Biogen BIIB · USD

Note 25:Segment InformationWe operate and are managed as one operating segment, and derive revenue from activities related to the discovery, development and delivery of innovative therapies for people living with serious and complex diseases.Our research and development organization is responsible for the research and discovery of new product candidates and supports development and registration efforts for potential future products. Our pharmaceutical, operations and technology organization manages the development of the manufacturing processes, clinical trial supply, commercial product supply, distribution, buildings and facilities. Our commercial organization is responsible for U.S. and international development of our commercial products. We are also supported by corporate staff functions.Our CEO, as the CODM, manages and allocates resources to the operations of our company on a total company basis by assessing the overall level of resources available and deciding how to best deploy these resources across functions, therapeutic areas and research and development projects that are in line with our long-term company-wide strategic goals. In making these decisions, our CEO is provided with and uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. The CODM performs this assessment based on the segment’s net income. Through this analysis, which includes a comparison to budgeted results, the CODM assesses performance and how to allocate resources across the functions discussed above. The measure of segment assets used in determining how to manage and allocate resources is reported within our consolidated balance sheets as total assets.The tables presented below, which were prepared in accordance with the accounting policies discussed in Note 1, Summary of Significant Accounting Policies, contain additional information on enterprise-wide disclosures about product revenue, other revenue and long-lived assets, as well as our segment’s revenue and profits, including significant segment expense and other segment items. Revenue is primarily attributed to individual countries based on location of the customer or licensee.Geographic InformationThe following tables contain certain financial information by geographic area:December 31, 2025(In millions)U.S.Europe(1)GermanyAsiaOtherTotalProduct revenue from external customers$3,547.9 $1,871.6 $853.

Note 5:RevenueProduct RevenueRevenue by product are summarized as follows: For the Years Ended December 31, 202520242023(In millions)UnitedStatesRest ofWorldTotalUnitedStatesRest ofWorldTotalUnitedStatesRest ofWorldTotalMultiple Sclerosis:TECFIDERA$168.5 $511.2 $679.7 $169.2 $797.9 $967.1 $263.1 $749.4 $1,012.5 VUMERITY651.2 95.6 746.8 538.6 89.4 628.0 512.1 64.2 576.3 Total Fumarate819.7 606.8 1,426.5 707.8 887.3 1,595.1 775.2 813.6 1,588.8 AVONEX482.9 212.6 695.5 451.3 256.2 707.5 536.7 274.3 811.0 PLEGRIDY104.9 145.2 250.1 111.4 149.1 260.5 126.2 168.5 294.7 Total Interferon587.8 357.8 945.6 562.7 405.3 968.0 662.9 442.8 1,105.7 TYSABRI965.0 700.4 1,665.4 920.0 795.0 1,715.0 997.9 879.0 1,876.9 FAMPYRA(1)— 1.4 1.4 — 71.7 71.7 — 90.5 90.5 Subtotal: Multiple Sclerosis2,372.5 1,666.4 4,038.9 2,190.5 2,159.3 4,349.8 2,436.0 2,225.9 4,661.9 Rare Disease:SPINRAZA625.5 921.3 1,546.8 625.7 947.5 1,573.2 610.5 1,130.7 1,741.2 SKYCLARYS(2)310.6 209.9 520.5 301.1 81.4 382.5 55.9 — 55.9 QALSODY(3)30.1 56.8 86.9 20.9 11.5 32.4 5.8 0.1 5.9 Subtotal: Rare Disease966.2 1,188.0 2,154.2 947.7 1,040.4 1,988.1 672.2 1,130.8 1,803.0 Biosimilars:BENEPALI— 453.2 453.2 — 479.1 479.1 — 438.8 438.8 IMRALDI— 190.2 190.2 — 213.1 213.1 — 222.1 222.1 FLIXABI— 52.6 52.6 — 63.2 63.2 — 77.4 77.4 BYOOVIZ13.0 19.4 32.4 23.0 13.6 36.6 29.2 2.5 31.7 TOFIDENCE0.7 — 0.7 1.1 — 1.1 — — — Subtotal: Biosimilars13.7 715.4 729.1 24.1 769.0 793.1 29.2 740.8 770.0 Other:ZURZUVAE195.1 — 195.1 72.2 — 72.2 1.6 — 1.6 Other(4)0.4 1.7 2.1 2.8 7.5 10.3 2.4 7.8 10.2 Subtotal: Other195.5 1.7 197.2 75.0 7.5 82.5 4.0 7.8 11.8 Total product revenue, net$3,547.9 $3,571.5 $7,119.4 $3,237.3 $3,976.2 $7,213.5 $3,141.4 $4,105.3 $7,246.7 (1) Effective January 1, 2025, our collaboration and license agreement for FAMPYRA global commercialization rights was terminated.(2) SKYCLARYS became commercially available in the E.U. during the first quarter of 2024.(3) QALSODY became commercially available in the E.U. during the second quarter of 2024.(4) Other includes FUMADERM and ADUHELM.We recognized revenue from two wholesalers accounting for 28.0% and 15.8% of gross product revenue in 2025, 25.9% and 13.4% of gross product revenue in 2024 and 27.0% and 9.9% of gross product revenue in 2023, respectively.As of December 31, 2025, two wholesale distributors individually accounted for approximately 25.4% and 15.2% of net accounts receivable associated with our product sales, as compared to 27.2% and 11.

