View Filing Data

Document and Company Information - USD ($)	6 Months Ended
Jun. 30, 2009	Jul. 13, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	Biogen Idec Inc.
Entity Central Index Key	0000875045
Document Type	10-Q
Document Period End Date	Jun. 30, 2009
Amendment Flag	false
Amendment Description	N/A
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float	$ 13,005,469,098.8
Entity Common Stock, Shares Outstanding		288,855,922

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008	Jun. 30, 2009	Jun. 30, 2008
Revenues:
Product	$ 790,970	$ 684,486	$ 1,524,378	$ 1,349,556
Unconsolidated joint business	275,570	278,822	554,388	526,045
Other revenues	26,749	30,136	51,008	60,029
Total revenues	1,093,289	993,444	2,129,774	1,935,630
Costs and expenses:
Cost of sales, excluding amortization of acquired intangible assets	90,721	92,401	188,918	193,335
Research and development	416,453	252,259	695,931	510,491
Selling, general and administrative	220,829	245,689	442,660	461,518
Collaboration profit sharing	49,138	33,429	91,911	54,835
Amortization of acquired intangible assets	93,234	72,869	182,482	147,650
Acquired in-process research and development	0	0	0	25,000
Total costs and expenses	870,375	696,647	1,601,902	1,392,829
Income from operations	222,914	296,797	527,872	542,801
Other income (expense), net	14,680	(4,018)	21,526	(938)
Income before income tax expense	237,594	292,779	549,398	541,863
Income tax expense	92,709	84,706	157,934	167,983
Net income	144,885	208,073	391,464	373,880
Net income attributable to noncontrolling interest, net of tax	2,040	1,445	4,632	4,155
Net income attributable to Biogen Idec Inc.	$ 142,845	$ 206,628	$ 386,832	$ 369,725
Basic earnings per share attributable to Biogen Idec Inc.	$ 0.49	$ 0.71	$ 1.34	$ 1.26
Diluted earnings per share attributable to Biogen Idec Inc.	$ 0.49	$ 0.7	$ 1.33	$ 1.24
Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Idec Inc.	288,615	290,356	288,162	293,268
Diluted earnings per share attributable to Biogen Idec Inc.	290,359	293,476	290,014	296,554

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$ 786,804	$ 622,385
Marketable securities	836,270	719,586
Collateral received for loaned securities	0	29,991
Accounts receivable, net	511,286	446,665
Due from unconsolidated joint business	198,206	206,925
Loaned securities	0	29,446
Inventory	268,529	263,602
Other current assets	143,183	139,400
Total current assets	2,744,278	2,458,000
Marketable securities	1,047,611	891,406
Property, plant and equipment, net	1,608,660	1,594,754
Intangible assets, net	1,978,519	2,161,058
Goodwill	1,138,621	1,138,621
Investments and other assets	259,507	235,152
Total assets	8,777,196	8,478,991
Current liabilities:
Collateral payable on loaned securities	0	29,991
Accounts payable	210,941	107,417
Taxes payable	81,594	223,260
Accrued expenses and other	496,694	534,887
Current portion of notes payable and line of credit	14,697	27,667
Total current liabilities	803,926	923,222
Notes payable and line of credit	1,085,607	1,085,431
Long-term deferred tax liability	310,962	356,017
Other long-term liabilities	330,996	280,369
Total liabilities	2,531,491	2,645,039
Commitments and contingencies
Equity:
Preferred stock, par value $0.001 per share	0	0
Common stock, par value $0.0005 per share	149	149
Additional paid-in capital	6,142,936	6,073,957
Accumulated other comprehensive income (loss)	11,293	(11,106)
Retained earnings	516,632	270,180
Treasury stock, at cost	(458,472)	(527,097)
Total Biogen Idec Inc. shareholders' equity	6,212,538	5,806,083
Noncontrolling interest	33,167	27,869
Total equity	6,245,705	5,833,952
Total liabilities and equity	$ 8,777,196	$ 8,478,991

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2009	Jun. 30, 2008
Cash flows from operating activities:
Net income	$ 391,464	$ 373,880
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization of property, plant and equipment and intangible assets	248,877	212,471
Acquired in-process research and development	0	25,000
Share-based compensation	78,892	67,647
Non-cash interest (income) expense and foreign exchange remeasurement loss (gain), net	(7,592)	12,151
Deferred income taxes	(42,772)	(14,757)
Realized gain on sale of marketable securities and strategic investments	(15,434)	(5,928)
Write-down of inventory to net realizable value	11,475	9,838
Impairment of marketable securities, investments and other assets	10,002	15,451
Excess tax benefit from stock options	(2,800)	(18,448)
Changes in operating assets and liabilities, net:
Accounts receivable	(63,842)	(86,302)
Due from unconsolidated joint business	8,719	(17,535)
Inventory	(14,353)	(28,187)
Other assets	(5,537)	(7,427)
Accrued expenses and other current liabilities	22,950	101,412
Other liabilities and taxes payable	(90,748)	3,741
Net cash flows provided by operating activities	529,301	643,007
Cash flows from investing activities:
Purchases of marketable securities	(1,869,415)	(1,060,159)
Proceeds from sales and maturities of marketable securities	1,637,562	1,391,949
Collateral received under securities lending	29,991	61,253
Acquisitions, net of cash acquired	0	(25,000)
Purchases of property, plant and equipment	(71,721)	(157,093)
Purchases of other investments	(35,202)	(11,611)
Proceeds from the sale of a strategic equity investment	5,565	15
Net cash flows (used in) provided by investing activities	(303,220)	199,354
Cash flows from financing activities:
Purchase of treasury stock	(57,631)	(559,767)
Proceeds from issuance of stock for share-based compensation arrangements	24,387	89,532
Change in cash overdraft	7,525	873
Excess tax benefit from stock options	2,800	18,448
Proceeds from borrowings	0	986,980
Repayment of borrowings	(10,867)	(1,512,474)
Obligation under securities lending	(29,991)	(61,253)
Net cash flows used in financing activities	(63,777)	(1,037,661)
Net increase (decrease) in cash and cash equivalents	162,304	(195,300)
Effect of exchange rate changes on cash and cash equivalents	2,115	2,131
Cash and cash equivalents, beginning of the period	622,385	659,662
Cash and cash equivalents, end of the period	$ 786,804	$ 466,493

