10-K – 2026-02-06 – biib-20251231.htm

ACQUISITIONS
ALCYONE THERAPEUTICS, INC.
In November 2025 we completed the acquisition of all of the issued and outstanding shares of Alcyone Therapeutics, Inc., a clinical-stage biotechnology company focused on pediatric care through precision CNS therapeutics and dosing platforms. Alcyone's lead asset is ThecaFlex DRx, an implantable subcutaneous port and catheter device being investigated for the intrathecal delivery of ASOs, including SPINRAZA, which is designed to provide an alternative to repeat lumbar punctures in chronic intrathecal administration of medicines.
Total consideration for this transaction, which was recorded in acquired in-process research and development, upfront and milestone expense in our consolidated statements of income for the year ended December 31, 2025, was approximately $85.0 million, comprising a $50.0 million payment made upon closing and a $35.0 million payment that was considered probable as of December 31, 2025, and made upon FDA approval of a supplemental application in January 2026.
We may pay additional development and regulatory milestone payments to the former shareholders of Alcyone of up to a total of $75.0 million if approval is received for ThecaFlex DRx administration of SPINRAZA or other additional pipeline products.
We accounted for this transaction as an asset acquisition as the value being acquired primarily relates to a single asset. U nder the terms of this acquisition, we will oversee the end-to-end development, manufacturing and commercialization of ThecaFlex DRx .
For additional information on our acquisition of Alcyone, please read Note 2, Acquisitions, to our consolidated financial statements included in this report.
COLLABORATIVE AND OTHER RELATIONSHIPS
DAYRA THERAPEUTICS, INC. COLLABORATION
In October 2025 we entered into a research collaboration with Dayra to discover and develop oral macrocyclic peptides for priority targets in immunological conditions.
Under the terms of this agreement, both companies will collaborate to identify, validate and optimize oral macrocycle candidates for high-priority immunological targets, with our company advancing the molecules through further development and potential commercialization, including manufacturing.
In connection with the closing of this transaction we made an upfront payment of $50.0 million to Dayra, which was recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025.
This agreement also provides us with the option to acquire the development candidates from Dayra, subject to additional payments per program. Dayra will also be eligible to receive potential preclinical and clinical development milestone payments per program.
For additional information on our research arrangement with Dayra, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
VANQUA BIO, INC. COLLABORATION
In October 2025 we entered into a license agreement with Vanqua granting us exclusive worldwide rights to further develop, manufacture and commercialize Vanqua's preclinical oral C5aR1 antagonist compound.
In connection with the closing of this transaction we made an upfront payment of $70.0 million to Vanqua, which was recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025.
We may pay Vanqua potential development, regulatory or commercial, and sales milestone payments of up to $135.0 million, $295.0 million and $560.0 million, respectively, if all the specified milestones set forth in this collaboration are achieved. In addition, we may pay Vanqua tiered royalties on potential net sales of any licensed product under this collaboration in the mid-single digit to low-double digit percentages.
64

Table of Contents

For additional information on our license agreement with Vanqua, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
CITY THERAPEUTICS, INC. COLLABORATION
In May 2025 we entered into a strategic research arrangement with City Therapeutics to develop select novel RNAi therapies. Through this arrangement, City Therapeutics will leverage its next-generation RNAi engineering technologies to develop an RNAi trigger molecule (or molecules) combined with our proprietary drug delivery technology. The collaboration will initially focus on a single target that mediates key CNS diseases, utilizing tissue enhanced delivery technologies with the aim of allowing for systemic administration of medicines. We will be responsible for IND-enabling studies and global clinical development along with any regulatory submissions and all activities related to commercialization, including manufacturing.
In connection with the closing of this transaction we made an upfront payment of $16.0 million to City Therapeutics, which was recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025 , and invested $30.0 million in exchange for a City Therapeutics convertible note, representing a minority equity interest in City Therapeutics, if converted. This convertible note was recorded as a component of investments and other assets within our consolidated balance sheets as of December 31, 2025.
For additional information on our strategic research arrangement with City Therapeutics, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
STOKE THERAPEUTICS, INC. COLLABORATION
In February 2025 we entered into a collaboration and license agreement with Stoke to co-develop and commercialize zorevunersen, an investigational ASO that targets the SCN1A gene for the potential treatment of Dravet syndrome, a rare form of genetic epilepsy associated with refractory seizures and neurodevelopmental impairments. Zorevunersen dosed its first patient in August 2025, advancing zorevunersen to a global Phase 3 trial.
Under the terms of this agreement, Stoke will continue to lead global development and retain exclusive development and commercialization rights for zorevunersen in the U.S., Canada and Mexico and we will have exclusive rights to commercialize zorevunersen in the rest of the world.
In connection with the closing of this transaction we made an upfront payment of $165.0 million to Stoke, which was recognized in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025.
We also have an exclusive option to license certain future follow-on ASO products targeting the SCN1A gene in all territories worldwide other than the U.S., Canada and Mexico, in exchange for separate milestone, cost sharing and royalty considerations.
For additional information on our collaboration arrangement with Stoke, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
ROYALTY PHARMA FUNDING ARRANGEMENT
In February 2025 we entered into a funding agreement with Royalty Pharma under which we received $200.0 million in 2025 and will receive up to $50.0 million in 2026 to co-fund our development costs for the litifilimab program. As there is a substantive transfer of risk to the financial partner for the amount invested, the development funding will be recognized by us as an obligation to perform contractual services. This funding is being recognized as a reduction to research and development expense within our consolidated statements of income, proportionate to the related expense. For the year ended December 31, 2025 , we recorded a reduction to research and development e xpense of $200.0 million within our consolidated statements of income.
If the litifilimab clinical trials are successful for the indications based on the applicable clinical trials, upon regulatory approval in the U.S. or certain major markets in the world, Royalty Pharma will be eligible to receive approval-based fixed milestone payments of up to $250.0 million. The milestone payments due upon approval will be recorded as a component of other (income) expense, net within our consolidated statements of income, when incurred.
If litifilimab receives regulatory approval, Royalty Pharma will be eligible to receive royalties of a mid-single digit percentage of the applicable net sales. Royalties on net sales will be recorded as cost of sales within our consolidated statements of income.
65

Table of Contents

For additional information on our funding arrangement with Royalty Pharma, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.
DEVELOPMENTS IN KEY COLLABORATIVE RELATIONSHIPS
LEQEMBI (lecanemab)
United States
Key developments related to LEQEMBI in the U.S. consisted of the following:
• In January 2026 the FDA accepted for review the supplemental BLA for LEQEMBI subcutaneous autoinjector, LEQEMBI IQLIK, for weekly starting dose, with a PDUFA action date of May 24, 2026.
• In August 2025 the FDA approved the BLA for LEQEMBI subcutaneous autoinjector, LEQEMBI IQLIK, for weekly maintenance dosing.
• In January 2025 the FDA approved LEQEMBI monthly IV maintenance dosing for the treatment of early Alzheimer's disease.
Rest of World
Key developments related to LEQEMBI (lecanemab) in rest of world markets consisted of the following:
• In January 2026 the BLA for LEQEMBI subcutaneous autoinjector was accepted for review by the NMPA in China.
• In November 2025 Eisai filed an NDA for LEQEMBI in Japan seeking approval for a subcutaneous autoinjector as a new route of administration to Japan's Pharmaceuticals and Medical Devices Agency.
• In November 2025 the MHRA in the UK approved LEQEMBI monthly IV maintenance dosing for the treatment of early Alzheimer's disease.
• In October 2025 Health Canada issued a Notice of Compliance with Conditions for LEQEMBI for the treatment of adult patients with a clinical diagnosis of mild cognitive impairment or mild dementia due to Alzheimer's disease who are either apolipoprotein E ε4 non-carriers or heterozygotes and who have confirmed amyloid pathology.
• In September 2025 the National Medical Products Administration in China approved LEQEMBI monthly IV maintenance dosing for the treatment of early Alzheimer's disease.
• In September 2025 the Therapeutic Goods Administration of Australia approved LEQEMBI for adults who are either apolipoprotein E ε4 non-carriers or heterozygous carriers.
• In June 2025 we filed a request for arbitration in the International Court of Arbitration of the International Chamber of Commerce seeking adoption of a budget and commercialization plan for the European Territory that allocates commercialization activities to Biogen and Eisai in an equitable fashion taking into account our respective capabilities and provides a meaningful role for each party.
• In April 2025 the EC approved LEQEMBI in the E.U. for the treatment of adult patients with a clinical diagnosis of mild cognitive impairment and mild dementia due to Alzheimer's disease who are apolipoprotein E ε4 non-carriers or heterozygotes with confirmed amyloid pathology.
ZURZUVAE (zuranolone)
• In September 2025 the EC approved ZURZUVAE in the E.U. for the treatment of PPD in adults following childbirth, offering the first and only treatment indicated for PPD in the E.U.
• In August 2025 the Medicines and Healthcare products Regulatory Agency in the U.K. granted marketing authorization for ZURZUVAE for moderate to severe PPD in the U.K.
SALANERSEN (BIIB115)
• In June 2025 we announced positive interim topline results from the Phase 1b study of salanersen, an ASO being developed for the treatment of SMA. Interim Phase 1b data shows children with SMA previously treated with gene therapy experienced a substantial slowing of neurodegeneration and clinically meaningful improvements in motor function following initiation of salanersen. Our Phase 3 registrational study of salanersen is expected to begin in 2026.
66

Table of Contents

OTHER KEY DEVELOPMENTS
FELZARTAMAB
• In June 2025 we announced the initiation of dosing in the global Phase 3 PREVAIL study. This study will evaluate the efficacy and safety of the investigational drug felzartamab compared to placebo on proteinuria and preservation of kidney function in adults diagnosed with IgAN. In connection with the initiation of this dosing we paid a $30.0 million milestone payment to MorphoSys in July 2025. Additionally, in June 2025 we announced the initiation of dosing in the global Phase 3 PROMINENT study. This study will evaluate the efficacy and safety of the investigational drug felzartamab compared to tacrolimus in adults diagnosed with PMN.
• In March 2025 we announced the initiation of dosing in the global Phase 3 TRANSCEND study. This study will evaluate the efficacy and safety of the investigational drug felzartamab compared to placebo in adult kidney transplant recipients diagnosed with AMR. In connection with the initiation of this dosing we paid a $35.0 million milestone payment to MorphoSys in April 2025.
SPINRAZA (nusinersen)
• In January 2026 the EC granted marketing authorization for a high dose regimen of SPINRAZA in the E.U. for the treatment of 5q SMA, which is the most common form of the disease and represents approximately 95% of all SMA cases. The high dose regimen is comprised of 50 mg/5 mL and 28 mg/5 mL doses and individuals transitioning from the 12 mg dose will receive one 50 mg dose in place of their next 12 mg dose, followed by 28 mg maintenance doses every four months thereafter.
• In September 2025 the high dose regimen of SPINRAZA was approved by the Ministry of Health, Labour and Welfare in Japan.
• In September 2025 the FDA issued a CRL for the supplemental NDA for a higher dose regimen of nusinersen for the treatment of SMA. The CRL requested an update to the technical information to be included in the Chemistry Manufacturing and Controls module of the supplemental NDA and did not cite any deficiencies in the clinical data of the high dose regimen. We resubmitted the supplemental NDA to the FDA, which has been accepted for review with a PDUFA action date of April 3, 2026.
SKYCLARYS (omaveloxolone)
• In June 2025 we announced the initiation of dosing in the global Phase 3 BRAVE study. This study will evaluate the efficacy and safety of omaveloxolone in children with FA between the ages of two and sixteen.
• In April 2025 SKYCLARYS was approved by the Medicines and Healthcare products Regulatory Agency in the U.K. and in Brazil. In March 2025 SKYCLARYS was approved by Health Canada.
QALSODY (tofersen)
• In July 2025 the Medicines and Healthcare products Regulatory Agency in the U.K. approved QALSODY for the treatment of ALS in adults who have a mutation in the SOD1 gene.
• In March 2025 Health Canada issued marketing authorization with conditions for QALSODY for the treatment of ALS in adults who have a mutation in the SOD1 gene. The authorization is conditional, pending the results of trials to verify its clinical benefit.
BIIB080
• In April 2025 the FDA granted Fast Track designation to BIIB080, an investigational ASO therapy targeting tau for the potential treatment of Alzheimer's disease.
CORPORATE MATTERS
2025 SENIOR NOTES
On May 12, 2025, we issued senior unsecured notes for an aggregate principal amount of $1.75 billion. In June 2025 we used the net proceeds from the sale of our 2025 Senior Notes to redeem our 4.050% Senior Notes due September 15, 2025, prior to maturity.
For additional information relating to our 2025 Senior Notes, please read Note 13, Indebtedness , to our consolidated financial statements included in this report.
67

Table of Contents

NEW CORPORATE HEADQUARTERS LEASE
In March 2025 we entered into a lease agreement with MIT Investment Management Company and BioMed Realty for the lease of approximately 580,000 square feet of office and research and development space located at 75 Broadway, Cambridge, Massachusetts, which will be used as our new global corporate headquarters, as well as integrating our research and development and technical operations teams alongside our North American commercial organization. As part of a multi-year real estate consolidation plan that is expected to result in a reduction of approximately 40% of our real estate footprint in Massachusetts, this new lease is intended to replace two existing leases, both in Cambridge, Massachusetts, including our current corporate headquarters. We expect the initial lease term of approximately 15.5 years to commence on May 31, 2028.
For additional information on our lease agreement, please read Note 12, Leases, to our consolidated financial statements included in this report.
DISCONTINUED PROGRAMS AND STUDIES
SALE OF TOFIDENCE
In March 2025 we completed the sale of our regulatory and commercial rights in the U.S. for TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA, to Organon. Under the terms of this transaction, we received a payment of approximately $51.0 million in July 2025 a nd recognized a de minimis loss within our consolidated statements of income for the year ended December 31, 2025.
For additional information on our sale of TOFIDENCE, please read Note 3, Dispositions , to our consolidated financial statements included in this report.
SALE OF BYOOVIZ AND OPUVIZ RIGHTS
In October 2025 we completed the sale of our remaining commercial rights to two ophthalmology assets in Europe: BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, and OPUVIZ, an aflibercept biosimilar referencing EYLEA. Samsung Bioepis will have full responsibility for commercialization of BYOOVIZ upon the transfer of commercial rights from Biogen back to Samsung Bioepis, which became effective as of January 2026. Under the terms of this transaction, we received a payment of $28.0 million in November 2025 and recognized a minimal gain on disposal within our consolidated statements of income for the year ended December 31, 2025.
For additional information on our license arrangements with Samsung Bioepis, please read Note 19, Collaborative and Other Relationships , 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 DPN, as part of our ongoing pipeline prioritization efforts.
FELZARTAMAB - LUPUS NEPHRITIS
In November 2025 we discontinued the open label Phase 1b study of felzartamab for the treatment of lupus nephritis.
68

Table 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.
Revenue is summarized as follows:

  For the Years Ended December 31, % Change $ Change
  2025
vs.
2024 2024
vs.
2023 2025
vs.
2024 2024
vs.
2023
(In millions, except percentages) 2025 2024 2023
Product revenue, net:
United States $ 3,547.9  $ 3,237.3  $ 3,141.4  9.6  % 3.1  % $ 310.6  $ 95.9 
Rest of world 3,571.5  3,976.2  4,105.3  (10.2) (3.1) (404.7) (129.1)
Total product revenue, net 7,119.4  7,213.5  7,246.7  (1.3) (0.5) (94.1) (33.2)
Revenue from anti-CD20 therapeutic programs 1,860.6  1,749.9  1,689.6  6.3  3.6  110.7  60.3 
Alzheimer's collaboration revenue (1)
177.7  59.9  —  196.7  nm 117.8  59.9 
Contract manufacturing, royalty and other revenue 732.9  652.6  899.3  12.3  (27.4) 80.3  (246.7)
Total revenue $ 9,890.6  $ 9,675.9  $ 9,835.6  2.2  % (1.6) % $ 214.7  $ (159.7)

nm Not meaningful
(1) Alzheimer's collaboration revenue consists of our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties.

