for rituximab in the U.S., Canada and Japan) and MabThera (the trade name for rituximab outside the U.S., Canada and Japan).
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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.
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NOTE REGARDING TRADEMARKS ADUHELM®, AVONEX®, BYOOVIZ®, PLEGRIDY®, QALSODY®, RITUXAN®, RITUXAN HYCELA®, SKYCLARYS®, SPINRAZA®, TECFIDERA®, TYSABRI® and VUMERITY® are registered trademarks of Biogen. BENEPALI™, FLIXABI™, FUMADERM™, IMRALDI™, OPUVIZ™ and TOFIDENCE™ are trademarks of Biogen. ACTEMRA®, COLUMVI®, ENBREL®, EYLEA®, FAMPYRA™, GAZYVA®, LEQEMBI®, HUMIRA®, LUCENTIS®, LUNSUMIO®, OCREVUS®, REMICADE®, ZURZUVAE™ and other trademarks referenced in this report are the property of their respective owners.
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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.
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Table o f Contents DEFINED TERMS 2023 Form 10-K Annual Report on Form 10-K for the year ended December 31, 2023 2020 Share Repurchase Program Board of Directors authorized program to repurchase up to $5.0 billion of our common stock 2024 Omnibus Equity Plan Biogen Inc. 2024 Omnibus Equity Plan 2017 Omnibus Equity Plan Biogen Inc. 2017 Omnibus Equity Plan 2024 ESPP Biogen Inc. 2024 Employee Stock Purchase Plan 2015 ESPP Biogen Inc. 2015 Employee Stock Purchase Plan 2023 Term Loan $1.5 billion term loan credit agreement 125 Broadway 125 Broadway, Cambridge, MA 300 Binney Street 300 Binney Street, Cambridge, MA AAIC Alzheimer's Association International Conference AbbVie AbbVie Inc.
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For additional information on our collaboration arrangements, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report. We seek to ensure an uninterrupted supply of medicines to patients around the world. To that end, we continually review our manufacturing capacity, capabilities, processes and facilities.
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AI Artificial Intelligence Alkermes Alkermes plc ALS Amyotrophic Lateral Sclerosis AMP Average Manufacturer Price AMR Antibody-Mediated Rejection AOCI Accumulated Other Comprehensive Income (Loss) ASO Antisense Oligonucleotide ASU Accounting Standards Update ATV Antibody Transport Vehicle BLA Biologics License Application Blackstone Blackstone Life Sciences CCDAA Climate Corporate Data Accountability Act CCPA California Consumer Privacy Act CEO Chief Executive Officer CHMP Committee for Medicinal Products for Human Use CISA Cybersecurity and Infrastructure Security Agency CISO Chief Information Security Officer CJEU Court of Justice of the European Union CLE Cutaneous Lupus Erythematosus CLL Chronic Lymphocytic Leukemia CMS Centers for Medicare & Medicaid Services CODM Chief Operating Decision Maker Convergence Convergence Pharmaceuticals Ltd.
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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.
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CRFRA Climate-Related Financial Risk Act CRL Complete Response Letter CROs Contract Research Organizations CTAD Clinical Trials on Alzheimer's Disease DEA Drug Enforcement Agency Denali Denali Therapeutics Inc. Directors Plan Biogen Inc. 2015 Non-Employee Directors Equity Plan Table o f Contents DEFINED TERMS (continued) District Court U.S. District Court for the District of Massachusetts DOJ U.S.
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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.
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Department of Justice DPN Diabetic Painful Neuropathy EC European Commission EHS Environment, Health and Safety Eisai Eisai Co., Ltd. EMA European Medicines Agency EPO European Patent Office ERG Employee Resource Group ERISA Employee Retirement Income Security Act of 1974 ERM Enterprise Risk Management E.U.
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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.