Business Overview

6 Months Ended

Jun. 30, 2009

Business Overview [Abstract]

Business Overview


1.	Business Overview

Overview

Biogen Idec Inc. (“Biogen Idec,” “we,” “us” or “the Company”) is a global biotechnology company that creates new standards of care in therapeutic areas with high unmet medical needs. We currently have four marketed products. Our marketed products are used for the treatment of multiple sclerosis, or MS, non-Hodgkin’s lymphoma, or NHL, rheumatoid arthritis, or RA, Crohn’s disease and psoriasis, which are summarized in the table below.


Product		Indications

*AVONEX^®*		Relapsing MS
(interferon beta-1a)


RITUXAN^®*		Certain B-cell NHL
(rituximab)		RA


TYSABRI^®**		Relapsing MS
(natalizumab)		Crohn’s disease


*FUMADERM^®*		Severe psoriasis
(dimethylfumarate and monoethylfumarate salts)


*		Outside the United States, Canada and Japan, MabThera is the trade name for rituximab. We refer to rituximab, RITUXAN and MabThera collectively as RITUXAN.

**		TYSABRI is indicated in the United States for the treatment of some patients with moderately to severely active Crohn’s disease.

Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting of only normal recurring accruals, necessary for a fair statement of our financial position, results of operations and cash flows. The information included in this quarterly report on Form 10-Q should be read in conjunction with our consolidated financial statements and the accompanying notes included in our annual report on Form 10-K for the year ended December 31, 2008. Our accounting policies are described in the “Notes to Consolidated Financial Statements” in our 2008 annual report on Form 10-K and updated, as necessary, in this Form 10-Q. The year-end consolidated balance sheet data presented for comparative purposes was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. The results of operations for the three and six months ended June 30, 2009 are not necessarily indicative of the operating results for the full year or for any other subsequent interim period.

Effective January 1, 2009, we implemented Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment to ARB No. 51, or SFAS 160. This standard changed the accounting for and reporting of minority interest (now called noncontrolling interest) in our consolidated financial statements. Upon adoption, certain prior period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications did not have a material impact on our previously reported financial position or results of operations. Refer to Note 8, Equity, and Note 12, Other Income (Expense), Net, of this Form 10-Q for additional information on the adoption of SFAS 160.

Principles of Consolidation

The consolidated financial statements reflect our financial statements, those of our wholly-owned subsidiaries and of our joint ventures in Italy and Switzerland, Biogen Dompé SRL and Biogen Dompé Switzerland Gmbh, respectively. In accordance with the Financial Accounting Standards Board, or FASB, Interpretation No. 46 (Revised 2003), Consolidation of Variable Interest Entities, or FIN 46(R), we consolidate variable interest entities in which we are the primary beneficiary. For such consolidated entities in which we own less than a 100% interest, we record net income attributable to noncontrolling interest (minority interest) in our consolidated statement of income equal to the percentage of ownership of the respective noncontrolling owners. All material intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States requires our management to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition and related allowances, marketable securities, derivatives and hedging activities, inventory, impairments of long-lived assets, including intangible assets, impairments of goodwill, income taxes including the valuation allowance for deferred tax assets, valuation of long-lived assets and investments, research and development, contingencies and litigation, and share-based payments. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Subsequent Events

Effective this quarter, we implemented Statement of Financial Accounting Standards No. 165, Subsequent Events, or SFAS 165. This standard establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. The adoption of SFAS 165 did not impact our financial position or results of operations. We evaluated all events or transactions that occurred after June 30, 2009 up through July 16, 2009, the date we issued these financial statements. During this period we did not have any material recognizable subsequent events. However, we did have a nonrecognizable subsequent event related to our collaboration agreement with Cardiokine. Refer to Note 13, Collaborations, for additional information.

Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2009

Intangible Assets and Goodwill [Abstract]

Intangible Assets and Goodwill


4.	Intangible Assets and Goodwill

Intangible assets and goodwill, net of accumulated amortization, impairment charges and adjustments, are as follows (in millions):


			As of June 30,							As of December 31,
			2009							2008
	Estimated				Accumulated							Accumulated
	Life		Cost		Amortization			Net		Cost		Amortization			Net

Out-licensed patents		12 years	$	578.0	$	(274.3	)	$	303.7	$	578.0	$	(250.3	)	$	327.7
Core/developed technology		15-20 years		3,005.3		(1,397.1	)		1,608.2		3,005.3		(1,241.0	)		1,764.3
Trademarks and tradenames		Indefinite		64.0		—			64.0		64.0		—			64.0
In-licensed patents		14 years		3.0		(1.0	)		2.0		3.0		(0.9	)		2.1
Assembled workforce		4 years		2.1		(1.5	)		0.6		2.1		(1.2	)		0.9
Distribution rights		2 years		12.7		(12.7	)		—		12.7		(10.6	)		2.1

Total intangible assets			$	3,665.1	$	(1,686.6	)	$	1,978.5	$	3,665.1	$	(1,504.0	)	$	2,161.1

Goodwill		Indefinite	$	1,138.6	$	—		$	1,138.6	$	1,138.6	$	—		$	1,138.6

Intangible Assets

Our intangible assets consist of patents, licenses, core/developed technology, trademarks, tradenames, assembled workforce, and distribution rights, the majority of which arose in connection with the merger of Biogen Inc. and Idec Pharmaceuticals Corporation, or the Merger. These intangible assets were recorded at fair value and are stated net of accumulated amortization and impairments.

Intangible assets related to patents, licenses, core/developed technology, assembled workforce, and distribution rights are amortized over their remaining estimated useful lives, ranging from 2 to 20 years. The useful lives of our assets are primarily based on the legal or contractual life of the underlying patent or contract, which does not include additional years for the extension or renewal of the contract or patent. Our amortization policy for intangible assets is based on the principles in Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, or SFAS 142, which requires that the amortization of intangible assets reflect the pattern that the economic benefits of the intangible assets are consumed.

Effective January 1, 2009, we implemented FASB Staff Position (“FSP”) FAS 142-3, Determination of the Useful Life of Intangible Assets, or FSP FAS 142-3. FSP FAS 142-3 amends SFAS 142 and provides guidance for determining the useful life of a recognized intangible asset and requires enhanced disclosures so that users of financial statements are able to assess the extent to which the expected future cash flows associated with the asset are affected by our intent and ability to renew or extend the arrangement. The adoption of this FSP did not impact our financial position or results of operations as this standard was required to be implemented prospectively; however, this standard may impact us in subsequent periods.

Our most significant intangible asset is the core technology related to our AVONEX product. We believe the economic benefit of our core technology is consumed as revenue is generated from our AVONEX product. An analysis of the anticipated product sales of AVONEX is performed annually during our long range planning cycle. The results of this forecast serve as the basis for our assumptions used in the economic consumption amortization model for our core technology intangible assets. Although we believe our process has allowed us to reliably determine our best estimate of the pattern in which we will consume the economic benefits of the core technology intangible assets, the model could result in deferring amortization charges to future periods in certain instances, including the impact of continued sales of the product at a nominal level after patent expiration. Consequently, in establishing our methodology, we considered models that would prevent deferring amortization charges to future periods such as the model described in paragraph 8 of Statement of Financial Accounting Standards No. 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed, or SFAS 86. In order to ensure amortization charges are not unreasonably deferred to future periods, we use the straight-line method to determine the minimum annual amount of amortization expense, or the minimum amount. At the time of the Merger we estimated a useful life of 15 years (2018) based on the patent lives of AVONEX across various countries. The minimum amount is recalculated each year based on the remaining unamortized balance of the intangible asset and the years remaining to 2018. The results of the long range planning process determine whether amortization will be based on an economic consumption model or the minimum amount and, thus, the amount of amortization for the next four quarters. Amortization is currently based upon the economic consumption model.

Intangible assets related to trademarks and tradenames have indefinite lives, and as a result are not amortized, but are subject to review for impairment. 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.

Amortization expense was $93.2 million and $182.5 million for the three months and six months ended June 30, 2009, respectively, as compared to $72.9 million and $147.7 million, respectively, for the prior year comparative periods. We did not record a charge related to acquired in-process research and development, or IPR&D, during the three and six months ended June 30, 2009, respectively, or during the three months ended June 30, 2008. In the first quarter of 2008, we recorded an IPR&D charge of $25.0 million related to a HSP90-related milestone payment made to the former shareholders of Conforma Therapeutics, Inc., or Conforma, pursuant to the terms of our acquisition of Conforma in 2006.

Fair Value Measurements

6 Months Ended

Jun. 30, 2009

Fair Value Measurements [Abstract]

Fair Value Measurements


5.	Fair Value Measurements

Effective January 1, 2008, we implemented Statement of Financial Accounting Standards No. 157, Fair Value Measurements, or SFAS 157, for financial assets and liabilities that are remeasured and reported at fair value at each reporting period, and non-financial assets and liabilities that are remeasured and reported at fair value at least annually. In accordance with the provisions of FSP FAS 157-2, Effective Date of FASB Statement No. 157, we elected to defer until January 1, 2009 implementation of SFAS 157 as it relates to our non-financial assets and liabilities that are recognized and disclosed at fair value in the financial statements on a non-recurring basis.

The adoption of SFAS 157 for our non-financial assets and liabilities that are remeasured at fair value on a non-recurring basis did not have a material impact on our financial position or results of operations upon adoption; however, this standard may impact us in subsequent periods and require additional disclosures.