PRODUCT REVENUE
Product revenue is summarized as follows:

  For the Years Ended December 31, % Change $ Change
  2025
vs.
2024 2024
vs.
2023 2025
vs.
2024 2024
vs.
2023
(In millions, except percentages) 2025 2024 2023
Multiple Sclerosis $ 4,038.9  $ 4,349.8  $ 4,661.9  (7.1) % (6.7) % $ (310.9) $ (312.1)
Rare disease 2,154.2  1,988.1  1,803.0  8.4  10.3  166.1  185.1 
Biosimilars 729.1  793.1  770.0  (8.1) 3.0  (64.0) 23.1 
Other (1)
197.2  82.5  11.8  139.0  nm 114.7  70.7 
Total product revenue, net $ 7,119.4  $ 7,213.5  $ 7,246.7  (1.3) % (0.5) % $ (94.1) $ (33.2)

nm Not meaningful
(1) Other includes ZURZUVAE, FUMADERM and ADUHELM.
69

Table of Contents

MULTIPLE SCLEROSIS

• Global VUMERITY revenue increased $118.8 million, from $628.0 million in 2024 to $746.8 million in 2025, or 18.9%, primarily due to an increase in global demand and a favorable change in estimate of approximately $20.3 million related to rebates and discounts in the U.S., partially offset by charges related to the IRA redesign.
• Global TYSABRI revenue decreased $49.6 million, from $1,715.0 million in 2024 to $1,665.4 million in 2025, or 2.9%, primarily due to increased competition in rest of world, including the impacts from a biosimilar entrant of TYSABRI in Europe.
• Global Interferon revenue decreased $22.4 million, from $968.0 million in 2024 to $945.6 million in 2025, or 2.3%, driven by a decrease in demand as patients transition to higher efficacy therapies, offset in part by a favorable change in estimate of approximately $19.3 million related to rebates and discounts in the U.S.
• Global TECFIDERA revenue decreased $287.4 million, from $967.1 million in 2024 to $679.7 million in 2025, or 29.7%, driven by a decrease in global demand as a result of multiple TECFIDERA generic entrants.

MS revenue includes sales from TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA. Effective January 1, 2025, our collaboration and license agreement for FAMPYRA global commercialization rights was terminated.
In 2026 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. We expect TECFIDERA revenue will be adversely impacted by accelerating generic competition in certain markets in the E.U. Additionally, a biosimilar entrant of TYSABRI was approved in the U.S. and the E.U. in 2023. We expect that future sales of TYSABRI will continue to be adversely affected by the entrance of this biosimilar worldwide. We expect the decline to be partially offset by continued increasing demand for VUMERITY.
70

Table of Contents

RARE DISEASE

• U.S. SPINRAZA revenue decreased $0.2 million, from $625.7 million in 2024 to $625.5 million in 2025 as lower demand was mostly offset by an increase in pricing and timing of shipments.
• Rest of world SPINRAZA revenue decreased $26.2 million, from $947.5 million in 2024 to $921.3 million in 2025, or 2.8%, primarily due to lower demand and the unfavorable impact of foreign currency exchange, partially offset by a one-time VAT refund received in 2025 of approximately $18.1 million and the timing of shipments in certain rest of world markets.
• Global SKYCLARYS revenue increased $138.0 million, from $382.5 million in 2024 to $520.5 million in 2025, or 36.1%, primarily related to an increase in rest of world sales volumes driven by the continued launch in Europe and certain markets in the Middle East.
• Global QALSODY revenue increased $54.5 million, from $32.4 million in 2024 to $86.9 million in 2025, or 168.2%, primarily related to an increase in rest of world sales volumes driven by the continued launch in international markets as well as patient growth in the U.S.

Rare disease revenue includes sales from SPINRAZA, QALSODY, which became commercially available in the E.U. during the second quarter of 2024, and SKYCLARYS which became commercially available in the E.U. during the first quarter of 2024.
In 2026 we expect growth in rare disease revenue due to the continued launch of SKYCLARYS in the U.S., Europe and other international markets as well as the continued launch of QALSODY in Europe. We anticipate global SPINRAZA revenue growth to be relatively flat in 2026.
71

Table of Contents

BIOSIMILARS

• For 2025 compared to 2024, the decrease in biosimilar revenue was primarily due to a decrease in sales volumes, decreases in pricing due to competitive pressures in Europe and the unfavorable impact of foreign currency exchange.

Biosimilars revenue includes sales from BENEPALI, IMRALDI, FLIXABI, BYOOVIZ and TOFIDENCE. In 2025 we completed the sale of our rights to TOFIDENCE and BYOOVIZ.

OTHER PRODUCT REVENUE

ZURZUVAE
U.S. ZURZUVAE revenue increased $122.9 million, from $72.2 million in 2024 to $195.1 million in 2025, or 170.2%, primarily due to higher demand resulting from an increase in total patients in the U.S. We anticipate growth in U.S. ZURZUVAE revenue as we expect total patients to continue to increase in 2026.
72

Table 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. For purposes of this discussion, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.

  For the Years Ended December 31,
(In millions) 2025 2024 2023
Royalty revenue on sales of OCREVUS $ 1,414.9  $ 1,339.5  $ 1,266.2 
Biogen’s share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO 420.2  392.0  409.4 
Other revenue from anti-CD20 therapeutic programs 25.5  18.4  14.0 
Total revenue from anti-CD20 therapeutic programs $ 1,860.6  $ 1,749.9  $ 1,689.6 

ROYALTY REVENUE ON SALES OF OCREVUS
For 2025 compared to 2024, 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. 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. 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) 2025 2024 2023
Product revenue, net $ 1,655.9  $ 1,531.0  $ 1,581.3 
Cost and expense 448.3  404.1  419.9 
Pre-tax profits in the U.S. $ 1,207.6  $ 1,126.9  $ 1,161.4 
Biogen's share of pre-tax profits $ 420.2  $ 392.0  $ 409.4 

For 2025 compared to 2024, the increase in our share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO was primarily due to an increase in sales volumes of GAZYVA of approximately 14.4%, partially offset by a decrease in sales volumes of RITUXAN of approximately 4.1%, resulting from competition from multiple biosimilar products.
For 2025 compared to 2024, the increase in collaboration cost and expense was primarily due to higher selling and marketing expense related to GAZYVA.
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. After an anti-CD20 product is approved, we record our share of the development and sales and marketing expense related to that product as a reduction of our share of pre-tax profits in revenue from anti-CD20 therapeutic programs.
We are aware of several other anti-CD20 molecules, including biosimilar products, that have been approved and are competing with RITUXAN and GAZYVA in the oncology and other markets. B i osimilar products referencing RITUXAN are available in the U.S and are being offered at lower prices. This competition has had a significant adverse impact on the pre-tax profits of our collaboration arrangements with Genentech, as the sales of RITUXAN have decreased substantially compared to prior periods and we expect sales to continue to decrease.
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.
73

Table of Contents

For additional information on our collaboration arrangements with Genentech, including information regarding the pre-tax profit-sharing formula and its impact on future revenue from anti-CD20 therapeutic programs, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.

ALZHEIMER'S COLLABORATION REVENUE
Alzheimer's collaboration revenue consists of our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties, as we are not the principal. We began recognizing Alzheimer's collaboration revenue upon the accelerated approval of LEQEMBI in the U.S. during the first quarter of 2023.
For the years ended December 31, 2025 and 2024, we recognized Alzheimer's collaboration revenue of approximately $177.7 million and $59.9 million, respectively. The increase was primarily due to higher sales volumes driven by the continued launch of LEQEMBI in the U.S. and international markets and the favorable impact from the timing of shipments to China during the second quarter of 2025 as we optimized our global inventory positions.
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.

CONTRACT MANUFACTURING, ROYALTY AND OTHER REVENUE
Contract manufacturing, royalty and other revenue is summarized as follows:

  For the Years Ended December 31,
(In millions) 2025 2024 2023
Contract manufacturing revenue $ 679.4  $ 592.1  $ 848.2 
Royalty and other revenue 53.5  60.5  51.1 
Total contract manufacturing, royalty and other revenue $ 732.9  $ 652.6  $ 899.3 

CONTRACT MANUFACTURING REVENUE
Contract manufacturing revenue primarily reflects amounts earned under contract manufacturing agreements with our strategic customers and batches of LEQEMBI related to our collaboration with Eisai.
For 2025 compared to 2024, the increase in contract manufacturing revenue was primarily driven by higher volumes due to the timing of batch production.
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.
For additional information on our license arrangements with Samsung Bioepis and our collaboration arrangements with Eisai, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.

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.
These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). 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.
The IRA's drug pricing controls and Medicare Part D redesign had an adverse impact on our sales, particularly for our products that are more substantially reliant on Medicare reimbursement. The IRA Medicare Part D redesign had a
74

Table of Contents

modest net unfavorable impact to our 2025 revenue of approximately $90.0 million, concentrated in our SKYCLARYS and MS portfolio product revenue, approximately a quarter of which was associated with SKYCLARYS.
The degree of impact from this legislation on our business depends on a number of forthcoming implementation actions by regulatory authorities, which may be further impacted by other legislative acts that may modify or replace the IRA, such as the OBBBA. The full extent of the IRA's impacts on our sales and, in turn, our business, remains uncertain.
Reserves for discounts, contractual adjustments and returns that reduced gross product revenue are summarized as follows:

For the Years Ended December 31,
(In millions) 2025 2024 2023
Contractual adjustments $ 2,689.7  $ 2,648.8  $ 2,681.7 
Discounts 834.6  832.2  735.2 
Returns 32.6  37.8  38.2 
Total discounts and allowances $ 3,556.9  $ 3,518.8  $ 3,455.1 

For the years ended December 31, 2025, 2024 and 2023, reserves for discounts and allowances as a percentage of gross product revenue were 33.0%, 32.6% and 32.0%, respectively.
CONTRACTUAL ADJUSTMENTS
Contractual adjustments primarily relate to Medicaid and managed care rebates in the U.S., pharmacy rebates, co-payment (copay) assistance, VA, 340B discounts, specialty pharmacy program fees and other government rebates or applicable allowances.
For 2025 compared to 2024, the increase in contractual adjustments was primarily due to higher Medicare manufacturer reserves in the U.S. driven by the IRA Medicare Part D redesign and higher government rebates in rest of world, offset in part by favorable changes in estimates of approximately $64.7 million primarily due to lower managed care rebates, as well as lower co-pay assistance and Medicaid rebates in the U.S.
DISCOUNTS
Discounts include trade term discounts, wholesaler incentives and volume related discounts.
For 2025 compared to 2024, the increase in discounts was primarily driven by higher volume discounts in the U.S. for TYSABRI, offset by lower purchase discounts in rest of world and lower volume discounts for U.S. 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. 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 2025 compared to 2024, the decrease in returns was primarily driven by lower returns in the U.S., partially offset by higher returns in rest of world.
For additional information on our revenue reserves, please read Note 5, Revenue, to our consolidated financial statements included in this report.
75

Table of Contents

COST AND EXPENSE
A summary of total cost and expense is as follows:

  For the Years Ended December 31, % Change $ Change
  2025
vs.
2024 2024
vs.
2023 2025
vs.
2024 2024
vs.
2023
(In millions, except percentages) 2025 2024 2023
Cost of sales, excluding amortization and impairment of acquired intangible assets $ 2,404.2  $ 2,310.4  $ 2,533.4  4.1  % (8.8) % $ 93.8  $ (223.0)
Research and development 1,778.6  1,980.3  2,445.4  (10.2) (19.0) (201.7) (465.1)
Acquired in-process research and development, upfront and milestone expense 471.8  61.5  16.6  667.2  270.5  410.3  44.9 
Selling, general and administrative 2,433.6  2,403.7  2,549.7  1.2  (5.7) 29.9  (146.0)
Amortization and impairment of acquired intangible assets 515.0  446.7  240.6  15.3  85.7  68.3  206.1 
Collaboration profit sharing/(loss reimbursement) 290.2  254.4  218.8  14.1  16.3  35.8  35.6 
(Gain) loss on fair value remeasurement of contingent consideration 33.6  27.7  —  21.3  nm 5.9  27.7 

Impairment of ROU asset 52.9  —  —  nm —  52.9  — 
Restructuring charges 48.6  30.2  218.8  60.9  (86.2) 18.4  (188.6)
Gain on sale of priority review voucher, net —  (88.6) —  nm nm 88.6  (88.6)
Other (income) expense, net 305.6  343.6  315.5  (11.1) 8.9  (38.0) 28.1 
Total cost and expense $ 8,334.1  $ 7,769.9  $ 8,538.8  7.3  % (9.0) % $ 564.2  $ (768.9)

nm Not meaningful

COST OF SALES, EXCLUDING AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS

For the Years Ended December 31,
(In millions) 2025 2024 2023
Product $ 1,587.2  $ 1,604.2  $ 1,787.2 
Royalty 817.0  706.2  746.2 
Total cost of sales $ 2,404.2  $ 2,310.4  $ 2,533.4 

Cost of sales, as a percentage of total revenue, were 24.3%, 23.9% and 25.8% for the years ended December 31, 2025, 2024 and 2023, respectively.
PRODUCT COST OF SALES
For 2025 compared to 2024, the decrease in product cost of sales was primarily due to lower inventory write-offs, partially offset by product mix, including higher contract manufacturing revenue driven by the timing of batch releases and higher SKYCLARYS inventory step-up amortization costs.
Contract manufacturing revenue includes LEQEMBI inventory produced for Eisai. Cost of sales as a percentage of revenue was adversely affected by LEQEMBI batches due to lower margins associated with this business.
As a result of our acquisition of Reata in September 2023 we recorded a fair value step-up adjustment related to the acquired inventory of SKYCLARYS of approximately $1.3 billion. This fair value step-up adjustment is being amortized to cost of sales as the inventory is sold. We expect this amount to be fully amortized by the end of 2028. For the years ended December 31, 2025 and 2024, amortization from the fair value step-up adjustment was approximately $216.9 million and $181.5 million, respectively.
For additional information on our collaboration arrangements with Eisai, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report. For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.
Write Downs and Other Charges
Inventory amounts written down as a result of excess, obsolescence or unmarketability totaled $29.2 million, $101.9 million and $124.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
76

Table of Contents

ROYALTY COST OF SALES
For 2025 compared to 2024 , the increase in royalty cost of sales was primarily due to a charge recorded during 2025 of approximately $104.9 million related to a litigation matter. For additional information on our litigation matters, please read Note 21, Litigation , to our consolidated financial statements included in this report.
77

Table of Contents

RESEARCH AND DEVELOPMENT

Research and development expense, as a percentage of total revenue, was 18.0%, 20.5% and 24.9% for the years ended December 31, 2025, 2024 and 2023, respectively.