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European Union FA Friedreich's Ataxia FASB Financial Accounting Standards Board FCPA Foreign Corrupt Practices Act FDA U.S. Food and Drug Administration FDIC Federal Deposit Insurance Corporation Fit for Growth Cost saving program initiated in 2023 FSS Federal Supply Schedule GCP Good Clinical Practices GDPR General Data Privacy Regulation Genentech Genentech, Inc.
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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.
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GILTI Global Intangible Low Tax Income GloBE Global Anti-Base Erosion GMP Good Manufacturing Practices HI-Bio Human Immunology Biosciences, Inc. Humana Humana Inc. IgAN Immunoglobulin A. Nephropathy Ionis Ionis Pharmaceuticals Inc.
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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
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IPR&D In-process Research and Development IRA Inflation Reduction Act of 2022 IT Information Technology IV Intravenous LHI Large Hemispheric Infarction LRRK2 Leucine-Rich Repeat Kinase 2 MAA Marketing Authorization Application MDD Major Depressive Disorder MHRA Medicines and Healthcare products Regulatory Agency MS Multiple Sclerosis NCD National Coverage Decision NDA New Drug Application NDS New Drug Submission Table o f Contents DEFINED TERMS (continued) Neurimmune Neurimmune SubOne AG NIST National Institute of Standards and Technology NMPA National Medicinal Products Administration ODD Orphan Drug Designation OECD Organization for Economic Co-operation and Development OIE Other (Income) Expense, Net PDUFA Prescription Drug User Fee Act PFAS Per- and Polyfluoroalkyl Substances PHS Public Health Service PMDA Pharmaceuticals and Medical Devices Agency PMN Primary Membranous Nephropathy Polpharma Polpharma Biologics S.A.
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PPACA Patient Protection and Affordable Care Act PPD Postpartum Depression PPMS Primary Progressive MS PRV Priority Review Voucher R&D Research and Development Reata Reata Pharmaceuticals, Inc. REMS Risk Evaluation and Mitigation Strategies RMS Relapsing MS RRMS Relapsing-Remitting MS RTP Research Triangle Park SAG Scientific Advisory Group Sage Sage Therapeutics, Inc. Samsung Bioepis Samsung Bioepis Co., Ltd.
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Samsung BioLogics Samsung BioLogics Co., Ltd. Sangamo Sangamo Therapeutics, Inc. SEC U.S.
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Securities and Exchange Commission SG&A Selling, General and Administrative SLE Systemic Lupus Erythematosus SMA Spinal Muscular Atrophy SMN Survival Motor Neuron SOD1 Superoxide Dismutase 1 SPC Supplementary Protection Certificate SSP Supplemental Savings Plan SWISSMEDIC Swiss Agency for Therapeutic Products TBA Technical Boards of Appeal TGN Trigeminal Neuralgia TNF Anti-tumor Necrosis Factor Transition Toll Tax A one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings U.K.
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United Kingdom U.S. United States U.S. GAAP Accounting Principles Generally Accepted in the U.S. VA Veterans Administration Table o f Contents PART I

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe 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.
Biggest changeThe changes in total current assets and total current liabilities were primarily driven by the following: CURRENT ASSETS • $1.3 billion increase in cash and cash equivalents ; • $259.3 million decrease in accounts receivable, net related to our ongoing operations; and • $429.5 million decrease in other current assets primarily due to the receipt of $437.5 million from Samsung BioLogics related to the sale of our 49.9% equity interest in Samsung Bioepis.
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.
This categorization did not have a material impact on our results of operations or financial position as of December 31, 2024, 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.
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.
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, 2024 and 2023. EQUITY PRICE RISK Our strategic investment portfolio includes investments in equity securities of certain biotechnology companies.
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.
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 2021 Exchange Offer Senior Notes, our 2020 Senior Notes and our 2015 Senior Notes, including principal and interest payments.