Effective this quarter, we implemented FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, or FSP FAS 157-4. FSP FAS 157-4 provides additional guidelines for making fair value measurements more consistent with the principles presented in SFAS 157 and provides authoritative guidance in determining whether a market is active or inactive, and whether a transaction is distressed. This FSP is applicable to all assets and liabilities (i.e. financial and nonfinancial) and requires enhanced disclosures, including interim and annual disclosure of the input and valuation techniques (or changes in techniques) used to measure fair value and the defining of the major security types comprising debt and equity securities held based upon the nature and risk of the security. The adoption of this FSP did not impact our financial position or results of operations; however, adoption has enhanced disclosures for our investments in marketable debt securities and resulted in the reclassification of certain amounts included within our previously reported disclosures to conform to the presentation adopted in the current year.

Effective this quarter, we have also implemented FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, or FSP FAS 107-1. FSP FAS 107-1 amended Statement of Financial Accounting Standards No. 107, Disclosures about Fair Value of Financial Instruments, and APB Opinion No. 28, Interim Financial Reporting, to require disclosures about the fair value of financial instruments in interim as well as in annual financial statements. The adoption of this standard has resulted in the disclosure of the fair values attributable to our debt instruments within our interim report. Since this FSP addresses disclosure requirements, the adoption of this FSP did not impact our financial position or results of operations.

Summary of Assets and Liabilities Recorded at Fair Value

The tables below present information about our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2009 and December 31, 2008 and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for the asset or liability.

A majority of our financial assets and liabilities have been classified as Level 2. These assets and liabilities have been initially valued at the transaction price and subsequently valued typically utilizing third party pricing services. The pricing services use many inputs to determine value, including reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates, other industry, and economic events. We validate the prices provided by our third party pricing services by reviewing their pricing methods and matrices, obtaining market values from other pricing sources, and analyzing pricing data in certain instances. The fair values of our cash equivalents, derivative contracts, marketable debt securities, and plan assets for deferred compensation are determined through market and observable sources and have been classified as Level 2. After completing our validation procedures, we did not adjust or override any fair value measurements provided by our pricing services as of June 30, 2009 and December 31, 2008.

The following tables set forth our financial assets and liabilities that were recorded at fair value (in millions):


							Significant
	Balance as of		Quoted Prices in		Significant Other		Unobservable
	June 30,		Active Markets		Observable Inputs		Inputs
Description	2009		(Level 1)		(Level 2)		(Level 3)

Assets:
Cash equivalents	$	670.3	$	—	$	670.3	$	—
Marketable debt securities:
Corporate debt securities		412.6		—		412.6		—
Government securities		1,267.5		—		1,267.5		—
Mortgage and other asset backed securities		203.8		—		203.8		—
Strategic investments		5.7		5.7		—		—
Venture capital investments		21.6		—		—		21.6
Derivative contracts		0.3		—		0.3		—
Plan assets for deferred compensation		11.9		—		11.9		—

Total	$	2,593.7	$	5.7	$	2,566.4	$	21.6

Liabilities:
Derivative contracts		31.8		—		31.8		—

Total	$	31.8	$	—	$	31.8	$	—


							Significant
	Balance as of		Quoted Prices in		Significant Other		Unobservable
	December 31,		Active Markets		Observable Inputs		Inputs
Description	2008		(Level 1)		(Level 2)		(Level 3)

Assets:
Cash equivalents	$	500.9	$	—	$	500.9	$	—
Marketable debt securities:
Corporate debt securities		328.5		—		328.5		—
Government securities		1,005.0		—		1,005.0		—
Mortgage and other asset backed securities		306.9		—		306.9		—
Strategic investments		4.6		4.6		—		—
Venture capital investments		23.9		—		—		23.9
Derivative contracts		1.9		—		1.9		—
Plan assets for deferred compensation		13.3		—		13.3		—

Total	$	2,185.0	$	4.6	$	2,156.5	$	23.9

Liabilities:
Derivative contracts		46.0		—		46.0		—

Total	$	46.0	$	—	$	46.0	$	—

Our strategic investments are investments in publicly traded equity securities where fair value is readily determinable.

The following table provides a roll forward of the fair value of our venture capital investments, where fair value is determined by Level 3 inputs (in millions):


	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
Description	2009			2008			2009			2008

Beginning Balance	$	24.3		$	24.9		$	23.9		$	28.1
Total net unrealized gains (losses) included in earnings		(2.8	)		(1.2	)		(3.1	)		(4.8	)
Purchases, issuances, and settlements		0.1			0.9			0.8			1.3

Ending Balance	$	21.6		$	24.6		$	21.6		$	24.6

Our venture capital investments are the only assets where we used Level 3 inputs to determine the fair value. Venture capital investments represented approximately 0.2% and 0.3% of total assets as of June 30, 2009 and December 31, 2008, respectively. The underlying assets in these funds are initially measured at transaction prices and subsequently valued using the pricing of recent financing or by reviewing the underlying economic fundamentals and liquidation value of the companies. Gains and losses (realized and unrealized) included in earnings for the period are reported in other income (expense), net.

The carrying amounts reflected in the consolidated balance sheets for cash, accounts receivable, due from unconsolidated joint business, other current assets, accounts payable, accrued expenses, and other approximate fair value due to their short-term nature.