Note 22:Commitments and ContingenciesRoyalty PaymentsTYSABRIWe 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.SPINRAZAWe 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 these consolidated financial statements.QALSODYWe 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 these consolidated financial statements.VUMERITYWe 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. SKYCLARYSIn 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 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 these consolidated financial statements.Lease CommitmentsIn 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.

Note 13:IndebtednessOur indebtedness is summarized as follows: As of December 31, (In millions)20252024Current portion:4.050% Senior Notes due September 15, 2025$— $1,748.6 Current portion of notes payable$— $1,748.6 Non-current portion:2.250% Senior Notes due May 1, 2030$1,495.7 $1,494.7 5.050% Senior Notes due January 15, 2031398.0 — 5.750% Senior Notes due May 15, 2035645.5 — 5.200% Senior Notes due September 15, 20451,101.5 1,101.1 3.150% Senior Notes due May 1, 20501,475.6 1,475.0 3.250% Senior Notes due February 15, 2051480.3 476.4 6.450% Senior Notes due May 15, 2055690.2 — Non-current portion of notes payable$6,286.8 $4,547.2 As of December 31, 2025, we were in compliance with our senior note covenants.2025 Senior NotesOn May 12, 2025, we issued senior unsecured notes for an aggregate principal amount of $1.75 billion, consisting of the following:•$400.0 million of 5.050% Senior Notes due January 15, 2031, valued at 99.981% of par;•$650.0 million of 5.750% Senior Notes due May 15, 2035, valued at 99.924% of par; and•$700.0 million of 6.450% Senior Notes due May 15, 2055, valued at 99.657% of par.Our 2025 Senior Notes are senior unsecured obligations and may be redeemed at our option at any time at 100% of the principal amount plus accrued interest and, until a specified period before maturity, a specified make-whole amount. Our 2025 Senior Notes contain a change-of-control provision that, under certain circumstances, may require us to purchase our 2025 Senior Notes at a price equal to 101% of the principal amount plus accrued and unpaid interest to the date of repurchase.We incurred approximately $13.9 million of costs associated with this offering which have been recorded as a reduction to the carrying amount of the debt on our consolidated balance sheets. These costs will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. The discounts will be amortized as additional interest expense over the period from issuance through maturity using the effective interest rate method.Interest on our 2031 Senior Notes is payable January 15 and July 15 of each year, commencing January 15, 2026. Interest on our 2035 Senior Notes and 2055 Senior Notes is payable May 15 and November 15 of each year, commencing on November 15, 2025.2023 Term Loan Credit AgreementIn connection with our acquisition of Reata in September 2023 we entered into a $1.5 billion term loan credit agreement.

Note 17:Income TaxesIncome Tax ExpenseIncome before income tax (benefit) expense and the income tax (benefit) expense consist of the following: For the Years Ended December 31,(In millions)202520242023Income before income tax (benefit) expense:Domestic$1,225.2 $853.4 $192.4 Foreign331.3 1,052.6 1,104.4 Total income before income tax (benefit) expense$1,556.5 $1,906.0 $1,296.8 Income tax (benefit) expense:Current:Federal$10.1 $448.9 $377.6 State47.3 50.5 15.1 Foreign(155.4)(67.5)48.4 Total current(98.0)431.9 441.1 Deferred:Federal346.1 (154.5)(587.4)State(25.1)(17.3)(12.7)Foreign40.6 13.7 294.3 Total deferred361.6 (158.1)(305.8)Total income tax (benefit) expense$263.6 $273.8 $135.3 The lower Federal current provision in 2025 reflects the impact of a tax deduction for certain previously deferred capitalized research and development expenditures under the OBBBA and the impact of recording a capital loss on our sale of Sage common stock.Foreign current benefit reflects the non-cash benefit of current year valuation allowance changes.Transition Toll TaxThe Tax Cuts and Jobs Act of 2017 eliminated the deferral of U.S. income tax on the historical unrepatriated earnings by imposing the one-time mandatory deemed repatriation tax on accumulated foreign subsidiaries' previously untaxed foreign earnings. The Transition Toll Tax was assessed on our share of our foreign corporations' accumulated foreign earnings that were not previously taxed. Earnings in the form of cash and cash equivalents were taxed at a rate of 15.5% and all other earnings were taxed at a rate of 8.0%.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.Unremitted EarningsAt December 31, 2025, we considered our earnings not to be permanently reinvested outside the U.S. and therefore recorded deferred tax liabilities associated with an estimate of the total withholding taxes expected as a result of our repatriation of earnings. Other than for earnings, we are permanently reinvested for book/tax basis differences, primarily arising through the impacts of purchase accounting. These permanently reinvested basis differences could reverse through sales of the foreign subsidiaries, as well as various other events, none of which were considered probable as of December 31, 2025. The residual U.S. tax liability, if these differences reverse, would be between $300.0 million and $400.