Amounts reflected within the table above detail future minimum rental commitments under non-cancelable operating leases as of December 31 for each of the periods presented. In addition to the minimum rental commitments, these leases may require us to pay additional amounts for taxes, insurance, maintenance and other operating expenses.
Amounts reflected within the table above detail future minimum rental commitments under non-cancelable operating leases as of December 31 for each of the periods presented. In addition to the minimum rental commitments, these leases may require us to pay additional amounts for taxes, insurance, maintenance and other operating expense.
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.
LEGAL MATTERS For a discussion of legal matters as of December 31, 2024, 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.
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.
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, 2024, such contingencies have not been recorded in our financial statements.
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.
For a summary of the fair values of our outstanding borrowings as of December 31, 2024 and 2023, please read Note 8, Fair Value Measurements, to our consolidated financial statements included in this report.
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.
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.
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.
Royalties payable on net sales of VUMERITY are subject, under certain circumstances, to tiered minimum annual payment requirements for a period of five years following FDA approval. In October 2019 we entered into a new supply agreement and amended our license and collaboration agreement with Alkermes for VUMERITY.
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.
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.
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.
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. 85 Table o f Contents 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.
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, which is based on revenue generated from the products underlying the related intangible assets.
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.
As of December 31, 2024 and 2023, 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 $191.7 million and $249.4 million, respectively.
We have elected to initiate a technology transfer and, following a transition period, to manufacture VUMERITY or have VUMERITY manufactured by a third party we have engaged in exchange for paying an increased royalty rate to Alkermes on any portion of future worldwide net commercial sales of VUMERITY that is manufactured by us or our designee.
We have elected to initiate a technology transfer and, following a transition period, to 82 Table o f Contents manufacture VUMERITY or have VUMERITY manufactured by a third party we have engaged in exchange for paying an increased royalty rate to Alkermes on any portion of future worldwide net commercial sales of VUMERITY that is manufactured by us or our designee.
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.
We consolidate variable interest entities if we are the primary beneficiary. NEW ACCOUNTING STANDARDS For a discussion of new accounting standards please read Note 1, Summary of Significant Accounting Policies, to our consolidated financial statements included in this report.
The estimated fair value change was determined by measuring the impact of the hypothetical exchange rate movement on outstanding forward contracts. Our use of this methodology to quantify the market risk of such instruments is subject to assumptions and actual impact could be significantly different.
The estimated fair value change was determined by measuring the impact of the hypothetical exchange rate movement on outstanding forward contracts. Our use of this methodology to quantify the market risk of such instruments is subject to assumptions and actual impact could be significantly 88 Table o f Contents different.
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.
As of December 31, 2024 and 2023, a hypothetical adverse 10.0% movement would result in a hypothetical decrease in fair value of approximately $18.0 million and $41.7 million, respectively. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item 8 is contained on pages F-1 through F-83 of this report and is incorporated herein by reference.
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.
If we acquire an asset or group of assets that do not meet the definition of a business under applicable accounting standards, then the acquired IPR&D is expensed on its acquisition date. Future costs to develop these assets are recorded to research and development expense within our consolidated statements of income as they are incurred.
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.
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. 81 Table o f Contents CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS CONTRACTUAL OBLIGATIONS The following table summarizes our contractual obligations as of December 31, 2024, 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.
Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices. Product revenue reserves, which are classified as a reduction in product revenue, are generally characterized in the following categories: discounts, contractual adjustments and returns.
Our process for 84 Table o f Contents estimating reserves established for these variable consideration components do not differ materially from our historical practices. Product revenue reserves, which are classified as a reduction in product revenue, are generally characterized in the following categories: discounts, contractual adjustments and returns.
The devaluation resulted in a $16.0 million charge recorded 91 T able of Contents during the fourth quarter of 2023 in other (income) expense, net within our consolidated statements of income for the year ended December 31, 2023.
The devaluation resulted in a $16.0 million charge recorded during the fourth quarter of 2023 in other (income) expense, net within our consolidated statements of income for the year ended December 31, 2023.