For 2025 compared to 2024, the decrease in research and development was primarily driven by continued cost-reduction measures realized in connection with our portfolio prioritization initiatives and our Fit for Growth program, approximately $23.9 million of step-up amortization related to SKYCLARYS inventory recorded in 2025, compared to $48.5 million in 2024, and approximately $42.5 million of equity-based compensation expense recognized in 2024 related to our acquisition of HI-Bio. The decrease was offset in part by higher spend on clinical trials, including litifilimab and felzartamab. Higher clinical trial spend related to litifilimab was offset by $200.0 million in research and development funding received from Royalty Pharma.
EARLY STAGE PROGRAMS
2025 vs. 2024
The decrease in early stage programs was driven by a decrease in costs associated with:
• discontinuation of BIIB143 for the treatment of diabetic neuropathic pain;
• discontinuation of BIIB121 for the treatment of Angelman syndrome;
• advancement of litifilimab for the treatment of CLE into late stage; and
• discontinuation of BIIB105 for the treatment of ALS.
The decrease was partially offset by an increase in costs associated with:
• development of salanersen for the treatment of SMA; and
• development of BIIB080 for the treatment of Alzheimer's disease.
LATE STAGE PROGRAMS
2025 vs. 2024
The increase in late stage programs was driven by an increase in costs associated with:
• development of felzartamab for AMR, IgAN and PMN;
• increased spend on zorevunersen for the treatment of Dravet syndrome; and
• development of litifilimab for the treatment of CLE and SLE, offset by Royalty Pharma funding of $200.0 million.
MARKETED PROGRAMS
2025 vs. 2024
The decrease in marketed programs was driven by a decrease in costs associated with:
• decreased spend on LEQEMBI for the treatment of Alzheimer's disease; and
• $23.9 million of step-up amortization related to SKYCLARYS inventory recorded in 2025, compared to $48.5 million in 2024.

78

Table of Contents

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. 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. These costs are considered other research and development costs in the table above and are not allocated to a specific program or stage.
We expect our core research and development expense to increase slightly in 2026 with most investments in our late-stage programs. We intend to continue committing significant resources to targeted research and development opportunities while continuing to invest in our pipeline, where there is a significant unmet need and where a drug candidate has the potential to be highly differentiated.
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.

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT, UPFRONT AND MILESTONE EXPENSE
During the first quarter of 2025 we began presenting acquired in-process research and development, upfront and milestone expense as a separate line item in our consolidated statements of income. Acquired in-process research and development, upfront and milestone expense includes costs incurred in connection with collaboration and license agreements such as upfront and milestone payments and, when applicable, premiums on equity securities and asset acquisitions of acquired in-process research and development, which were previously included in research and development expense.
For 2025 acquired in-process research and development, upfront and milestone expense primarily consists of the following activity:
• Upfront payment of $165.0 million made to Stoke in connection with the closing of our collaboration and license agreement;
• Total consideration, including upfront payment, of approximately $85.0 million in connection with the closing of our acquisition of Alcyone;
• Upfront payment of $70.0 million made to Vanqua in connection with the closing of our license agreement;
• Upfront payment of $50.0 million made to Dayra in connection with the closing of our research collaboration;
• Milestone payments of $35.0 million and $30.0 million to MorphoSys in connection with the first patient dosed in a Phase 3 clinical trial of felzartamab for the treatment of AMR and IgAN, respectively; and
• Upfront payment of $16.0 million made to City Therapeutics in connection with the closing of our strategic research arrangement.
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 acquisition of Alcyone, please read Note 2, Acquisitions, to our consolidated financial statements included in this report.
79

Table of Contents

SELLING, GENERAL AND ADMINISTRATIVE
For 2025 compared to 2024, selling, general and administrative expense increased by approximately 1.2% primarily due to an increase in operational spending on sales and marketing activities in support of LEQEMBI and SKYCLARYS as we continue to expand our U.S. and international product launches. The increase was partially offset by the realization of our cost-reduction measures in connection with our Fit for Growth program.
In 2026 we expect selling, general and administrative expense to be relatively flat as compared to 2025. We anticipate increases in spend related to product launches and pre-launch activities will be offset by reduced spending within our mature products.

AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS
Our amortization expense is based on the economic consumption and impairment of intangible assets. Our most significant amortizable intangible assets are related to TYSABRI, AVONEX, SPINRAZA, VUMERITY and SKYCLARYS.
Amortization of acquired intangible assets, excluding impairment charges, totaled $507.1 million, $386.5 million and $240.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. The increase in amortization of acquired intangible assets, excluding impairment charges, was primarily due to amortization for the acquired intangible assets associated with SKYCLARYS and TYSABRI.
For the year ended December 31, 2025, amortization and impairment of acquired intangible assets reflects the impact of $7.9 million in impairment charges related to compounds acquired from HI-Bio.
For the year ended December 31, 2024, amortization and impairment of acquired intangible assets reflects the impact of a $40.0 million impairment charge related to intangible assets from other clinical programs we acquired from Reata, reducing the remaining book value of these IPR&D intangible assets to zero, and a $20.2 million impairment charge related to intangible assets associated with the termination of Samsung Bioepis' commercialization rights during the third quarter of 2024.
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) includes Samsung Bioepis' 50.0% share of the profit or loss related to our biosimilars 2013 commercial agreement with Samsung Bioepis and collaboration profit sharing/(loss reimbursement) related to Supernus' 50.0% share of the profit or loss in the U.S. related to ZURZUVAE for PPD.
For the years ended December 31, 2025, 2024 and 2023, we recognized net profit-sharing expense of approximately $219.2 million, $227.4 million and $223.5 million, respectively, to reflect Samsung Bioepis' 50.0% sharing of the net collaboration profits.
For the years ended December 31, 2025, 2024 and 2023, we recognized net profit-sharing expense of approximately $71.0 million and $27.0 million, and net loss reimbursement of approximately $4.7 million, respectively, to reflect Supernus' 50.0% share of net collaboration results in the U.S.
For additional information on our collaboration and license arrangements with Samsung Bioepis and Supernus, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in this report.

(GAIN) LOSS ON FAIR VALUE REMEASUREMENT OF CONTINGENT CONSIDERATION
Consideration payable for certain of our business combinations include future payments that are contingent upon the occurrence of a particular event or events. We record an obligation for such contingent consideration payments at fair value on the acquisition date. We then revalue our contingent consideration obligations each reporting period. Changes in the fair values of our contingent consideration obligations, other than changes due to payments, are recognized as a (gain) loss on fair value remeasurement of contingent consideration within our consolidated statements of income. In connection with our acquisition of HI-Bio in July 2024 we recorded contingent consideration obligations related to potential milestone payments.
For the year ended December 31, 2025, changes in the fair value of our contingent consideration obligations were primarily due to changes in interest rates used to revalue our contingent consideration liabilities and the passage of time.
80

Table of Contents

During the second quarter of 2025 the first milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for AMR was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the third quarter of 2025. In October 2025 the second milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for IgAN was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the fourth quarter of 2025.
For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.

IMPAIRMENT OF RIGHT-OF-USE ASSET
As part of our acquisition of Reata, we assumed responsibility for a single-tenant, build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas, with an initial lease term of 16 years. We recorded a lease liability of approximately $151.8 million, with a corresponding right-of-use asset of approximately $121.2 million. We are continuing to evaluate opportunities to sublease the property.
During the fourth quarter of 2025 we performed an impairment assessment for this right-of use asset. This assessment involved estimating undiscounted future cash flows, including potential sublease income and remaining lease obligations. As a result of this impairment assessment, we recorded an impairment charge of approximately $52.9 million related to this Reata lease, which is included in impairment of ROU asset within our consolidated statements of income for the year ended December 31, 2025.
For additional information on our leases, please read Note 12, Leases , to our consolidated financial statements included in this report.

RESTRUCTURING CHARGES
2023 FIT FOR GROWTH RESTRUCTURING PROGRAM
In 2023 we initiated cost saving measures as part of our Fit for Growth program to reduce operating costs, while improving operating efficiency and effectiveness. The Fit for Growth program generated approximately $1.0 billion in gross operating expense savings by the end of 2025, some of which has been reinvested in various initiatives. The Fit for Growth program included net headcount reductions of approximately 1,400 employees and we incurred total restructuring charges of approximately $320.0 million by the end of 2025.
Total charges incurred from our 2023 Fit for Growth program are summarized as follows:

For the Years Ended December 31,
2025 2024 2023
(In millions) Severance Costs Accelerated Depreciation and Other Total Severance Costs Accelerated Depreciation and Other Total Severance Costs Accelerated Depreciation and Other Total
Selling, general and administrative $ —  $ (1.4) $ (1.4) $ —  $ 13.8  $ 13.8  $ —  $ 23.3  $ 23.3 
Research and development —  10.1  10.1  —  11.7  11.7  —  1.2  1.2 
Restructuring charges 48.7  —  48.7  24.2  —  24.2  153.4  34.6  188.0 
Total charges $ 48.7  $ 8.7  $ 57.4  $ 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, pre-tax gains and losses resulting from the termination of certain leases, employee non-severance expense, consulting fees and other costs.
For additional information on our cost saving initiatives, please read Note 4, Restructuring, to our consolidated financial statements included in this report.

OTHER (INCOME) EXPENSE, NET
For 2025 compared to 2024, the change in other (income) expense, net primarily reflects higher interest income in 2025 driven by higher cash balances as well as higher litigation related expense in 2025 compared to 2024. In 2025 we recorded $139.5 million related to various litigation matters, including our agreement in principle to resolve all claims relating to Biogen's acquisition of Convergence, partially offset by higher net losses on our holdings in equity securities in 2024.
81

Table of Contents

For additional information on our legal matters, please read Note 21, Litigation , to our consolidated financial statements included in this report.
INTEREST INCOME AND EXPENSE
For the year ended December 31, 2025, net interest expense was approximately $142.5 million, compared to net interest expense of $182.7 million in 2024. The change was primarily due to higher interest income driven by higher cash balances in 2025.
For 2026 compared to 2025, we anticipate lower net interest expense as a result of higher interest income driven by higher cash balances, partially offset by higher interest expense as a result of the issuance of our 2025 Senior Notes.
For additional information on our Senior Notes, please read Note 13, Indebtedness , to our consolidated financial statements included in this report.
NET (GAINS) LOSSES IN EQUITY SECURITIES
For the year ended December 31, 2025, net unrealized and realized losses on our holdings in equity securities were approximately $18.2 million and $1.5 million, respectively, compared to net unrealized losses and realized gains of approximately $102.4 million and $2.0 million, respectively, in 2024.
• The net unrealized losses recognized during the year ended December 31, 2025, primarily reflect a decrease in the aggregate fair value of our investment in Denali common stock of approximately $27.7 million, partially offset by an increase in the fair value of Sage common stock of approximately $23.0 million.
• The net unrealized losses recognized during the year ended December 31, 2024, primarily reflect a decrease in the aggregate fair value of our investment 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.