Note 16:Share-Based PaymentsShare-Based Compensation ExpenseThe following table summarizes share-based compensation expense included in our consolidated statements of income: For the Years Ended December 31,(In millions)202520242023Research and development$115.7 $154.1 $296.7 Selling, general and administrative187.8 198.6 371.7 Subtotal303.5 352.7 668.4 Capitalized share-based compensation costs(12.4)(10.3)(10.2)Share-based compensation expense included in total cost and expense291.1 342.4 658.2 Income tax effect(57.0)(63.4)(132.6)Share-based compensation expense included in net income attributable to Biogen Inc.$234.1 $279.0 $525.6 In connection with our acquisition of HI-Bio in July 2024 we recognized HI-Bio equity-based compensation expense, inclusive of employer taxes, of approximately $56.4 million attributable to the post-acquisition service period, of which $42.5 million was recognized as a charge to research and development expense with the remaining $13.9 million as a charge to selling, general and administrative expense within our consolidated statements of income for the year ended December 31, 2024. These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to HI-Bio employees and required no future services to vest.In connection with our acquisition of Reata in September 2023 we recognized Reata equity-based compensation expense, inclusive of employer taxes, of approximately $393.4 million attributable to the post-acquisition service period, of which $196.4 million was recognized as a charge to selling, general and administrative expense with the remaining $197.0 million as a charge to research and development expense within our consolidated statements of income for the year ended December 31, 2023. These amounts were associated with the accelerated vesting of stock options and RSUs previously granted to Reata employees that required no future services to vest.For additional information on our acquisitions of HI-Bio and Reata, please read Note 2, Acquisitions, to these consolidated financial statements.The following table summarizes share-based compensation expense associated with each of our share-based compensation programs: For the Years Ended December 31,(In millions)202520242023Time-vested restricted stock units$249.3 $236.4 $220.0 Performance stock units settled in stock42.3 48.4 35.5 Performance stock units settled in cash— (2.5)6.8 Employee stock purchase plan8.4 9.7 10.5 Stock options3.5 3.

Note 12:LeasesWe lease real estate, including laboratory and office space, and certain equipment. Our leases have remaining lease terms ranging from less than one year to twenty-two years. Certain leases include one or more options to renew, exercised at our sole discretion, with renewal terms that can extend the lease term from less than one year to fifteen years.In addition, we sublease certain real estate to third parties. Our sublease portfolio consists of operating leases, with remaining lease terms ranging from three years to four years.All of our leases qualify as operating leases. The following table summarizes the presentation in our consolidated balance sheets of our operating leases:As of December 31, (In millions)Balance sheet location20252024Assets:Operating lease assetsOperating lease assets$265.4 $356.4 LiabilitiesCurrent operating lease liabilitiesAccrued expense and other$80.4 $86.4 Non-current operating lease liabilitiesLong-term operating lease liabilities290.4 334.5 Total operating lease liabilities$370.8 $420.9 The following table summarizes the effect of lease costs in our consolidated statements of income:For the Years Ended December 31,(In millions)Income Statement Location202520242023Operating lease costResearch and development$0.9 $2.4 $2.0 Selling, general and administrative100.7 110.1 128.1 Variable lease costResearch and development0.1 0.4 0.5 Selling, general and administrative34.5 31.2 37.3 Sublease incomeSelling, general and administrative(9.6)(14.8)(23.5)Other (income) expense, net(4.0)(4.0)(4.1)Net lease cost$122.6 $125.3 $140.3 Variable lease cost primarily related to operating expense, taxes and insurance associated with our operating leases. As these costs are generally variable in nature, they are not included in the measurement of the operating lease asset and related lease liability.The minimum lease payments for the next five years and thereafter are expected to be as follows:(In millions)As of December 31, 20252026$94.1 202797.5 202856.4 202926.1 203023.1 Thereafter148.3 Total lease payments445.5 Less: interest74.7 Present value of operating lease liabilities$370.8 The weighted average remaining lease term and weighted average discount rate of our operating leases are as follows:As of December 31, 20252024Weighted average remaining lease term in years7.117.20Weighted average discount rate4.6 %4.

Note 2:AcquisitionsAlcyone 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. Under the terms of this acquisition, we will oversee the end-to-end development, manufacturing and commercialization of ThecaFlex DRx.Alcyone's remaining therapeutic assets were divested from Alcyone into Neela Therapeutics, Inc., a newly formed independent company, prior to the closing of this acquisition.Human Immunology BiosciencesOn July 2, 2024, we completed the acquisition of all of the issued and outstanding shares of HI-Bio, a privately-held clinical-stage biotechnology company focused on targeted therapies for patients with severe immune-mediated diseases. HI-Bio's lead asset, felzartamab, an anti-CD38 antibody, is currently being evaluated for several indications, including three leading indications, AMR, PMN and IgAN. Felzartamab has received Breakthrough Therapy Designation and ODD from the FDA for development in the treatment of PMN and AMR. Subsequent to our acquisition, felzartamab received ODD in the E.U. in PMN, IgAN and solid organ transplantation. The acquisition of HI-Bio is expected to augment our pipeline and build on our expertise in immunology.