CASH 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.
CASH FLOW The following table summarizes our cash flow activity: % Change For the Years Ended December 31, 2024 vs. 2023 2023 vs. 2022 (In millions, except percentages) 2024 2023 2022 Net cash flow provided by (used in) operating activities $ 2,875.5 $ 1,547.2 $ 1,384.3 85.9 % 11.8 % Net cash flow provided by (used in) investing activities (799.2) (4,101.0) 1,576.6 (80.5) (360.1) Net cash flow provided by (used in) financing activities (683.5) 149.3 (1,747.3) (557.8) 108.5 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 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.
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. 87 Table o f Contents We do not enter into financial instruments for trading or speculative purposes.
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.
We also accrue for potential interest and penalties related to unrecognized tax benefits in income tax (benefit) expense in our consolidated statements of income. BUSINESS COMBINATIONS Business combinations are recorded using the acquisition method of accounting.
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.
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 $234.0 million related to the remaining payments on the Transition Toll Tax and $11.7 million related to the fair value of net liabilities on derivative contracts.
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 no outstanding borrowings and were in compliance with all covenants under this facility.
The terms of the revolving credit facility include a financial covenant that requires us not to exceed a maximum consolidated leverage ratio. This revolving credit facility replaced the revolving credit facility that we entered into in January 2020. As of December 31, 2024, we had no outstanding borrowings and were in compliance with all covenants under this facility.
As of December 31, 2023 and 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 $345.5 million and $338.6 million, respectively.
As of December 31, 2024 and 2023, a 10.0% change in our discounts, contractual adjustments and reserves would have resulted in a decrease of our pre-tax earnings by approximately $351.9 million and $345.5 million, respectively.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to these consolidated financial statements included in this report.
For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions , to our condensed 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.
For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. For additional information on the sale of our equity interest in Samsung Bioepis and the sale of our PRV, please read Note 3, Dispositions , to our consolidated financial statements included in this report.
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in this report. 78 Table o f Contents LIQUIDITY WORKING CAPITAL Working capital is defined as current assets less current liabilities. Our working capital was $1.9 billion as of December 31, 2024, compared to $3.4 billion as of December 31, 2023.
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.
CONTINGENT DEVELOPMENT, REGULATORY AND COMMERCIAL MILESTONE PAYMENTS Based on our development plans as of December 31, 2024, we could trigger potential future milestone payments to third parties of up to approximately $3.8 billion, including approximately $0.5 billion in development milestones, approximately $0.5 billion in regulatory milestones and approximately $2.8 billion in commercial milestones, as part of our various collaborations, including licensing and development programs and HI-Bio's pre-existing commitments, as discussed below.
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.
These differences result in 86 Table o f Contents 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.
Changes in estimates and assumptions used in determining the fair value of our acquired IPR&D could result in an impairment. Impairments are recorded within amortization and impairment of acquired intangible assets in our consolidated statements of income.
If the carrying value of our acquired IPR&D exceeds its fair value, then the intangible asset is written down to its fair value. Changes in estimates and assumptions used in determining the fair value of our acquired IPR&D could result in an impairment. Impairments are recorded within amortization and impairment of acquired intangible assets in our consolidated statements of income.
We have experienced no significant limitations in our liquidity resulting from uncertainties in the banking sector. 83 T able of Contents The following table summarizes the fair value of our significant common stock investments in our strategic investment portfolio: As of December 31, (In millions) 2023 2022 Denali (1) $ 273.6 $ 370.2 Sage 135.3 238.0 Sangamo (1) 7.9 74.3 Ionis (2) — 108.6 Total $ 416.8 $ 791.1 (1) During 2023 we sold a portion of our Sangamo and Denali common stock.