Summary of Liabilities Recorded at Carrying Value

The fair and carrying value of our debt instruments are detailed as follows (in millions):


	As of June 30, 2009				As of December 31, 2008
	Fair		Carrying		Fair		Carrying
	Value		Value		Value		Value

Credit line from Dompé	$	16.6	$	16.9	$	16.4	$	16.8
Notes payable to Fumedica		28.8		28.1		37.5		38.5
6.0% Senior Notes due 2013		458.7		449.6		429.8		449.6
6.875% Senior Notes due 2018		561.6		605.7		562.4		608.2

Total	$	1,065.7	$	1,100.3	$	1,046.1	$	1,113.1

The fair values of our debt instruments were estimated using market observable inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values.

Financial Instruments

6 Months Ended

Jun. 30, 2009

Financial Instruments [Abstract]

Financial Instruments


6.	Financial Instruments

Financial instruments that potentially subject us to concentrations of credit risk are accounts receivable and marketable securities. The majority of our accounts receivable are payable by wholesale distributors and large pharmaceutical companies and collateral is generally not required from these large customers. We monitor the financial performance and credit worthiness of our large customers so that we can properly assess and respond to changes in their credit profile. Our portfolio of marketable securities is subject to concentration limits set within our investment policy that help to mitigate our credit exposure.

Marketable Securities, including Strategic Investments

The following is a summary of our marketable securities and strategic investments (in millions):


			Gross		Gross
	Fair		Unrealized		Unrealized			Amortized
As of June 30, 2009:	Value		Gains		Losses			Cost

Available-for-sale
Corporate debt securities
Current	$	189.9	$	1.7	$	—		$	188.2
Non-current		222.7		5.2		(0.4	)		217.9
Government securities
Current		642.1		1.9		—			640.2
Non-current		625.4		6.3		(0.3	)		619.4
Mortgage and other asset backed securities
Current		4.3		0.1		—			4.2
Non-current		199.5		5.5		—			194.0

Total available-for-sale securities	$	1,883.9	$	20.7	$	(0.7	)	$	1,863.9

Other Investments
Strategic investments, non-current	$	5.7	$	2.1	$	—		$	3.6


			Gross		Gross
	Fair		Unrealized		Unrealized			Amortized
As of December 31, 2008:	Value		Gains		Losses			Cost

Available-for-sale
Corporate debt securities
Current	$	128.2	$	0.4	$	—		$	127.8
Non-current		200.3		2.6		—			197.7
Government securities
Current		582.8		1.5		—			581.3
Non-current		422.2		8.7		—			413.5
Mortgage and other asset backed securities
Current		13.9		—		—			13.9
Non-current		293.0		3.3		(0.3	)		290.0

Total available-for-sale securities	$	1,640.4	$	16.5	$	(0.3	)	$	1,624.2

Other Investments
Strategic investments, non-current	$	4.6	$	0.5	$	(0.1	)	$	4.2

In the tables above, as of June 30, 2009 and December 31, 2008, government securities included $274.8 million and $139.1 million, respectively, of Federal Deposit Insurance Corporation, or FDIC, guaranteed senior notes issued by financial institutions under the Temporary Liquidity Guarantee Program. In addition, the balances as of December 31, 2008 include amounts related to our loaned securities.

As of June 30, 2009, we held mortgage and other asset backed securities totaling $203.8 million. No non-agency mortgage backed securities were held as of June 30, 2009. As of December 31, 2008, we held total mortgage and other asset backed securities totaling $306.8 million, which included $66.5 million of non-agency mortgage backed securities.

Certain commercial paper and short-term debt securities with original maturities of less than 90 days are included in cash and cash equivalents on the accompanying balance sheet and are not included in the tables above. As of June 30, 2009 and December 31, 2008, the commercial paper, including accrued interest, has a fair and carrying value of $115.1 million and $42.7 million, respectively, and short-term debt securities have a fair and carrying value of $555.2 million and $458.2 million, respectively.

Summary of Contractual Maturities: Available-for-Sale Securities

The estimated fair value and amortized cost of securities, excluding strategic investments, available-for-sale by contractual maturity as of June 30, 2009 and December 31, 2008 were as follows (in millions):


	As of June 30, 2009				As of December 31, 2008
	Estimated		Amortized		Estimated		Amortized
	Fair Value		Cost		Fair Value		Cost

Due in one year or less	$	713.5	$	710.3	$	714.9	$	713.0
Due after one year through five years		1,027.1		1,013.5		733.7		722.0
Due after five years		143.3		140.1		191.8		189.2

Total	$	1,883.9	$	1,863.9	$	1,640.4	$	1,624.2

The average maturity of our marketable securities as of June 30, 2009 and December 31, 2008, was 15 months and 13 months, respectively.

Impairments

Other-than-Temporary Impairments

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-than-Temporary Impairments, or FSP FAS 115-2, which amended the other-than-temporary impairment model for debt securities. The impairment model for equity securities was not affected.

Under this FSP, an other-than-temporary impairment must be recognized through earnings if an investor has the intent to sell the debt security or if it is more likely than not that the investor will be required to sell the debt security before recovery of its amortized cost basis. However, even if an investor does not expect to sell a debt security, it must evaluate expected cash flows to be received and determine if a credit loss has occurred. In the event of a credit loss, only the amount associated with the credit loss is recognized in income. The amount of loss relating to other factors is recorded in accumulated other comprehensive income. The FSP also requires additional disclosures regarding the calculation of credit losses and the factors considered in reaching a conclusion that an investment is not other-than-temporarily impaired.