INCOME TAX PROVISION

For the Years Ended December 31,
(In millions, except percentages) 2025 2024 2023
Income before income tax (benefit) expense $ 1,556.5  $ 1,906.0  $ 1,296.8 
Income tax (benefit) expense 263.6  273.8  135.3 
Effective tax rate 16.9  % 14.4  % 10.4  %

Our effective tax rate fluctuates from year to year due to the global nature of our operations. The factors that most significantly impact our effective tax rate include changes in tax laws, variability in the allocation of our taxable earnings among multiple jurisdictions, the amount and characterization of our research and development expense, the levels of certain deductions and credits, acquisitions and licensing transactions.
For 2025 compared to 2024, the increase in our effective tax rate was partially driven by changes in the territorial mix of our profitability and the impact of certain share-based compensation awards that vested during the first quarter of 2025, partially offset by the impact of the elimination of Italian withholding tax.
PILLAR TWO
The OECD has issued model rules, which generally provide for a jurisdictional minimum effective tax rate of 15.0% as defined in those rules. Various countries have or are in the process of enacting legislation intended to implement the principles. Our income tax provision for the years ended December 31, 2025 and 2024, reflects currently enacted legislation and guidance related to the OECD model rules including the Pillar Two side-by-side package announced by the OECD in January 2026. This enacted legislation and guidance related to the OECD model rules did not result in any material adjustments to our income tax provision or income tax balances as of December 31, 2025 and 2024. At this stage, we do not believe the side-by-side package impacts our financial results as of December 31, 2025.
2025 OBBBA TAX PROVISIONS
On July 4, 2025, the U.S. signed into law the OBBBA. The OBBBA contains tax provisions, such as the permanent extension or revision of certain expiring provisions of the Tax Cuts and Jobs Act enacted in 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The provisions of the OBBBA have multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.
82

Table of Contents

The OBBBA did not result in any material adjustments to our total income tax provision for the year ended December 31, 2025, and we have adjusted our deferred tax balances to reflect the impacts of the OBBBA enactment. However, given the complexity of tax laws, related regulations and interpretations, our current estimates may require revision as additional information becomes available regarding the application of the OBBBA provisions.
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.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our financial condition is summarized as follows:

  As of December 31,
(In millions, except percentages) 2025 2024 % Change $ Change
Financial assets:
Cash and cash equivalents $ 3,008.5  $ 2,375.0  26.7  % $ 633.5 
Marketable securities — current 807.2  —  nm 807.2 
Marketable securities — non-current 431.9  —  nm 431.9 
Total cash, cash equivalents and marketable securities $ 4,247.6  $ 2,375.0  78.8  % $ 1,872.6 
Borrowings:
Current portion of notes payable $ —  $ 1,748.6  nm $ (1,748.6)
Notes payable 6,286.8  4,547.2  38.3  1,739.6 
Total borrowings $ 6,286.8  $ 6,295.8  (0.1) % $ (9.0)
Working Capital:
Current assets $ 8,974.1  $ 7,456.8  20.3  % $ 1,517.3 
Current liabilities (3,349.4) (5,528.8) (39.4) 2,179.4 
Total working capital $ 5,624.7  $ 1,928.0  191.7  % $ 3,696.7 

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 and borrowings, as well as our existing cash resources. We believe that generic and biosimilar competition for many of our key products, the continued overall decline of our MS business and our investments in the launch of key new products and the development of our pipeline will have a significant adverse impact on our future cash flow from operations.
We believe that our existing funds, when combined with cash generated from operations and our access to additional financing resources, if needed, are sufficient to satisfy our operating, working capital, strategic alliance, milestone payment, capital expenditure and debt service requirements for the foreseeable future. In addition, we may choose to opportunistically return cash to shareholders and pursue other business initiatives, including acquisition and licensing activities. We may also seek additional funding through a combination of new collaborative agreements, strategic alliances and additional equity and debt financings or from other sources should we identify a significant new opportunity.
During the second quarter of 2025 the first milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for AMR was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the third quarter of 2025. In October 2025 the second milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for IgAN was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the fourth quarter of 2025.
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 Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in this report.
83

Table of Contents

LIQUIDITY
WORKING CAPITAL
Working capital is defined as current assets less current liabilities. Our working capital was $5.6 billion as of December 31, 2025, compared to $1.9 billion as of December 31, 2024. The change in working capital reflects an increase in total current assets of approximately $1.5 billion and a decrease in total current liabilities of approximately $2.2 billion. The changes in total current assets and total current liabilities were primarily driven by the following:
CURRENT ASSETS
• $1.4 billion increase in cash, cash equivalents and current marketable securities ;
• $62.4 million decrease in accounts receivable, net related to our ongoing operations; and
• $292.4 million decrease in inventory primarily due to timing of production.
CURRENT LIABILITIES
• $1.7 billion decrease in the current portion of notes payable due to the redemption of our 4.050% Senior Notes due September 15, 2025, during the second quarter of 2025; and
• $433.5 million decrease in taxes payable primarily due to the timing of tax payments.
For additional information on our Senior Notes, please read Note 13, Indebtedness , to our consolidated financial statements included in this report.
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
As of December 31, 2025, we had cash, cash equivalents and marketable securities totaling approximately $4.2 billion compared to approximately $2.4 billion as of December 31, 2024. The increase in the balance was primarily due to cash generated by our operations, which includes $200.0 million of research and development funding received from Royalty Pharma, partially offset by worldwide tax payments of approximately $864.0 million, an upfront payment made to Stoke of $165.0 million in connection with the closing of our collaboration and license agreement, milestone payments made to the former shareholders of HI-Bio totaling $300.0 million, a payment of $50.0 million in connection with our acquisition of Alcyone and total payments of $166.0 million in connection with our agreements with City Therapeutics, Dayra and Vanqua. During the second quarter of 2025 we received $1.75 billion in net proceeds from the issuance of our 2025 Senior Notes, which was offset by a $1.75 billion payment made for the redemption of our 4.050% Senior Notes due September 15, 2025.
Until required for another use in our business, we typically invest our cash reserves in bank deposits, certificates of deposit, commercial paper, corporate notes, U.S. and foreign government instruments, overnight reverse repurchase agreements and other interest-bearing marketable debt instruments in accordance with our investment policy. It is our policy to mitigate credit risk in our cash reserves and marketable securities by maintaining a well-diversified portfolio that limits the amount of exposure as to institution, maturity and investment type. We have experienced no significant limitations in our liquidity resulting from uncertainties in the banking sector.
The following table summarizes the fair value of our significant common stock investments in our strategic investment portfolio:

As of December 31,
(In millions) 2025 2024
Denali $ 118.1  $ 145.8 
Sage (1)
—  33.9 
Total $ 118.1  $ 179.7 

(1) In July 2025 Sage was acquired by Supernus. Prior to this acquisition, we disposed of all of our shares of Sage common stock in a block trade.
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 2025 Senior Notes, please read Note 13, Indebtedness , to our consolidated financial statements included in this report.
84

Table of Contents

CASH FLOW
The following table summarizes our cash flow activity:

% Change
  For the Years Ended December 31, 2025
vs.
2024 2024
vs.
2023
(In millions, except percentages) 2025 2024 2023
Net cash flow provided by (used in) operating activities $ 2,204.6  $ 2,875.5  $ 1,547.2  (23.3) % 85.9  %
Net cash flow provided by (used in) investing activities (1,371.1) (799.2) (4,101.0) 71.6  (80.5)
Net cash flow provided by (used in) financing activities (301.9) (683.5) 149.3  (55.8) (557.8)

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.
For 2025 compared to 2024, the decrease in net cash flow provided by operating activities was primarily due to lower net income in 2025, which included higher acquired in-process research and development, upfront and milestone payments in 2025, higher worldwide tax payments in 2025, compared to 2024, of approximately $864.0 million and $355.1 million, respectively, driven by the timing of estimated tax payments, the timing of customer payments and higher employee-benefit payments made during the first quarter of 2025, compared to the same period in 2024. The decrease was offset in part by lower inventory levels and $200.0 million of research and development funding received from Royalty Pharma in 2025.
INVESTING ACTIVITIES
For 2025 compared to 2024, the change in net cash flow in investing activities was primarily due to purchases of marketable securities in 2025 of $1.3 billion. In 2024, net cash flow in investing activities included the acquisition of HI-Bio for $1.15 billion, partially offset by the receipt of $437.5 million from Samsung BioLogics related to the sale of our 49.9% equity interest in Samsung Bioepis and the net cash receipt of $88.6 million from the sale of one of our two PRVs.
FINANCING ACTIVITIES
For 2025 compared to 2024, the change in net cash flow in financing activities was primarily due to $1.75 billion in net proceeds received from the issuance of our 2025 Senior Notes, which was offset by a $1.75 billion payment made for the redemption of our 4.050% Senior Notes due September 15, 2025, as well as $300.0 million of milestone payments made to the former shareholders of HI-Bio, of which approximately $280.0 million was reflected within financing activities. Additionally, net cash flow used in financing activities during 2024 included the repayment of our 2023 Term Loan for $650.0 million.
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 our Senior Notes and 2023 Term Loan, please read Note 13, Indebtedness , to our consolidated financial statements included in this report.
85

Table of 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 2055. As of December 31, 2025, our outstanding balance related to long-term debt was $6.3 billion, net of discounts and debt offering costs.
2025 SENIOR NOTES
On May 12, 2025, we issued our 2025 Senior Notes for an aggregate principal amount of $1.75 billion. In June 2025 we used the net proceeds from the sale of our 2025 Senior Notes to redeem our 4.050% Senior Notes due September 15, 2025, prior to maturity.
2023 TERM LOAN
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. 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. The remaining $150.0 million portion of the 364-day tranche was repaid during the first quarter of 2024.
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. 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, 2025, we had no outstanding borrowings and were in compliance with all covenants under this facility.
For a summary of the fair values of our outstanding borrowings as of December 31, 2025 and 2024, please read Note 8, Fair Value Measurements, to our consolidated financial statements included in this report.
For additional information on our Senior Notes, 2023 Term Loan and credit facility please read, Note 13, Indebtedness , to our consolidated financial statements included in this report.
SHARE REPURCHASE PROGRAMS
In October 2020 our Board of Directors authorized our 2020 Share Repurchase Program, which is a program to repurchase up to $5.0 billion of our common stock. Our 2020 Share Repurchase Program does not have an expiration date. All shares repurchased under our 2020 Share Repurc hase Program were retired. There were no repurchases of our common stock during the years ended December 31, 2025 and 2024. Approximately $2.1 billion remained available under our 2020 Share Repurchase Program as of December 31, 2025.
86

Table of Contents

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS
CONTRACTUAL OBLIGATIONS
The following table summarizes our contractual obligations as of December 31, 2025, 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.
  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)
$ 414.8  $ 81.9  $ 135.5  $ 49.1  $ 148.3 
Long-term debt obligations (4)
11,359.7  264.6  529.1  2,006.5  8,559.5 
Purchase and other obligations (5)
352.0  243.1  96.7  7.7  4.5 
Defined benefit obligation 118.7  —  —  —  118.7 
Total contractual obligations $ 12,245.2  $ 589.6  $ 761.3  $ 2,063.3  $ 8,831.0 

(1) We lease properties and equipment for use in our operations. 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.
(2) Obligations are presented net of sublease income expected to be received for our vacated portions of various facilities throughout the world.
(3) In connection with our acquisition of Reata in September 2023 we assumed operating lease commitments, including the responsibility for a single-tenant, built-to-suit building. 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 2025 Senior Notes, our 2021 Exchange Offer Senior Notes, our 2020 Senior Notes and our 2015 Senior Notes, including principal and interest payments. 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 includes approximately $58.9 million related to the fair value of net liabilities on derivative contracts.
ROYALTY PAYMENTS
TYSABRI
We are obligated to make contingent payments of 18.0% on annual worldwide net sales of TYSABRI up to $2.0 billion and 25.0% on annual worldwide net sales of TYSABRI that exceed $2.0 billion. Royalty payments are recognized as cost of sales in our consolidated statements of income.
SPINRAZA
We make royalty payments to Ionis on annual worldwide net sales of SPINRAZA using a tiered royalty rate between 11.0% and 15.0%, which are recognized in cost of sales within our consolidated statements of income.
For additional information on our collaboration arrangements with Ionis, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.
QALSODY
We make royalty payments to Ionis on annual worldwide net sales of QALSODY using a tiered royalty rate between 11.0% and 15.0%, which are recognized in cost of sales within our consolidated statements of income.
For additional information on our collaboration arrangements with Ionis, please read Note 19, Collaborative and Other Relationships , to our consolidated financial statements included in this report.
VUMERITY
We make royalty payments to Alkermes on worldwide net sales of VUMERITY using a royalty rate of 15.0% on product that Alkermes has manufactured and 16.0% on product manufactured by us or a third-party designee, which are recognized as cost of sales in our consolidated statements of income.
SKYCLARYS
In connection with our acquisition of Reata in September 2023 we assumed additional contractual obligations related to royalty payments. Reata entered into agreements to pay royalties on annual worldwide net sales of
87

Table of Contents

SKYCLARYS, which will cumulatively range in the low to mid-single digit percentages. Royalty payments are recognized as cost of sales in our consolidated statements of income.
For additional information on our acquisition of Reata, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.
LEASE COMMITMENTS
In March 2025 we entered into a lease agreement with MIT Investment Management Company and BioMed Realty for the lease of approximately 580,000 square feet of office and research and development space located at 75 Broadway, Cambridge, Massachusetts, which will be used as our new global corporate headquarters, as well as integrating our research and development and technical operations teams alongside our North American commercial organization. As part of a multi-year real estate consolidation plan that is expected to result in a reduction of approximately 40% of our real estate footprint in Massachusetts, this new lease is intended to replace two existing leases, both in Cambridge, Massachusetts, including our current corporate headquarters. We expect the initial lease term of approximately 15.5 years to commence on May 31, 2028. The estimated minimum lease payments as a result of the new lease total approximately $1.5 billion over the initial lease term.
For additional information on our leases, please read Note 12, Leases , to our consolidated financial statements included in this report.
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. We may pay up to a total of $650.0 million in contingent development and regulatory milestone payments. The acquisition-date fair value of these milestones was approximately $485.1 million.
During the second quarter of 2025 the first milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for AMR was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the third quarter of 2025. In October 2025 the second milestone related to the fourth patient dosed in a Phase 3 clinical trial of felzartamab for IgAN was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the fourth quarter of 2025.
For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions , to our consolidated financial statements included in this report.
CONTINGENT DEVELOPMENT, REGULATORY AND COMMERCIAL MILESTONE PAYMENTS
Based on our development plans as of December 31, 2025, we could make potential future milestone payments to third parties of up to approximately $5.3 billion, including approximately $0.7 billion in development milestones, approximately $0.8 billion in regulatory milestones and approximately $3.8 billion in commercial milestones, as part of our various collaborations, including licensing and development programs. Payments under these agreements generally become due and payable upon achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones was not considered probable as of December 31, 2025, such contingencies have not been recorded in our financial statements. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones.
If certain research milestones are met, we may pay up to approximately $67.5 million in additional milestones in 2026 under our current agreements, excluding opt-in payments. This amount includes a $45.0 million milestone payment due upon the initiation of a Phase 3 trial of salanersen.
OTHER FUNDING COMMITMENTS
As of December 31, 2025, we have several ongoing clinical studies in various clinical trial stages. 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 $39.3 million in our consolidated balance sheets for expenditures incurred by CROs as of December 31, 2025. We have approximately $524.9 million in cancellable future commitments based on existing CRO contracts as of December 31, 2025.
88

Table of Contents

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, 2025, we have approximately $166.8 million of liabilities associated with uncertain tax positions.
As of December 31, 2024, we accrued income tax liabilities of approximately $234.0 million under the Transition Toll Tax, which was subsequently paid in full in April 2025.
OTHER OFF-BALANCE SHEET ARRANGEMENTS
We do not have any relationships with entities often referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships. We consolidate variable interest entities if we are the primary beneficiary.