We have experienced no significant limitations in our liquidity resulting from uncertainties in the banking sector. 79 Table o f Contents The following table summarizes the fair value of our significant common stock investments in our strategic investment portfolio: As of December 31, (In millions) 2024 2023 Denali (1) $ 145.8 $ 273.6 Sage 33.9 135.3 Sangamo (1) — 7.9 Total $ 179.7 $ 416.8 (1) During 2024 we sold a portion of our Denali common stock and the remaining shares of our Sangamo common stock.
For additional information on our impairments, please read Note 7, Intangible Assets and Goodwill , to our consolidated financial statements included in this report. 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.
For additional information on our impairments, please read Note 7, Intangible Assets and Goodwill , to our consolidated financial statements included in this report. Our most significant intangible assets relate to SKYCLARYS and TYSABRI.
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.
The change in working capital reflects an increase in total current assets of approximately $597.5 million and an increase in total current liabilities of approximately $2.1 billion.
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.
We have approximately $509.2 million in cancellable future commitments based on existing CRO contracts as of December 31, 2024. 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.
Additionally, we received $582.6 million in 2022 related to the sale of one of our buildings. 84 T able of Contents FINANCING ACTIVITIES For 2023 compared to 2022, the change in net cash flow provided by (used in) financing activities was primarily due to the issuance of our 2023 Term Loans totaling $1.0 billion under our $1.5 billion term loan credit agreement which were used to partially fund our acquisition of Reata, partially offset by repayments of borrowings and debt premiums paid totaling $809.9 million.
FINANCING ACTIVITIES For 2024 compared to 2023, the change in net cash flow in financing activities was primarily due to the repayment of our 2023 Term Loan for $650.0 million during 2024 compared to the issuance of term loans totaling $1.0 billion under our 2023 Term Loan which were used to partially fund our acquisition of Reata in 2023, partially offset by repayments of borrowings and debt premiums paid in 2023 totaling $809.9 million.
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.
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.
(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.
Our ability to liquidate our investments in Denali and Sage may be limited by the size of our interest, the volume of market related activity, our concentrated level of ownership and potential restrictions resulting from our status as a collaborator. Therefore, we may realize significantly less than the current value of such investments.
Therefore, we may realize significantly less than the current value of such investments. For additional information on our collaboration arrangements, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report .
For additional information on our collaboration arrangements, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report .
Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We review our intangible assets with indefinite lives for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
We review our intangible assets with indefinite lives for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When performing our impairment assessment, we calculate the fair value using the same methodology as described above under Acquired Intangible Assets, including IPR&D .
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.
Our most significant clinical trial expenditures are to CROs. The contracts with CROs are generally cancellable, with notice, at our option. We recorded accrued expense of approximately $21.7 million in our consolidated balance sheets for expenditures incurred by CROs as of December 31, 2024.
In connection with our acquisition of Reata in September 2023 we entered into a $1.5 billion term loan credit agreement. On the closing date of the Reata acquisition we drew $1.0 billion from the 2023 Term Loan, comprised of a $500.0 million floating rate 364-day tranche and a $500.0 million floating rate three-year tranche.
On the closing date of the Reata acquisition we drew $1.0 billion from the 2023 Term Loan, comprised of a $500.0 million floating rate 364-day tranche and a $500.0 million floating rate three-year tranche. The remaining unused commitment of $500.0 million was terminated. As of December 31, 2023, we repaid $350.0 million of the 364-day tranche.
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.
Payments Due by Period (In millions) Total Less than 1 Year 1 to 3 Years 3 to 5 Years After 5 Years Non-cancelable operating leases (1)(2)(3) $ 459.6 $ 88.7 $ 152.5 $ 66.0 $ 152.4 Long-term debt obligations (4) 9,797.0 1,965.0 323.7 323.7 7,184.6 Purchase and other obligations (5) 566.7 406.2 135.3 20.7 4.5 Defined benefit obligation 107.1 — — — 107.1 Total contractual obligations $ 10,930.4 $ 2,459.9 $ 611.5 $ 410.4 $ 7,448.6 (1) We lease properties and equipment for use in our operations.