We adopted the provisions of FSP FAS 115-2 on April 1, 2009. The adoption of the FSP did not have a material impact on our financial position or results of operations.

Evaluating Investments for Other-than-Temporary Impairments

We conduct periodic reviews to identify and evaluate each investment that has an unrealized loss, in accordance with FSP FAS 115-1, The Meaning of Other-than-Temporary Impairment and its Application to Certain Investments, or FSP FAS 115-1, and FSP FAS 115-2. 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 securities that are determined to be temporary, and not related to credit loss, are recorded, net of tax, in accumulated other comprehensive income.

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 recorded within 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.

For equity securities, when assessing whether a decline in fair value below our cost basis is other-than-temporary, we consider the fair market value of the security, the duration of the security’s decline, and the financial condition of the issuer. We then consider our intent and ability to hold the equity security for a period of time sufficient to recover our carrying value. Where we have determined that we lack the intent and ability to hold an equity security to its expected recovery, the security’s decline in fair value is deemed to be other-than-temporary and is recorded within earnings as an impairment loss.

Recognition and Measurement of Other-than-Temporary Impairment

Prior to our adoption of FSP FAS 115-2 in the current quarter, we recognized impairments under the previously effective guidance contained within SFAS 115, Accounting for Certain Investments in Debt and Equity Securities.

No impairment losses were recognized through earnings related to available for sale securities during the three months ended June 30, 2009. During the six months ended June 30, 2009, we recognized $3.6 million in charges for the impairment of available for sale securities primarily related to mortgage and asset backed securities when we lacked the ability and intent to hold the securities to recovery.

For the three and six months ended June 30, 2008, we recognized $2.9 million and $5.2 million, respectively, in charges for the other-than-temporary impairment of available-for-sale securities primarily related to mortgage and asset backed securities.

During the three months ended June 30, 2009, we recognized in other comprehensive income, before tax unrealized losses of $0.7 million.

Strategic Investments

We hold investments in equity securities of certain publicly traded companies. These strategic investments are included in investments and other assets on the accompanying consolidated balance sheet.

No impairment losses were recognized related to our strategic investments during the three months ended June 30, 2009. During the six months ended June 30, 2009 we recognized charges totaling $0.4 million for the impairment of strategic investments that were determined to be other-than-temporary.

For the three and six months ended June 30, 2008, we recognized $0.9 million and $3.6 million, respectively, in charges for the impairment of strategic investments that were determined to be other-than-temporary.

Non-Marketable Securities

We hold investments in equity securities of certain privately held biotechnology companies and biotechnology oriented venture capital funds. The carrying value of these securities as of June 30, 2009 and December 31, 2008, was $92.5 million and $64.7 million, respectively. These securities are included in investments and other assets on the accompanying consolidated balance sheet.

For the three and six months ended June 30, 2009, we recognized unrealized losses of $2.8 million and $3.1 million, respectively, due to declines in the fair value of the investments in venture capital funds, as compared to $1.2 million and $4.8 million, respectively, during the comparable period in the prior year.

We recognized charges for the impairment of investments in privately held companies or funds that were determined to be other-than-temporary during the three and six month periods ended June 30, 2009 of $0.5 million and $1.9 million, respectively. Charges for the impairment of investments in privately held companies or funds that were determined to be other-than-temporary were recognized during the three and six month periods ended June 30, 2008 in the amount of $1.0 million, respectively.

Proceeds from Marketable Securities, excluding Strategic Investments

The proceeds from maturities and sales of marketable securities, excluding strategic investments, which were primarily reinvested and resulting realized gains and losses, were as follows (in millions):


	For the Three Months
	Ended June 30,				For the Six Months Ended June 30,
	2009		2008		2009		2008

Proceeds from maturities and sales	$	579.9	$	473.9	$	1,637.6	$	1,391.9
Realized gains	$	8.2	$	1.1	$	13.9	$	10.7
Realized losses	$	0.6	$	0.5	$	2.0	$	4.8

The realized losses for the three and six months ended June 30, 2009 and 2008 primarily relate to losses on the sale of corporate debt securities and non-agency mortgage-backed securities.

Securities Lending

We have previously loaned certain securities from our portfolio to other institutions. Such securities are classified as loaned securities on the accompanying consolidated balance sheet. Collateral for the loaned securities, consisting of cash or other securities is maintained at a rate of approximately 102% of the market value of each loaned security. We held collateral in the amount of $30.0 million as of December 31, 2008. The cash collateral was recorded as collateral received for loaned securities on the accompanying consolidated balance sheet. No such loans were outstanding as of June 30, 2009 and accordingly no collateral was held as of June 30, 2009.

Forward Contracts and Interest Rate Swaps

Effective January 1, 2009, we implemented Statement of Financial Accounting Standards No. 161, Disclosures About Derivative Instruments and Hedging Activities, or SFAS 161. As a result of adopting this standard we have provided additional information about our objectives for using derivative instruments, the level of derivative activity we engage in, and the effect of derivative instruments and related hedged items on our financial position and performance. The adoption of SFAS 161 did not affect our financial position or results of operations.