NEW ACCOUNTING STANDARDS
For a discussion of new accounting standards please read Note 1, Summary of Significant Accounting Policies, to our consolidated financial statements included in this report.

LEGAL MATTERS
For a discussion of legal matters as of December 31, 2025, 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. GAAP, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and assumptions. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenue and expense. Actual results may differ from these estimates. Other significant accounting policies are outlined in Note 1, Summary of Significant Accounting Policies , to our consolidated financial statements included in this report.
REVENUE RECOGNITION
We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenue following the five-step model prescribed under FASB ASC 606, Revenue from Contracts with Customers : (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations.
PRODUCT REVENUE
In the U.S., we sell our products primarily to wholesale and specialty distributors and specialty pharmacies. In other countries, we sell our products primarily to wholesale distributors, hospitals, pharmacies and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients. In addition, we enter into arrangements with health care providers and payors that provide for government-mandated or privately-negotiated discounts and allowances related to our products.
Product revenue is recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial.
89

Table of Contents

RESERVES FOR DISCOUNTS AND ALLOWANCES
Product revenue is recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. 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.
These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration are calculated based upon a consistent application of our methodology utilizing the expected value method. 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. 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. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.
As of December 31, 2025 and 2024, a 10.0% change in our discounts, contractual adjustments and reserves would have resulted in a decrease of our pre-tax earnings by approximately $355.7 million and $351.9 million, respectively.
In addition to discounts, rebates and product returns, we also maintain certain customer service contracts with distributors and other customers in the distribution channel that provide us with inventory management, data and distribution services, which are generally reflected as a reduction of revenue. To the extent we can demonstrate a separable benefit and fair value for these services we classify these payments in selling, general and administrative expense in our consolidated statements of income.
For additional information on our revenue, please read Note 5, Revenue , to our consolidated financial statements included in this report.
ACQUIRED INTANGIBLE ASSETS, INCLUDING IPR&D
When we purchase a business, the acquired IPR&D is measured at fair value, capitalized as an intangible asset and tested for impairment at least annually, as of October 31, until commercialization, after which time the IPR&D is amortized over its estimated useful life. If we acquire an asset or group of assets with no alternative future use 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.
We have acquired, and expect to continue to acquire, intangible assets through the acquisition of biotechnology companies or through the consolidation of variable interest entities. These intangible assets primarily consist of technology associated with human therapeutic products, IPR&D product candidates and priority review vouchers. When significant identifiable intangible assets are acquired, we generally engage an independent third-party valuation firm to assist in determining the fair values of these assets as of the acquisition date. Management will determine the fair value of less significant identifiable intangible assets acquired. Discounted cash flow models are typically used in these valuations, and these models require the use of significant estimates and assumptions including but not limited to:
• estimating the timing of and expected costs to complete the in-process projects;
• projecting the timing and likelihood of regulatory approvals;
• estimating future cash flow from product sales resulting from completed products and in process projects; and
• developing appropriate discount rates and probability rates by project.
We believe the fair values assigned to the intangible assets acquired are based upon reasonable estimates and assumptions given available facts and circumstances as of the acquisition dates.
90

Table of Contents

If these projects are not successfully developed, the sales and profitability of the company may be adversely affected in future periods. Additionally, the value of the acquired intangible assets may become impaired. 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. The determination of obsolete or excess inventory requires management to make estimates based on assumptions about the future demand of our products, product expiration dates, estimated future sales and our general future plans. If customer demand subsequently differs from our forecasts, we may be required to record additional charges for excess inventory.
Although we believe that the assumptions we use in estimating inventory write-downs are reasonable, no assurance can be given that significant future changes in these assumptions or changes in future events and market conditions could result in different estimates.
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 based on an estimate of undiscounted future cash flow resulting from the use of the assets and eventual disposition.
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 assess qualitative, and, if necessary, quantitative factors, and calculate the fair value using the same methodology as described above under Acquired Intangible Assets, including IPR&D . 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. Acquired IPR&D impairments are recorded within amortization and impairment of acquired intangible assets in our consolidated statements of income.
Based on our most recent impairment assessment we incurred impairment charges of approximately $7.9 million for the year ended December 31, 2025, related to the impairment of compounds acquired from HI-Bio. For the year ended December 31, 2024, we incurred impairment charges of approximately $60.2 million related to the impairment of other clinical programs we acquired from Reata and the termination of Samsung Bioepis' commercialization rights. 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. 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. An analysis of the anticipated lifetime revenue of our marketed products is performed annually during our long-range planning cycle and whenever events or changes in circumstances would significantly affect anticipated lifetime revenue of the relevant products.
For additional information on the impairment charges related to our long-lived assets during 2025, 2024 and 2023, 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. Each reporting period thereafter, we revalue the remaining obligations and record changes in the fair value as an adjustment to (gain) loss on fair value remeasurement of contingent consideration in our consolidated statements of income. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flow and reserves associated with products upon commercialization, changes in the assumed achievement or timing of any cumulative sales-based and development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements represent Level 3 measurements as they are based on significant inputs that are not observable in the market.
91

Table of Contents

Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions described above, could have a material impact on the amount of contingent consideration expense we record in any given period.
INCOME TAXES
We prepare and file income tax returns based on our interpretation of each jurisdiction’s tax laws and regulations. In preparing our consolidated financial statements, we estimate our income tax liability in each of the jurisdictions in which we operate by estimating our actual current tax expense together with assessing temporary differences resulting from differing treatment of items for tax and financial reporting purposes. 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. 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. In making this determination, under the applicable financial accounting standards, we are allowed to consider the scheduled reversal of deferred tax liabilities, projected future taxable income and the effects of tax planning strategies. In the event that actual results differ from our estimates, we adjust our estimates in future periods and we may need to establish a valuation allowance, which could materially impact our consolidated financial position and results of operations.
We account for uncertain tax positions using a “more likely than not” threshold for recognizing and resolving uncertain tax positions. We evaluate uncertain tax positions on a quarterly basis and consider various factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position. We adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Our liabilities for uncertain tax positions can be relieved only if the contingency becomes legally extinguished, through either payment to the taxing authority or the expiration of the statute of limitations, the recognition of the benefits associated with the position meet the “more likely than not” threshold or the liability becomes effectively settled through the examination process. We consider matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews, we have no plans to appeal or litigate any aspect of the tax position and we believe that it is highly unlikely that the taxing authority would examine or re-examine the related tax position. We 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. The results of operations of the acquired company are included in our results of operations beginning on the acquisition date, and assets acquired and liabilities assumed are recognized on the acquisition date at their respective fair values. Any excess of consideration transferred over the net carrying value of the assets acquired and liabilities assumed as of the acquisition date is recognized as goodwill.
We use the multi-period excess earnings method, which is a form of the income approach, utilizing post-tax cash flow and discount rates in estimating the fair value of identifiable intangible assets acquired when allocating the purchase consideration paid for the acquisition. The estimates of the fair value of identifiable intangible assets involve significant judgment by management and include assumptions with measurement uncertainty, such as the amount and timing of projected cash flow, long-term sales forecasts, discount rates and additionally for IPR&D intangible assets, the timing and probability of regulatory and commercial success.
We use the net realizable value method in estimating the fair value of acquired finished goods and work-in-process inventory. Raw materials acquired are valued using the replacement cost method.
Transaction and restructuring costs related to business combinations are expensed as incurred. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. If we determine the assets acquired do not meet the definition of a business, the transaction will be accounted for as an asset acquisition rather than a business combination.
92

Table of Contents

For additional information on our acquisitions, please read Note 2, Acquisitions, to our consolidated financial statements included in this report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to certain risks that may affect our results of operations, cash flow and fair values of assets and liabilities, including volatility in foreign currency exchange rates, interest rate movements and equity price exposure as well as changes in economic conditions in the markets in which we operate as a result of the conflict between Russia and Ukraine and the military conflict in the Middle East. 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. The counterparties to these contracts are major financial institutions, and there is no significant concentration of exposure with any one counterparty.
FOREIGN CURRENCY EXCHANGE RISK
Our results of operations are subject to foreign currency exchange rate fluctuations due to the global nature of our operations. As a result, our consolidated financial position, results of operations and cash flow can be affected by market fluctuations in foreign currency exchange rates, primarily with respect to the Euro, British pound sterling, Canadian dollar, Swiss franc and the Polish złoty.
While the financial results of our global activities are reported in U.S. dollars, the functional currency for most of our foreign subsidiaries is their respective local currency. Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our operating results, often in ways that are difficult to predict. In particular, as the U.S. dollar strengthens versus other currencies, the value of the non-U.S. revenue will decline when reported in U.S. dollars. The impact to net income as a result of a strengthening U.S. dollar will be partially mitigated by the value of non-U.S. expense, which will also decline when reported in U.S. dollars. As the U.S. dollar weakens versus other currencies, the value of the non-U.S. revenue and expense will increase when reported in U.S. dollars.
We have established revenue and operating expense hedging and balance sheet risk management programs to protect against volatility of future foreign currency cash flow and changes in fair value caused by volatility in foreign currency exchange rates.
During the second quarter of 2018 the International Practices Task Force of the Center for Audit Quality categorized Argentina as a country with a projected three-year cumulative inflation rate greater than 100.0%, which indicated that Argentina’s economy is highly inflationary. This categorization did not have a material impact on our results of operations or financial position as of December 31, 2025, and is not expected to have a material impact on our results of operations or financial position in the future.
REVENUE AND OPERATING EXPENSE HEDGING PROGRAM
Our foreign currency hedging program is designed to mitigate, over time, a portion of the impact resulting from volatility in exchange rate changes on revenue and operating expense. We use foreign currency forward contracts and foreign currency options to manage foreign currency risk, with the majority of our forward contracts and options used to hedge certain forecasted revenue and operating expense transactions denominated in foreign currencies in the next 21 months. We do not engage in currency speculation. For a more detailed disclosure of our revenue and operating expense hedging program, please read Note 10, Derivative Instruments, to our consolidated financial statements included in this report.
Our ability to mitigate the impact of foreign currency exchange rate changes on revenue and net income diminishes as significant foreign currency exchange rate fluctuations are sustained over extended periods of time. In particular, devaluation or significant deterioration of foreign currency exchange rates are difficult to mitigate and likely to negatively impact earnings. The cash flow from these contracts are reported as operating activities in our consolidated statements of cash flow.
BALANCE SHEET RISK MANAGEMENT HEDGING PROGRAM
We also use forward contracts to mitigate the foreign currency exposure related to certain balance sheet items. The primary objective of our balance sheet risk management program is to mitigate the exposure of foreign currency denominated net monetary assets and liabilities of foreign affiliates. In these instances, we principally utilize
93

Table of Contents

currency forward contracts. We have not elected hedge accounting for the balance sheet related items. The cash flow from these contracts are reported as operating activities in our consolidated statements of cash flow.
The following quantitative information includes the impact of currency movements on forward contracts used in our revenue, operating expense and balance sheet hedging programs. As of December 31, 2025 and 2024, 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 $278.0 million and $191.7 million, respectively. The estimated fair value change was determined by measuring the impact of the hypothetical exchange rate movement on outstanding forward contracts. Our use of this methodology to quantify the market risk of such instruments is subject to assumptions and the actual impact could be significantly different. The quantitative information about market risk is limited because it does not take into account all foreign currency operating transactions.
CREDIT RISK
Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments, derivatives and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and investments by investing in a broad and diverse range of financial instruments. We have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. We minimize credit risk resulting from derivative instruments by choosing only highly rated financial institutions as counterparties.
We operate in certain countries where weakness in economic conditions, including the effects of the conflict between Russia and Ukraine and the military conflict in the Middle East, can result in extended collection periods. We continue to monitor these conditions, including the volatility associated with international economies and the relevant financial markets, and assess their possible impact on our business. 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, 2025 and 2024.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is contained on pages F-1 through F-79 of this report and is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

ITEM 9A. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING
CONTROLS AND PROCEDURES
We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of December 31, 2025. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that:
(a) the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission's rules and forms; and
(b) such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
94

Table of Contents

In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by a company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:
• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its 2013 Internal Control — Integrated Framework.
Based on our assessment, our management has concluded that, as of December 31, 2025, our internal control over financial reporting is effective based on those criteria.
The effectiveness of our internal control over financial reporting as of December 31, 2025, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their attestation report, which is included herein.

ITEM 9B. OTHER INFORMATION
TRADING ARRANGEMENTS
From time to time, our officers (as defined in Rule 16a-1(f)) and directors may enter into, amend or terminate Rule 10b5-1 or non-Rule 10b5-1 trading arrangements (as each such term is defined in Item 408 of Regulation S-K). During the fourth quarter of 2025 there were no trading arrangements for the purchase or sale of our securities entered into, amended or terminated by our officers and directors.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
95

Table of Contents

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information concerning our executive officers is set forth under the heading Information about our Executive Officers in Item 1 of this report.
Code of Business Conduct and Ethics: The text of our code of business conduct, which includes the code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions, is posted on our website, www.biogen.com, under the “ Corporate Governance ” subsection of the “ Investors ” section of the site. We intend to make all required disclosures regarding any amendments to, or waivers from, provisions of our code of business conduct at the same location of our website.
Insider Trading Policy: We have adopted an insider trading policy governing the purchase, sale and/or other dispositions of our securities and those of public companies in which we do business with by our directors, executive officers, employees and temporary staff, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable NASDAQ listing standards. A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
The response to the remainder of this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Proposal 1 - Election of Directors,” “Corporate Governance” and “ Miscellaneous - Stockholder Proposals ” contained in the proxy statement for our 2026 annual meeting of stockholders.

ITEM 11. EXECUTIVE COMPENSATION
The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Executive Compensation Tables, ” "Compensation Discussion and Analysis" and “Corporate Governance” contained in the proxy statement for our 2026 annual meeting of stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “Stock Ownership” and “Equity Compensation Plan Information” contained in the proxy statement for our 2026 annual meeting of stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The response to this item is incorporated by reference from the discussion responsive thereto in the sections entitled “ Certain Relationships and Related Person Transactions ” and “Corporate Governance ” contained in the proxy statement for our 2026 annual meeting of stockholders.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The response to this item is incorporated by reference from the discussion responsive thereto in the section entitled “ Proposal 2 - Ratification of the Selection of our Independent Registered Public Accounting Firm ” contained in the proxy statement for our 2026 annual meeting of stockholders.
96

Table of Contents

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a. (1) Consolidated Financial Statements:
The following financial statements are filed as part of this report:

Financial Statements Page Number
Consolidated Statements of Income F-2
Consolidated Statements of Comprehensive Income F-3
Consolidated Balance Sheets F-4
Consolidated Statements of Cash Flow F-5
Consolidated Statements of Equity F-6
Notes to Consolidated Financial Statements F-8
Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )
F-80

Certain totals may not sum due to rounding.
(2) Exhibits
The exhibits listed on the Exhibit Index beginning on page 98, which is incorporated herein by reference, are filed or furnished as part of this report or are incorporated into this report by reference.
(3) Financial Statement Schedules
Schedules are omitted because they are not applicable, or are not required, or because the information is included in the consolidated financial statements and notes thereto.