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.
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 approximately $73.6 million in milestones in 2025 under our current agreements, excluding opt-in payments.
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.
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.
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.
INVESTING ACTIVITIES For 2024 compared to 2023, the change in net cash flow in investing activities was primarily due to cash payments made associated with our acquisition of HI-Bio in 2024 and with our acquisition of Reata in 2023. Additionally, cash outlay in 2023 was partially offset by net proceeds received from the sale of our marketable securities.
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.
For additional information on our 2023 Term Loan, please read Note 13, Indebtedness , to our consolidated financial statements included in this report. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES As of December 31, 2024, we had cash and cash equivalents totaling approximately $2.4 billion compared to approximately $1.0 billion as of December 31, 2023.
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.
For additional information on the impairment charges related to our long-lived assets during 2024, 2023 and 2022, 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.
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.
Additionally, during the first quarter of 2024 we repaid $250.0 million of the three-year tranche, with the remaining $250.0 million portion being subsequently repaid in full during the second quarter of 2024. 2024 REVOLVING CREDIT FACILITY In August 2024 we entered into a $1.5 billion, five-year senior unsecured revolving credit facility under which we are permitted to draw funds for working capital and general corporate purposes.
As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.
OTHER OFF-BALANCE SHEET ARRANGEMENTS We do not have any relationships with entities often referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.
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.
Based on our most recent impairment assessment we incurred impairment charges of approximately $60.2 million for the year ended December 31, 2024, related to the impairment of other clinical programs we acquired from Reata and Samsung Bioepis commercialization rights terminated during the third quarter of 2024. For the year ended December 31, 2023, we had no impairment charges.
The remaining unused commitment of $500.0 million was terminated. During the fourth quarter of 2023 we repaid $350.0 million of the 364-day tranche.
The remaining $150.0 million portion of the 364-day tranche was repaid during the first quarter of 2024.
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.
Our 2020 Share Repurchase Program does not have an expiration date. All shares repurchased under our 2020 Share Repurc hase Program were retired. There were no share repurchases of our common stock during the years ended December 31, 2024 and 2023. Approximately $2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2024.
Approximately $2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2023. CAPITAL EXPENDITURES 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.
CAPITAL EXPENDITURES In the fourth quarter of 2021 we began construction of a new gene therapy, clinical packaging and other manufacturing facility in RTP, North Carolina to support our gene therapy pipeline across multiple therapeutic areas. The new manufacturing facility will be approximately 197,000 square feet with an estimated total investment of approximately $195.0 million.
The quantitative information about market risk is limited because it does not take into account all foreign currency operating transactions. INTEREST RATE RISK Our investment portfolio includes cash equivalents and short-term investments. The fair value of our marketable securities is subject to change as a result of potential changes in market interest rates.
The quantitative information about market risk is limited because it does not take into account all foreign currency operating transactions. CREDIT RISK Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments, derivatives and accounts receivable.
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.
As of December 31, 2024, we have approximately $173.8 million of liabilities associated with uncertain tax positions. 83 Table o f Contents As of December 31, 2024 and 2023, we have accrued income tax liabilities of approximately $234.0 million and $419.5 million, respectively, under the Transition Toll Tax.
CAPITAL RESOURCES DEBT AND CREDIT FACILITIES LONG-TERM DEBT AND TERM LOAN CREDIT AGREEMENTS Our long-term obligations primarily consist of long-term debt related to our Senior Notes with final maturity dates ranging between 2025 and 2051. As of December 31, 2023, our outstanding balance related to long-term debt was $6,788.2 million.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report. 80 Table o f Contents CAPITAL RESOURCES DEBT AND CREDIT FACILITIES LONG-TERM DEBT AND TERM LOAN CREDIT AGREEMENTS Our long-term obligations primarily consist of long-term debt related to our Senior Notes with final maturity dates ranging between 2030 and 2051.