Forward Contracts

Due to the global nature of our operations, portions of our revenues are in currencies other than the U.S. dollar. The value of revenue measured in U.S. dollars is subject to changes in currency exchange rates. In order to mitigate these changes we use forward contracts to lock in exchange rates. We do not engage in currency speculation.

All foreign currency forward contracts in effect as of June 30, 2009 and December 31, 2008 had durations of 1 to 12 months. These contracts have been designated as cash flow hedges and accordingly, to the extent effective, any unrealized gains or losses on these foreign currency forward contracts are reported in accumulated other comprehensive income (loss). Realized gains and losses for the effective portion of such contracts are recognized in revenue with the completion of the underlying hedged transaction. To the extent ineffective, hedge transaction gains and losses are reported in other income (expense) at each reporting date.

Foreign currency forward contracts that were entered into to hedge forecasted revenue were as follows (in millions):


	Notional Amount
	As of June 30,		As of December 31,
Foreign Currency:	2009		2008

Euro	$	379.5	$	489.4
Canadian Dollar		32.8		34.1

Total	$	412.3	$	523.5

The notional settlement amount of the foreign currency forward contracts outstanding as of June 30, 2009 was approximately $412.3 million. The portion of the fair value of these contracts that was included in accumulated other comprehensive income (loss) within total equity was a $31.7 million loss as of June 30, 2009. We consider the impact of our and our counterparties’ credit risk on the fair value of the contracts as well as the ability of each party to execute its obligations under the contract. As of June 30, 2009, credit risk did not materially change the fair value of our foreign currency forward contracts.

The notional settlement amount of the foreign currency forward contracts outstanding as of December 31, 2008 was approximately $523.5 million and the fair value of these contracts resulted in a net unrealized loss of $44.1 million which was included in accumulated other comprehensive income (loss) within total equity.

In relation to our foreign currency forward contracts, we recognized net gains of $1.7 million and net losses of $0.8 million, respectively, in earnings due to hedge ineffectiveness, during the three and six months ended June 30, 2009, as compared to net losses of $0.5 million and $1.2 million, respectively, during the prior year comparative periods. We recognized $9.2 million and $12.3 million, respectively, of losses in product revenue for the settlement of certain effective cash flow hedge instruments for the three and six months ended June 30, 2009 as compared to losses recognized in the amount of $10.1 million and $17.7 million, respectively, during the prior year comparative periods. These settlements were recorded in the same period as the related forecasted revenue.

Interest Rate Swaps

In connection with the issuance of our 6.0% and 6.875% Senior Notes in March 2008, we entered into interest rate swaps for an aggregate notional amount of $550.0 million, which were subsequently settled in December 2008. Under the settlement we received $53.9 million. As the interest rate swaps were settled in 2008, no hedge ineffectiveness was recognized for the three and six months ended June 30, 2009. Net losses due to hedge ineffectiveness of $3.7 and $5.0 million were recognized in earnings for the three and six months ended June 30, 2008, respectively.

Additionally, upon termination of the swaps in December 2008, the carrying amount of the 6.875% Senior Notes increased $62.8 million. This amount will be recognized as a reduction of interest expense and amortized using the effective interest rate method over the remaining life of the 6.875% Senior Notes. During the three and six months ended June 30, 2009, approximately $1.3 million and $2.6 million, respectively, was recorded as a reduction of interest expense.

Summary of Derivatives designated as Hedging Instruments

The following table summarizes the fair value and presentation in the consolidated balance sheets for derivatives designated as hedging instruments under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, or SFAS 133, as of June 30, 2009 and December 31, 2008, respectively (in millions):

Foreign Currency Contracts

Asset Derivatives

Liability Derivatives

Balance Sheet

Location

Fair Value

Location

Fair Value

June 30, 2009

Other current assets

—

Accrued expenses and other

31.8

December 31, 2008

Other current assets

1.9

Accrued expenses and other

46.0

As noted above, the interest rate swaps were settled in December 2008.

The following table summarizes the effect of derivative instruments on the consolidated statements of income for the three and six months ended June 30, 2009 and 2008 (in millions):


	Amount				Amount
	Recognized in				Reclassified from
	Accumulated				Accumulated
	Other				Other
	Comprehensive				Comprehensive
	Income on			Income	Income			Income	Amount of
	Derivative			Statement	into Income			Statement	Gain/(Loss)
	Gain/(Loss)			Location	Gain/(Loss)			Location	Recorded
	*(Effective Portion)*			*(Effective Portion)*	*(Effective Portion)*			*(Ineffective Portion)*	*(Ineffective Portion)*

For the Three Months Ended
June 30, 2009:
Foreign currency contracts	$	(31.7	)	Revenue	$	(9.2	)	Other income (expense)	$	1.7
June 30, 2008:
Foreign currency contracts	$	(14.9	)	Revenue	$	(10.1	)	Other income (expense)	$	(0.5	)
Interest rate swap	$	—		Interest expense	$	—		Interest expense	$	(3.7	)

For the Six Months Ended
June 30, 2009:
Foreign currency contracts	$	(31.7	)	Revenue	$	(12.3	)	Other income (expense)	$	(0.8	)
June 30, 2008:
Foreign currency contracts	$	(14.9	)	Revenue	$	(17.7	)	Other income (expense)	$	(1.2	)
Interest rate swap	$	—		Interest expense	$	—		Interest expense	$	(5.0	)

Other Derivatives

During the quarter ended June 30, 2009 we entered into several foreign currency forward contracts to mitigate the foreign currency risk related to certain intercompany transactions. We have not elected hedge accounting for these transactions. As of June 30, 2009 the notional amount of these foreign currency contracts was $80.0 million. The fair value of the foreign currency contracts was insignificant. During the quarter, total gains of $1.4 million were recognized as a component of other income (expense), net related to the transactions.