ITEM 16. FORM 10-K SUMMARY
Not applicable.
97

Table of Contents

EXHIBIT INDEX

Exhibit No.    Description
2.1 Agreement and Plan of Merger by and among Reata Pharmaceuticals, Inc., Biogen Inc. and River Acquisition, Inc. dated as of July 28, 2023. Filed as Exhibit 2.1 to our current report on Form 8-K filed July 31, 2023.

3.1    Amended and Restated Certificate of Incorporation, as amended. Filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

3.2 Certificate of Amendment to the Certificate of Incorporation. Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on March 27, 2015.

3.3 Certificate of Amendment of Biogen Inc.'s Amended and Restated Certificate of Incorporation, as amended. Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on June 8, 2021.

3.4 Certificate of Amendment of Biogen Inc.'s Amended and Restated Certificate of Incorporation, as amended. Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on June 25, 2024.

3.5    Fifth Amended and Restated Bylaws of Biogen Inc. Filed as Exhibit 3.1 to our Current Report on Form 8-K filed on December 12, 2023.

4.1 Second Supplemental Indenture, dated April 30, 2020, between Biogen Inc. and U.S. Bank National Association, including the forms of Global Notes attached as Exhibit A and Exhibit B, respectively, thereto. Filed as Exhibit 4.2 to our Current Report on Form 8-K filed on April 30, 2020.

4.2    Reference is made to Exhibit 3.1 for a description of the rights, preferences and privileges of our Series A Preferred Stock and Series X Junior Participating Preferred Stock.

4.3 Indenture between Biogen Inc. and U.S. Bank National Association, dated as of September 15, 2015. Filed as Exhibit 4.1 to our Current Report on Form 8-K filed on September 16, 2015.

4.4 First Supplemental Indenture between Biogen Inc. and U.S. Bank National Association, dated September 15, 2015. Filed as Exhibit 4.2 to our Current Report on Form 8-K filed on September 16, 2015.

4.5 Third Supplemental Indenture, dated February 16, 2021, between Biogen Inc. and U.S. Bank National Association. Filed as Exhibit 4.2 to our Current Report on Form 8-K filed on February 16, 2021.

4.6 Fourth Supplemental Indenture, dated as of May 12, 2025, between the Company and U.S. Bank Trust Company, National Association (as successor to U.S. Bank, National Association), including the forms of Global Notes attached as Exhibit A, Exhibit B and Exhibit C, respectively, thereto. Filed as Exhibit 4.2 to our Current Report on Form 8-K filed on May 12, 2025.

4.7 Description of Securities. Filed as Exhibit 4.6 to our Annual Report on Form 10-K for the year ended December 31, 2023.

10.1 Credit Agreement, dated as of August 12, 2024, among Biogen Inc., Bank of America, N.A., as administrative agent, swing line lender and the L/C issuer, and the other lenders party thereto. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 14, 2024.

10.2 Credit Agreement, dated as of August 28, 2023, among Biogen Inc., JPMorgan Chase Bank N.S., as administrative agent and the other lenders party thereto. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on September 1, 2023.

10.3†    Second Amended and Restated Collaboration Agreement between Biogen Idec Inc. and Genentech, Inc., dated as of October 18, 2010. Filed as Exhibit 10.5 to our Annual Report on Form 10-K for the year ended December 31, 2010.

10.4†    Letter Agreement regarding GA101 financial terms between Biogen Idec Inc. and Genentech, Inc., dated October 18, 2010. Filed as Exhibit 10.6 to our Annual Report on Form 10-K for the year ended December 31, 2010.

10.5 Form of performance share award agreement under the Biogen Inc. 2024 Omnibus Equity Plan. Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

10.6 Form of restricted stock award agreement under the Biogen Inc. 2024 Omnibus Equity Plan. Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

10.7 Form of non-employee director restricted stock unit award agreement under the Biogen Inc. 2024 Omnibus Equity Plan. Filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

10.8*    Biogen Inc. 2017 Omnibus Equity Plan. Filed as Appendix B to our Definitive Proxy Statement on Schedule 14A filed on April 26, 2017.

10.9*    Form of restricted stock unit award agreement under the Biogen Inc. 2017 Omnibus Equity Plan. Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

10.10* Form of performance stock units award agreement under the Biogen Inc. 2017 Omnibus Equity Plan (for grants commencing in July 2019). Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.

10.11* Form of nonqualified stock option award agreement under Biogen Inc. 2017 Omnibus Equity Plan. Filed as Exhibit 10.20 to our Annual Report on Form 10-K for the year ended December 31, 2022.

10.12*    Biogen Idec Inc. 2008 Performance-Based Management Incentive Plan. Filed as Appendix B to our Definitive Proxy Statement on Schedule 14A filed on May 8, 2008.

10.13* Biogen Inc. 2019 Form of Performance-Based Management Incentive Plan, as amended. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.

10.14 Voluntary Board of Directors Savings Plan. Filed as Exhibit 10.14 to our Annual Report on Form 10-K for the year ended December 31, 202 4.

98

Table of Contents

Exhibit No.    Description
10.15 Biogen Inc. Supplemental Savings Plan. Filed as Exhibit 10.15 to our Annual Report on Form 10-K for the year ended December 31, 202 4.

10.16* Biogen Inc. Executive Severance Policy - U.S. Executive Vice President, as amended effective July 13, 2020. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.

10.17* Annual Retainer Summary for Board of Directors (effective January 1, 2020). Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.

10.18* Form of indemnification agreement for directors and executive officers. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 7, 2011.

10.19* Employment Agreement, dated November 10, 2022, by and between Biogen Inc. and Christopher A. Viehbacher. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on November 10, 2022.

10.20* Letter regarding employment arrangement of Michael McDonnell dated July 16, 2020. Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.

10.21* Letter regarding employment arrangement of Susan Alexander dated December 13, 2005. Filed as Exhibit 10.58 to our Annual Report on Form 10-K for the year ended December 31, 2009.

10.22* Letter amending employment arrangement of Susan Alexander dated February 28, 2020. Filed as Exhibit 10.32 to our Annual Report on Form 10-K for the year ended December 31, 2023.

10.23* Letter regarding employment arrangement of Rachid Izzar dated August 1, 2019. Filed as Exhibit 10.33 to our Annual Report on Form 10-K for the year ended December 31, 2023.

10.24* Letter regarding employment arrangement of Nicole Murphy dated January 28, 2022. Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

10.25* Letter regarding employment arrangement of Robin Kramer dated October 28, 2024. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on October 30, 2024.

10.26 Letter regarding employment arrangement of Priya Singhal dated January 3, 2023. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on July 31, 2025.

10.27 Amended and Restated Collaboration Agreement, dated October 22, 2017, between Biogen MA Inc. and Eisai Co., LTD. Filed as Exhibit 10.45 to our Annual Report on Form 10-K for the year ended December 31, 2022.

10.28 First Amendment to Amended and Restated Collaboration Agreement, dated March 13, 2022, between Biogen MA Inc. and Eisai Co., LTD. Filed as Exhibit 10.46 to our Annual Report on Form 10-K for the year ended December 31, 2022.

19.1+ Policy relating to insider trading.

21+    Subsidiaries.

23+    Consent of PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm.

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

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

32.1++    Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97.1
Policy relating to recovery of erroneously awarded compensation. Filed as Exhibit 97.1 to our Annual Report on Form 10-K for the year ended December 31, 2023.

101++    The following materials from Biogen Inc.’s Annual Report on Form 10-K for the year ended December 31, 2025, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flow, (v) the Consolidated Statements of Equity and (vi) Notes to Consolidated Financial Statements.

104 Cover Page Interactive Data File (contained in Exhibit 101)

* Management contract or compensatory plan or arrangement.

† Confidential treatment has been granted or requested with respect to portions of this exhibit.

+ Filed herewith.

 ++ Furnished herewith.

99

Table of Contents

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 

BIOGEN INC.

By: /S/    CHRISTOPHER A. VIEHBACHER
Christopher A. Viehbacher
Chief Executive Officer

Date: February 6, 2026

100

Table of Contents

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name    Capacity   Date

/S/    CHRISTOPHER A. VIEHBACHER
   Director and Chief Executive Officer (principal executive officer)   February 6, 2026
Christopher A. Viehbacher

/S/    ROBIN C. KRAMER    Executive Vice President and Chief Financial Officer (principal financial officer)   February 6, 2026
Robin C. Kramer

/S/    SEAN GODBOUT Vice President, Chief Accounting Officer and Global Corporate Controller
(principal accounting officer) February 6, 2026
Sean Godbout

/S/    CAROLINE D. DORSA
   Director and Chair of the Board of Directors   February 6, 2026
Caroline D. Dorsa

/S/    MARIA C. FREIRE
Director February 6, 2026
Maria C. Freire

/S/    WILLIAM A. HAWKINS
Director February 6, 2026
William A. Hawkins

/S/    SUSAN LANGER
Director February 6, 2026
Susan Langer

/S/    JESUS B. MANTAS
Director February 6, 2026
Jesus B. Mantas

/S/    LLOYD B. MINOR Director February 6, 2026
Lloyd B. Minor

/S/    SIR MENELAS PANGALOS Director February 6, 2026
Sir Menelas Pangalos

/S/    MONISH PATOLAWALA
Director February 6, 2026
Monish Patolawala

/S/    ERIC K. ROWINSKY
Director February 6, 2026
Eric K. Rowinsky

/S/    STEPHEN A. SHERWIN
Director February 6, 2026
Stephen A. Sherwin

101

Table of Contents

BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS

     Page Number
Consolidated Statements of Income    F-2
Consolidated Statements of Comprehensive Income F-3
Consolidated Balance Sheets    F-4
Consolidated Statements of Cash Flow    F-5
Consolidated Statements of Equity    F-6
Notes to Consolidated Financial Statements    F-8
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) F-80

F-1

Table of Contents

BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)

For the Years Ended December 31,
2025 2024 2023
Revenue:
Product revenue, net
$ 7,119.4   $ 7,213.5   $ 7,246.7  
Revenue from anti-CD20 therapeutic programs 1,860.6   1,749.9   1,689.6  
Alzheimer's collaboration revenue 177.7   59.9   —  
Contract manufacturing, royalty and other revenue 732.9   652.6   899.3  
Total revenue 9,890.6   9,675.9   9,835.6  
Cost and expense:
Cost of sales, excluding amortization and impairment of acquired intangible assets 2,404.2   2,310.4   2,533.4  
Research and development 1,778.6   1,980.3   2,445.4  
Acquired in-process research and development, upfront and milestone expense 471.8   61.5   16.6  
Selling, general and administrative 2,433.6   2,403.7   2,549.7  
Amortization and impairment of acquired intangible assets 515.0   446.7   240.6  
Collaboration profit sharing/(loss reimbursement) 290.2   254.4   218.8  

(Gain) loss on fair value remeasurement of contingent consideration 33.6   27.7   —  

Impairment of ROU asset 52.9   —   —  
Restructuring charges 48.6   30.2   218.8  
Gain on sale of priority review voucher, net —   ( 88.6 ) —  
Other (income) expense, net 305.6   343.6   315.5  
Total cost and expense 8,334.1   7,769.9   8,538.8  
Income before income tax (benefit) expense 1,556.5   1,906.0   1,296.8  
Income tax (benefit) expense 263.6   273.8   135.3  
Net income 1,292.9   1,632.2   1,161.5  
Net income attributable to noncontrolling interests, net of tax —   —   0.4  
Net income attributable to Biogen Inc. $ 1,292.9   $ 1,632.2   $ 1,161.1  

Net income per share:
Basic earnings per share attributable to Biogen Inc. $ 8.83   $ 11.21   $ 8.02  
Diluted earnings per share attributable to Biogen Inc. $ 8.79   $ 11.18   $ 7.97  

Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Inc. 146.5   145.6   144.7  
Diluted earnings per share attributable to Biogen Inc. 147.1   145.9   145.6  

See accompanying notes to these consolidated financial statements.
F-2

Table of Contents

BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)

  For the Years Ended December 31,
  2025 2024 2023
Net income attributable to Biogen Inc. $ 1,292.9   $ 1,632.2   $ 1,161.1  
Other comprehensive income (loss):
Unrealized gains (losses) on securities available for sale, net of tax 0.2   —   15.7  
Unrealized gains (losses) on cash flow hedges, net of tax ( 110.5 ) 76.6   ( 40.1 )
Unrealized gains (losses) on pension benefit obligation, net of tax 7.2   ( 14.0 ) ( 1.5 )
Currency translation adjustments, net of tax 57.3   ( 45.1 ) 37.1  
Total other comprehensive income (loss), net of tax ( 45.8 ) 17.5   11.2  
Comprehensive income (loss) attributable to Biogen Inc. 1,247.1   1,649.7   1,172.3  
Comprehensive income attributable to noncontrolling interests, net of tax —   —   0.4  
Comprehensive income (loss) $ 1,247.1   $ 1,649.7   $ 1,172.7  

See accompanying notes to these consolidated financial statements.
F-3

Table of Contents

BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)