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.
The amount accrued as of December 31, 2024, is expected to be paid within one year. The Transition Toll Tax is being paid in installments over an eight--year period, which started in 2018, and will not accrue interest.
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.
For 2024 compared to 2023, the increase in net cash flow provided by operating activities was primarily due to higher net income, lower employee-benefit payments made during the first quarter of 2024, as compared to the same period in 2023, lower estimated federal tax payments made during 2024, as compared to 2023, and changes in non-cash adjustments to net income.
During 2022 and 2021 we wrote-off excess inventory of $275.0 million and $120.0 million, respectively, related to ADUHELM. 89 T able of Contents 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.
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. Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.
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.
CURRENT LIABILITIES • $184.1 million increase in accrued expense and other primarily due to $279.3 million of short-term contingent consideration recognized from our acquisition of HI-Bio, offset in part by the timing of our annual incentive compensation payment and other benefits-related payments; and • $1.6 billion increase in current portion of debt primarily due to the reclassification of our $1.75 billion aggregate principal amount of 4.05% Senior Notes due September 15, 2025, from long-term to short-term and the repayment of our 2023 Term Loan.
Removed
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.
Added
The increase in the balance was primarily due to cash generated by our operations, the receipt of $437.5 million in April 2024 from Samsung BioLogics related to the sale of our 49.9% equity interest in Samsung Bioepis, the net cash receipt of $88.6 million from the sale of one of our two PRV's and proceeds from the sale of a portion of our Denali common stock and our remaining Sangamo common stock during 2024.
Removed
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.
Added
The increase was offset in part by $1.15 billion of cash and cash equivalents used to fund our acquisition of HI-Bio in July 2024 and $650.0 million of cash used for the repayment of our 2023 Term Loan.
Removed
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.
Added
The increase was partially offset by the timing of working capital, which includes higher inventory levels, primarily associated with our contract manufacturing for LEQEMBI.
Removed
Operating cash flow in 2023 was also negatively impacted by the $393.4 million in equity-based compensation payments associated with the Reata acquisition.
Added
As of December 31, 2024, our outstanding balance related to long-term debt was $4,547.2 million. In connection with our acquisition of Reata in September 2023 we entered into a $1.5 billion term loan credit agreement.
Removed
Operating cash flow in 2022 was also negatively impacted by the payment of 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.
Added
We estimate the construction of this manufacturing facility will be completed during 2025.
Removed
We had debt repayments of approximately $1.0 billion and share repurchases of $750.0 million during the same period in 2022. For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.
Added
CONTINGENT CONSIDERATION RELATED TO BUSINESS COMBINATIONS In connection with our acquisition of HI-Bio in July 2024 we may make additional payments based upon the achievement of certain milestone events. We recognized the contingent consideration obligations associated with this acquisition at its fair value on the acquisition date and we revalue this obligation each reporting period.
Removed
Our 2020 Share Repurchase Program does not have an expiration date. All share repurchases under our 2020 Share Repurc hase Program will be retired.
Added
We may pay up to an additional $650.0 million in potential future development and regulatory milestone payments. The acquisition-date fair value of these milestones was approximately $485.1 million. We anticipate that we may trigger the first and second milestone payments of approximately $150.0 million each in 2025.
Removed
The new manufacturing facility will be approximately 197,000 square feet with an estimated total investment of approximately $195.0 million.
Added
We acquired HI-Bio's pre-existing in-license commitments under third-party agreements, which include tiered royalties on potential future sales of felzartamab and izastobart/HIB210, ranging from high-single digit to mid-teen percentages, as well as potential future development, regulatory and commercial milestone payments related to felzartamab and izastobart/HIB210 of up to $130.0 million, $230.0 million and $640.0 million, respectively.

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Other BIIB 10-K year-over-year comparisons