As of December 31,
2025 2024
ASSETS
Current assets:
Cash and cash equivalents $ 3,008.5   $ 2,375.0  
Current portion of marketable securities 807.2   —  
Accounts receivable, net of allowance for doubtful accounts of $ 3.0 and $ 2.2 , respectively
1,342.4   1,404.8  
Due from anti-CD20 therapeutic programs 524.6   464.0  
Inventory 2,168.1   2,460.5  
Other current assets 1,123.3   752.5  
Total current assets 8,974.1   7,456.8  
Marketable securities 431.9   —  
Property, plant and equipment, net 3,055.4   3,181.3  
Operating lease assets 265.4   356.4  
Intangible assets, net 9,178.5   9,691.2  
Goodwill 6,491.1   6,478.9  
Deferred tax asset 292.5   324.2  
Investments and other assets 750.6   560.5  
Total assets $ 29,439.5   $ 28,049.3  
LIABILITIES AND EQUITY
Current liabilities:
Current portion of notes payable $ —   $ 1,748.6  
Taxes payable 114.8   548.3  
Accounts payable 432.0   424.2  
Accrued expense and other 2,802.6   2,807.7  
Total current liabilities 3,349.4   5,528.8  
Notes payable 6,286.8   4,547.2  
Deferred tax liability 507.6   190.5  
Long-term operating lease liabilities 290.4   334.5  
Other long-term liabilities 748.5   732.3  
Total liabilities 11,182.7   11,333.3  
Commitments, contingencies and guarantees (Notes 22 and 23)
Equity:
Biogen Inc. shareholders’ equity:
Preferred stock, par value $ 0.001 per share
—   —  
Common stock, par value $ 0.0005 per share
0.1   0.1  
Additional paid-in capital 863.1   569.4  
Accumulated other comprehensive income (loss) ( 182.0 ) ( 136.2 )
Retained earnings 20,552.7   19,259.8  
Treasury stock, at cost; 23.8 million and 23.8 million shares, respectively
( 2,977.1 ) ( 2,977.1 )

Total equity 18,256.8   16,716.0  
Total liabilities and equity $ 29,439.5   $ 28,049.3  

See accompanying notes to these consolidated financial statements.
F-4

Table of Contents

BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(In millions)

For the Years Ended December 31,
  2025 2024 2023
Cash flow from operating activities:
Net income $ 1,292.9   $ 1,632.2   $ 1,161.5  
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization 779.9   673.2   494.8  
Impairment of intangible assets 7.9   60.2   —  
Impairment of ROU asset 52.9   —   —  
Excess and obsolescence charges related to inventory 29.2   101.9   124.4  
Amortization of acquired inventory step-up 240.8   230.0   31.5  
Acquired in-process research and development 85.0   —   —  
Share-based compensation 290.8   291.2   264.2  
Contingent consideration 33.6   27.7   —  
Deferred income taxes 361.6   ( 158.1 ) ( 305.8 )
(Gain) loss on strategic investments 19.3   101.4   277.1  
Gain on sale of priority review voucher, net —   ( 88.6 ) —  
Other 68.3   159.6   148.2  
Changes in operating assets and liabilities, net of effects of business acquired:

Accounts receivable 102.7   222.3   61.3  
Due from anti-CD20 therapeutic programs ( 60.6 ) ( 28.1 ) ( 4.6 )
Inventory ( 64.7 ) ( 273.8 ) ( 130.9 )
Accrued expense and other current liabilities 171.1   24.6   ( 201.6 )
Income tax assets and liabilities ( 958.1 ) 78.5   ( 299.0 )
Other changes in operating assets and liabilities, net ( 248.0 ) ( 178.7 ) ( 73.9 )
Net cash flow provided by (used in) operating activities 2,204.6   2,875.5   1,547.2  
Cash flow from investing activities:
Purchases of property, plant and equipment ( 153.8 ) ( 153.7 ) ( 277.0 )
Proceeds from sales and maturities of marketable securities 23.0   —   7,380.8  
Purchases of marketable securities ( 1,258.3 ) —   ( 5,140.7 )
Acquisition of Reata, net of cash acquired —   —   ( 6,926.1 )
Acquisition of HI-Bio, net of cash acquired —   ( 1,074.8 ) —  
Proceeds from sale of equity interest in Samsung Bioepis —   406.8   788.1  
Proceeds from sale of priority review voucher, net —   88.6   —  
Acquired in-process research and development ( 50.0 ) —   —  
Acquisitions of intangible assets ( 31.6 ) ( 206.1 ) ( 34.4 )
Proceeds from sales of strategic investments 56.7   144.7   119.6  
Other 42.9   ( 4.7 ) ( 11.3 )
Net cash flow provided by (used in) investing activities ( 1,371.1 ) ( 799.2 ) ( 4,101.0 )
Cash flow from financing activities:

Payments related to issuance of stock for share-based compensation arrangements, net ( 10.0 ) ( 31.3 ) ( 44.3 )
Proceeds from borrowings 1,733.1   —   997.2  
Repayments of borrowings ( 1,750.0 ) ( 650.0 ) ( 809.9 )
Net (distribution) contribution to noncontrolling interest —   —   12.3  
Contingent consideration payments ( 280.0 ) —   —  
Other 5.0   ( 2.2 ) ( 6.0 )
Net cash flow provided by (used in) financing activities ( 301.9 ) ( 683.5 ) 149.3  
Net increase (decrease) in cash and cash equivalents 531.6   1,392.8   ( 2,404.5 )
Effect of exchange rate changes on cash and cash equivalents 101.9   ( 67.7 ) 35.1  
Cash and cash equivalents, beginning of the year 2,375.0   1,049.9   3,419.3  
Cash and cash equivalents, end of the year $ 3,008.5   $ 2,375.0   $ 1,049.9  

See accompanying notes to these consolidated financial statements.
F-5

Table of Contents

BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)

For the Year Ended December 31, 2025
  Preferred stock Common stock Additional
paid-in
capital Accumulated
other
comprehensive
income (loss) Retained
earnings Treasury stock Total
equity
  Shares Amount Shares Amount Shares Amount
Balance, December 31, 2024 —   $ —   169.5   $ 0.1   $ 569.4   $ ( 136.2 ) $ 19,259.8   ( 23.8 ) $ ( 2,977.1 ) $ 16,716.0  
Net income —  —  —  —  —  —  1,292.9   —   —  1,292.9  
Other comprehensive income (loss), net of tax —  —  —  —  —  ( 45.8 ) —  —   —  ( 45.8 )

Issuance of common stock under stock option and stock purchase plans —  —  0.3   —  34.0   —  —  —   —  34.0  
Issuance of common stock under stock award plan —  —  0.7   —  ( 44.0 ) —  —  —   —  ( 44.0 )
Compensation related to share-based payments —  —  —  —  303.1   —  —  —   —  303.1  
Other —  —  —  —  0.6   —  —  —   —  0.6  
Balance, December 31, 2025 —   $ —   170.5   $ 0.1   $ 863.1   $ ( 182.0 ) $ 20,552.7   ( 23.8 ) $ ( 2,977.1 ) $ 18,256.8  

For the Year Ended December 31, 2024
  Preferred stock Common stock Additional
paid-in
capital Accumulated
other
comprehensive
income (loss) Retained
earnings Treasury stock Total
equity
Shares Amount Shares Amount Shares Amount
Balance, December 31, 2023 —   $ —   168.7   $ 0.1   $ 302.5   $ ( 153.7 ) $ 17,627.6   ( 23.8 ) $ ( 2,977.1 ) $ 14,799.4  
Net income —  —  —  —  —  —  1,632.2   —  —  1,632.2  
Other comprehensive income (loss), net of tax —  —  —  —  —  17.5   —  —  —  17.5  

Issuance of common stock under stock option and stock purchase plans —  —  0.2   —  36.3   —  —  —  —  36.3  
Issuance of common stock under stock award plan —  —  0.6   —  ( 67.7 ) —  —  —  —  ( 67.7 )
Compensation related to share-based payments —  —  —  —  301.5   —  —  —  —  301.5  
Other —  —  —  —  ( 3.2 ) —  —  —  —  ( 3.2 )
Balance, December 31, 2024 —   $ —   169.5   $ 0.1   $ 569.4   $ ( 136.2 ) $ 19,259.8   ( 23.8 ) $ ( 2,977.1 ) $ 16,716.0  

See accompanying notes to these consolidated financial statements.
F-6

Table of Contents

BIOGEN INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY - (Continued)
(In millions)

For the Year Ended December 31, 2023
Preferred stock Common stock Additional
paid-in
capital Accumulated
other
comprehensive
income (loss)
Retained
earnings Treasury stock Total
Biogen Inc.
shareholders’
equity Noncontrolling
interests Total
equity
Shares Amount Shares Amount Shares Amount
Balance, December 31, 2022 —   $ —   167.9   $ 0.1   $ 73.3   $ ( 164.9 ) $ 16,466.5   ( 23.8 ) $ ( 2,977.1 ) $ 13,397.9   $ ( 9.5 ) $ 13,388.4  
Net income —  —  —  —  —  —  1,161.1   —   —  1,161.1   0.4   1,161.5  
Other comprehensive income (loss), net of tax —  —  —  —  —  11.2   —  —   —  11.2   —  11.2  
Capital contribution from noncontrolling interest —  —  —  —  —  —  —  —   —  —  12.3   12.3  
Deconsolidation of noncontrolling interest —  —  —  —  —  —  —  —   —  —  ( 3.2 ) ( 3.2 )

Issuance of common stock under stock option and stock purchase plans —  —  0.2   —  45.1   —  —  —   —  45.1   —  45.1  
Issuance of common stock under stock award plan —  —  0.6   —  ( 89.5 ) —  —  —   —  ( 89.5 ) —  ( 89.5 )
Compensation related to share-based payments —  —  —  —  274.4   —  —  —   —  274.4   —  274.4  
Other —  —  —  —  ( 0.8 ) —  —  —   —  ( 0.8 ) —  ( 0.8 )
Balance, December 31, 2023 —   $ —   168.7   $ 0.1   $ 302.5   $ ( 153.7 ) $ 17,627.6   ( 23.8 ) $ ( 2,977.1 ) $ 14,799.4   $ —   $ 14,799.4  

See accompanying notes to these consolidated financial statements.
F-7

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1:
Summary of Significant Accounting Policies

References in these notes to "Biogen," the "company," "we," "us" and "our" refer to Biogen Inc. and its consolidated subsidiaries.
Business Overview
Biogen is a global biopharmaceutical company focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases. We have a broad portfolio of medicines to treat MS, have introduced the first approved treatment for SMA, co-developed treatments to address a defining pathology of Alzheimer’s disease and launched the first approved treatment to target a genetic cause of ALS. We market the first and only drug approved in the U.S., the E.U. and certain international markets for the treatment of FA in adults and adolescents aged 16 years and older. We are focused on advancing our pipeline in neurology, specialized immunology and rare diseases. We support our drug discovery and development efforts through internal research and development programs, external collaborations and acquisitions.
Our marketed products include VUMERITY, TYSABRI, TECFIDERA, AVONEX and PLEGRIDY for the treatment of MS; SPINRAZA for the treatment of SMA; SKYCLARYS for the treatment of FA; and QALSODY for the treatment of ALS.
We also have collaborations with Eisai on the commercialization of LEQEMBI for the treatment of Alzheimer's disease and Supernus on the commercialization of ZURZUVAE for the treatment of PPD. 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, follicular lymphoma and, following its approval in October 2025, lupus nephritis; 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.
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.
For additional information on our collaboration arrangements, please read Note 19, Collaborative and Other Relationships , to these consolidated financial statements.
Consolidation
Our consolidated financial statements reflect our financial statements, those of our wholly owned subsidiaries and variable interest entities where we are the primary beneficiary. For consolidated entities where we own or are exposed to less than 100.0 % of the economics, we record net income attributable to noncontrolling interests, net of tax in our consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation.
In determining whether we are the primary beneficiary of a variable interest entity, we apply a qualitative approach that determines whether we have both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. We continuously assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in us consolidating or deconsolidating one or more of our collaborators or partners. In November 2023 we terminated the Neurimmune Agreement, which resulted in the deconsolidation of our variable interest entity, Neurimmune.
Use of Estimates
The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and assumptions. We base our estimates on historical experience and on various other assumptions that we believe are
F-8

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenue and expense. Actual results may differ from these estimates.
Revenue Recognition
We recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenue following the five-step model prescribed under FASB ASC 606, Revenue from Contracts with Customers : (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations.
Product Revenue
In the U.S., we sell our products primarily to wholesale and specialty distributors and specialty pharmacies. In other countries, we sell our products primarily to wholesale distributors, hospitals, pharmacies and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients. In addition, we enter into arrangements with health care providers and payors that provide for government-mandated or privately-negotiated discounts and allowances related to our products.
Product revenue is recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial.
Reserves for Discounts and Allowances
Product revenue is recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate.
Product revenue reserves, which are classified as a reduction in product revenue, are generally characterized in the following categories: discounts, contractual adjustments and returns.
These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration are calculated based upon a consistent application of our methodology utilizing the expected value method. 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. 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. 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.
Discounts include trade term discounts, wholesaler incentives and volume related discounts. Trade term discounts and wholesaler incentives primarily relate to estimated obligations for credits to be granted to wholesalers for remitting payment on their purchases within established incentive periods and credits to be granted to wholesalers for compliance with various contractually-defined inventory management practices, respectively. We determine these reserves based on our historical experience, including the timing of customer payments. Volume related discounts primarily relate to incentives offered to downstream customers who earn discounts based upon the quarterly or annual volume of units purchased.
Contractual adjustments primarily relate to Medicaid, Medicare and managed care rebates in the U.S., pharmacy rebates, co-payment (copay) assistance, VA and PHS discounts, specialty pharmacy program fees and other governmental rebates or applicable allowances.
• Medicaid rebates: relate to our estimated obligations to states under established reimbursement arrangements. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities in our consolidated balance sheets. Our liability for Medicaid rebates consists of estimates for claims
F-9

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

that a state will make for the current quarter, claims for prior quarters that have been estimated for which an invoice has not been received, invoices received for claims from the prior quarters that have not been paid and an estimate of potential claims that will be made for inventory that exists in the distribution channel at period end.
• Governmental rebates: or chargebacks, including VA and PHS discounts, represent our estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices we charge to wholesalers which provide those products. The wholesaler charges us for the difference between what the wholesaler pays for the products and the ultimate selling price to the qualified healthcare providers. Rebate and chargeback reserves are established in the same period as the related revenue is recognized, resulting in a reduction of product revenue and a reduction in the net accounts receivable. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider from the wholesaler, and we generally issue credits for such amounts within a few weeks of the wholesaler notifying us about the resale. Our reserves for VA, PHS and other chargebacks consist of amounts for inventory that exists at the wholesalers that we expect will be sold to qualified healthcare providers and chargebacks that wholesalers have claimed for which we have not issued a credit.
• Managed care rebates: represent our estimated obligations to third parties, primarily pharmacy benefit managers. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities in our consolidated balance sheets. These rebates result from performance-based goals, formulary position and price increase limit allowances (price protection). The calculation of the accrual for these rebates is based on an estimate of the coverage patterns and the resulting applicable contractual rebate rate(s) to be earned over a contractual period.
• Copay assistance: represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance. The calculation of the accrual for copay is based on an estimate of claims and the cost per claim that we expect to receive associated with inventory that exists in the distribution channel at period end.
• Pharmacy rebates: represent our estimated obligations resulting from contractual commitments to sell products to specific pharmacies. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other current liabilities in our consolidated balance sheets. These rebates result from contracted discounts on product purchased or product dispensed. The calculation of the accrual for these rebates is based on an estimate of the pharmacy’s buying or dispensing patterns and the resulting applicable contractual rebate rate(s) to be earned over the contractual period.
• IRA Medicare rebates: relate to our estimated obligation under the IRA for the manufacturer’s portion of the Medicare Part D redesign. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expense and other within our consolidated balance sheets. The calculation of the accrual for these rebates is based on an estimate of our Medicare population and the estimated manufacturer portion of our obligation under the Part D Redesign.
• Other governmental rebates: non-U.S. pharmaceutical taxes or applicable allowances primarily relate to mandatory rebates and discounts in international markets where government-sponsored healthcare systems are the primary payors for healthcare.
Product return reserves are established for returns made by wholesalers and are recorded in the period the related revenue is recognized, resulting in a reduction to product revenue. 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. Expired product return reserves are estimated through a comparison of historical return data to their related sales on a production lot basis. Historical rates of return are determined for each product and are adjusted for known or expected changes in the marketplace specific to each product.
In addition to discounts, rebates and product returns, we also maintain certain customer service contracts with distributors and other customers in the distribution channel that provide us with inventory management, data and distribution services, which are generally reflected as a reduction of revenue. To the extent we can demonstrate a
F-10

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

separable benefit and fair value for these services we classify these payments in selling, general and administrative expense in our consolidated statements of income.
Revenue from Anti-CD20 Therapeutic Programs
Our collaboration with Genentech is within the scope of ASC 808, Collaborative Agreements , which provides guidance on the presentation and disclosure of collaborative arrangements. For purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.
Our share of the pre-tax co-promotion profits on RITUXAN, GAZYVA and LUNSUMIO and royalty revenue on sales of OCREVUS, resulted from an exchange of a license. As we do not have future performance obligations under the license or collaboration agreement, revenue is recognized as the underlying sales occur.
Revenue from anti-CD20 therapeutic programs consist of:
(i)     our share of pre-tax profits and losses in the U.S. for RITUXAN, GAZYVA and LUNSUMIO;
(ii)    royalty revenue on sales of OCREVUS; and
(ii)     other revenue from anti-CD20 therapeutic programs, which consists of our share of pre-tax co-promotion profits on RITUXAN in Canada, royalties on net sales of COLUMVI in the U.S. and royalties on sales of LUNSUMIO outside the U.S.
Pre-tax co-promotion profits on RITUXAN, GAZYVA and LUNSUMIO are calculated and paid to us by Genentech and the Roche Group. Pre-tax co-promotion profits consist of net sales to third-party customers less applicable costs to manufacture, third-party royalty expense, distribution, selling and marketing expense and joint development expense incurred by Genentech and the Roche Group. Our share of the pre-tax profits on RITUXAN, GAZYVA and LUNSUMIO include estimates that are based on information received from Genentech and the Roche Group. These estimates are subject to change and actual results may differ.
We recognize royalty revenue on sales of OCREVUS based on our estimates from third party and market research data of OCREVUS sales occurring during the corresponding period. 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.
Prior to regulatory approval, we record our share of the expense incurred by the collaboration for the development of anti-CD20 products within research and development expense and pre-commercialization costs within selling, general and administrative expense in our consolidated statements of income. After an anti-CD20 product is approved, we record our share of the development and sales and marketing expense related to that product as a reduction of our share of pre-tax profits in revenue from anti-CD20 therapeutic programs.
For additional information on our relationship with Genentech, please read Note 19, Collaborative and Other Relationships, to these consolidated financial statements.
Alzheimer's Collaboration Revenue
Alzheimer's collaboration revenue consists of our 50.0 % share of LEQEMBI product revenue, net and cost of sales, including royalties, as we are not the principal. We began recognizing Alzheimer's collaboration revenue upon the accelerated approval of LEQEMBI in the U.S. during the first quarter of 2023.
Contract Manufacturing, Royalty and Other Revenue
Contract Manufacturing Revenue
We record contract manufacturing revenue primarily from amounts earned under contract manufacturing agreements with our strategic customers. Revenue under contract manufacturing agreements is recognized when the customer obtains control of the product, which may occur at a point in time or over time depending on the terms and conditions of the agreement.
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.
F-11

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As the royalties we receive relate to arrangements that resulted from an exchange of a license and utilize the sales and usage based royalty exception, the royalties are recognized as the underlying sales occur.
Collaborative and Other Relationships
We also have a number of significant collaborative and other third-party relationships for revenue and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates. Where we are the principal on sales transactions with third parties, we recognize revenue, cost of sales and operating expense on a gross basis in their respective lines in our consolidated statements of income. Where we are not the principal on sales transactions with third parties, our share of the revenue, cost of sales and operating expense is recorded on a net basis as a component of other revenue in our consolidated statements of income.
Our development and commercialization arrangements with Genentech, Eisai, Supernus and Samsung Bioepis represent collaborative arrangements as each party is an active participant in one or more joint operating activities and is exposed to significant risks and rewards of these arrangements. These arrangements resulted from an exchange of a license and utilize the sales and usage based royalty exception, as applicable. Therefore, revenue relating to royalties or profit-sharing amounts received is recognized as the underlying sales occur.
For additional information on our collaboration arrangements with Genentech, Eisai, Supernus and Samsung Bioepis, please read Note 19, Collaborative and Other Relationships , to these consolidated financial statements.
Fair Value Measurements
We have certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.
• Level 1  — Fair values are determined utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;
• Level 2  — Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves, foreign currency spot rates and option pricing valuation models; and
• Level 3  — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
The majority of our financial assets have been classified as Level 2, and have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third-party pricing services or option pricing valuation models. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events.
We validate the prices provided by our third-party pricing services by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances. The option pricing valuation models use assumptions within the model, including the term, stock price volatility, constant maturity risk-free interest rate and dividend yield. After completing our validation procedures, we did not adjust or override any fair value measurements provided by our pricing services as of December 31, 2025 and 2024.
Other Assets and Liabilities
The carrying amounts reflected in our consolidated balance sheets for current accounts receivable, due from anti-CD20 therapeutic programs, other current assets, accounts payable and accrued expense and other, approximate fair value due to their short-term maturities.
Cash and Cash Equivalents
We consider only those investments that are highly liquid, readily convertible to cash and that mature within three months from date of purchase to be cash equivalents. As of December 31, 2025, cash equivalents were comprised of money market funds, overnight reverse repurchase agreements, short-term debt securities and commercial paper with maturities less than three months from the date of purchase. As of December 31, 2024, cash equivalents were comprised of money market funds with maturities less than three months from the date of purchase.
F-12

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accounts Receivable
The majority of our accounts receivable arise from product sales and primarily represent amounts due from our wholesale and other third-party distributors, public hospitals, pharmacies and other government entities and have standard payment terms that generally require payment within 30 to 90 days.
We do not adjust our receivables for the effects of a significant financing component at contract inception if we expect to collect the receivables in one year or less from the time of sale.
We provide reserves against accounts receivable for estimated losses that may result from a customer's inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve.
Concentration of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments, derivatives and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and investments by investing in a broad and diverse range of financial instruments as previously defined by us. We have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. We minimize credit risk resulting from derivative instruments by choosing only highly rated financial institutions as counterparties.
Concentrations of credit risk with respect to receivables, which are typically unsecured, are somewhat mitigated due to the wide variety of customers and markets using our products, as well as their dispersion across many different geographic areas. We monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profile. We continue to monitor these conditions and assess their possible impact on our business.
Marketable Securities and Other Investments
Marketable Debt Securities
Available-for-sale marketable debt securities are recorded at fair market value and unrealized gains and losses are included in AOCI in equity, net of related tax effects, unless the security has experienced a credit loss, we have determined that we have the intent to sell the security or we have determined that it is more likely than not that we will have to sell the security before its expected recovery. Realized gains and losses are reported in other (income) expense, net on a specific identification basis.
Marketable Equity Securities and Venture Capital Funds
Our marketable equity securities are recorded at fair market value and unrealized gains and losses are included in other (income) expense, net in our consolidated statements of income. Our marketable equity securities represent investments in publicly traded equity securities and are included in investments and other assets in our consolidated balance sheets.
Our investments in venture capital funds are recorded at net asset value, which approximates fair value, and unrealized gains and losses are included in other (income) expense, net in our consolidated statements of income. The underlying investments of the venture capital funds in which we invest are in equity securities of certain biotechnology companies and are included in investments and other assets in our consolidated balance sheets.
Non-Marketable Equity Securities
We also invest in equity securities of companies whose securities are not publicly traded and where fair value is not readily available. These investments are recorded using either the equity method of accounting or the cost minus impairment adjusted for observable price changes, depending on our ownership percentage and other factors that suggest we have significant influence. We monitor these investments to evaluate whether any increase or decline in their value has occurred, based on the implied value of recent company financings, public market prices of comparable companies and general market conditions. These investments are included in investments and other assets in our consolidated balance sheets.
F-13

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Evaluating Marketable Debt Securities for Other-than-Temporary Impairments
When we hold marketable debt securities, we conduct periodic reviews to identify and evaluate each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses on available-for-sale debt securities that are determined to be temporary, and not related to credit loss, are recorded, net of tax, in AOCI.
For available-for-sale debt securities with unrealized losses, management performs an analysis to assess whether we intend to sell or whether we would more likely than not be required to sell the security before the expected recovery of the amortized cost basis. Where we intend to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is reflected in earnings as an impairment loss.
Regardless of our intent to sell a security, we perform additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where we do not expect to receive cash flows sufficient to recover the amortized cost basis of a security.
Equity Method of Accounting
In circumstances where we have the ability to exercise significant influence over the operating and financial policies of a company in which we have an investment, we utilize the equity method of accounting for recording investment activity. In assessing whether we exercise significant influence, we consider the nature and magnitude of our investment, the voting and protective rights we hold, any participation in the governance of the other company and other relevant factors such as the presence of a collaborative or other business relationship. Under the equity method of accounting, we record in our consolidated statements of income our share of income or loss of the other company. If our share of losses exceeds the carrying value of our investment, we will suspend recognizing additional losses and will continue to do so unless we commit to providing additional funding.
Inventory
Inventories are stated at the lower of cost or net realizable value with cost based on the first-in, first-out method. We classify our inventory costs as long-term when we expect to utilize the inventory beyond our normal operating cycle and include these costs in investments and other assets in our consolidated balance sheets. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in a clinical manufacturing campaign.
Capitalization of Inventory Costs
We capitalize inventory costs associated with our products prior to regulatory approval, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. We consider numerous attributes in evaluating whether the costs to manufacture a particular product should be capitalized as an asset. We assess the regulatory approval process and where the particular product stands in relation to that approval process, including any known safety or efficacy concerns, potential labeling restrictions and other impediments to approval. We evaluate our anticipated research and development initiatives and constraints relating to the product and the indication in which it will be used. We consider our manufacturing environment including our supply chain in determining logistical constraints that could hamper approval or commercialization. We consider the shelf life of the product in relation to the expected timeline for approval and we consider patent related or contract issues that may prevent or delay commercialization. We also base our judgment on the viability of commercialization, trends in the marketplace and market acceptance criteria. Finally, we consider the reimbursement strategies that may prevail with respect to the product and assess the economic benefit that we are likely to realize. We expense previously capitalized costs related to pre-approval inventory upon changes in such judgments, due to, among other potential factors, a denial or significant delay of approval by necessary regulatory bodies.
Obsolescence and Unmarketable 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. If the actual net realizable value is less than that estimated by us, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. Additionally, our products are subject to strict quality control and
F-14

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

monitoring that we perform throughout the manufacturing process. In the event that certain batches or units of product no longer meet quality specifications, we will record a charge to cost of sales to write-down any unmarketable inventory to its estimated net realizable value. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written-down due to unmarketable inventory are charged to cost of sales in our consolidated statements of income.
Property, Plant and Equipment
Property, plant and equipment are carried at cost, subject to reviews for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The cost of normal, recurring or periodic repairs and maintenance activities related to property, plant and equipment are expensed as incurred. The cost for planned major maintenance activities, including the related acquisition or construction of assets, is capitalized if the repair will result in future economic benefits.
Interest costs incurred during the construction of major capital projects are capitalized until the underlying asset is ready for its intended use, at which point the interest costs are amortized as depreciation expense over the life of the underlying asset. We also capitalize certain direct and incremental costs associated with the validation effort required for licensing by regulatory agencies of new manufacturing equipment for the production of a commercially approved drug. These costs primarily include direct labor and material and are incurred in preparing the equipment for its intended use. The validation costs are either amortized over the life of the related equipment or expensed as cost of sales when the product produced in the validation process is sold.
In addition, we capitalize certain internal use computer software development costs. If the software is an integral part of production assets, these costs are included in machinery and equipment and are amortized on a straight-line basis over the estimated useful lives of the related software, which generally range from three to five years .
We generally depreciate or amortize the cost of our property, plant and equipment using the straight-line method over the estimated useful lives of the respective assets, which are summarized as follows:

Asset Category Useful Lives
Land Not depreciated
Buildings 15 to 40  years

Leasehold Improvements Lesser of the useful life or the term of the respective lease
Furniture and Fixtures 5 to 7  years

Machinery and Equipment 5 to 20  years

Computer Software and Hardware 3 to 5  years

When we dispose of property, plant and equipment, we remove the associated cost and accumulated depreciation from the related accounts in our consolidated balance sheets and include any resulting gain or loss in our consolidated statements of income.
Leases
We determine if an arrangement is a lease at contract inception. Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that they will be exercised.
We use the implicit rate when readily determinable and use our incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the commencement date in determining the present value of the lease payments. Our incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease.
The lease payments used to determine our operating lease assets may include lease incentives, stated rent increases and escalation clauses linked to rates of inflation when determinable and are recognized in our operating lease assets in our consolidated balance sheets. Our lease agreements may include both lease and non-lease components, which we account for as a single lease component when the payments are fixed. Variable payments included in the lease agreement are expensed as incurred. For certain equipment leases, such as vehicles, we apply a portfolio approach to effectively account for the operating lease assets and liabilities.
F-15

Table of Contents
BIOGEN INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)