Share Based Payments

6 Months Ended

Jun. 30, 2009

Share-Based Payments [Abstract]

Share-Based Payments


10.	Share-Based Payments

Our share-based compensation programs consist of share-based awards which include stock options, time-vested restricted stock units and performance-vested restricted stock units, as well as our employee stock purchase plan.

Shared-based compensation expense

For the three and six months ended June 30, 2009 and 2008, share-based compensation expense recorded in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payments, or SFAS 123(R), reduced our results of operations as follows (in millions, except per share amounts):


	For the						For the
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
	Effect on						Effect on
	Net Income						Net Income

Income before income taxes	$	(41.1	)	$	(33.1	)	$	(78.9	)	$	(67.6	)
Tax effect		12.7			10.0			24.2			20.8

Net income attributable to Biogen Idec, Inc.	$	(28.4	)	$	(23.1	)	$	(54.7	)	$	(46.8	)

Share-based compensation expense and capitalized share-based costs for the three and six months ended June 30, 2009 and 2008 were as follows (in millions):


	For the							For the
	Three Months Ended June 30, 2009							Three Months Ended June 30, 2008
	Stock		Restricted Stock					Stock		Restricted Stock
	Options		and Restricted					Options		and Restricted
	& ESPP		Stock Units		Total			& ESPP		Stock Units		Total

Research and development	$	1.2	$	12.9	$	14.1		$	1.4	$	12.8	$	14.2
Selling, general and administrative		5.2		23.2		28.4			3.8		17.0		20.8

Total	$	6.4	$	36.1	$	42.5		$	5.2	$	29.8	$	35.0

Capitalized share-based payment costs						(1.4	)						(1.9	)

Share-based compensation expense					$	41.1						$	33.1


	For the							For the
	Six Months Ended June 30, 2009							Six Months Ended June 30, 2008
	Stock		Restricted Stock					Stock		Restricted Stock
	Options		and Restricted					Options		and Restricted
	& ESPP		Stock Units		Total			& ESPP		Stock Units		Total

Research and development	$	3.4	$	27.0	$	30.4		$	3.8	$	28.0	$	31.8
Selling, general and administrative		9.8		41.8		51.6			7.2		32.3		39.5

Total	$	13.2	$	68.8	$	82.0		$	11.0	$	60.3	$	71.3

Capitalized share-based payment costs						(3.1	)						(3.7	)

Share-based compensation expense					$	78.9						$	67.6

Stock Options

The fair values of our stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The estimated fair values of the stock options, including the effect of estimated forfeitures, are then expensed over the options’ vesting periods.

During the six months ended June 30, 2009, approximately 996,000 stock options were granted with a weighted average exercise price of $50.05 per share. Approximately 825,000 of these stock options were granted during the first quarter of 2009, of which approximately 775,000 were granted in connection with our annual awards made in February; the remainder of the stock options granted during the six months ended June 30, 2009 were made in conjunction with promotions or hiring of employees and grants made to members of our Board of Directors.

During the six months ended June 30, 2008, approximately 1.3 million stock options were granted with a weighted average exercise price of $60.70 per share. Approximately 1.2 million of these stock options were granted during the first quarter of 2008, of which approximately 1.1 million were granted in connection with our annual awards made in February; the remainder of the stock options granted during the six months ended June 30, 2008 were made in conjunction with the promotion or hiring of employees and grants made to members of our Board of Directors.

Stock options awarded as part of the annual award in each of February 2009 and 2008 were granted with exercise prices of $49.65 per share and $60.56 per share, respectively, except the grants to our Chief Executive Officer, which were granted with exercise prices of $50.55 per share and $63.24 per share, respectively.

In the three and six months ended June 30, 2009, we recognized $6.0 million and $11.2 million, respectively, of share-based compensation expense related to stock options awarded as compared to $4.7 million and $9.5 million, respectively, during the prior year comparative periods.

The fair values of the stock option grants awarded for the six months ended June 30, 2009 and 2008 were estimated as of the date of grant using a Black-Scholes option valuation model that uses the following assumptions:


	For the
	Six Months
	Ended
	June 30,
	2009			2008

Expected dividend yield		0.0	%		0.0	%
Expected stock price volatility		39.3	%		34.4	%
Risk-free interest rate		1.9	%		2.5	%
Expected option life in years		4.7			5.1
Weighted average per share grant date fair value	$	18.03		$	21.07

Time-Vested Restricted Stock Units

The fair values of our time-vested restricted stock units, or RSUs, are based on the market value of our stock on the date of grant and are recognized over the applicable service period, adjusted for the effect of estimated forfeitures.

During the six months ended June 30, 2009, approximately 2.4 million RSUs were granted with a weighted average grant date fair value of $49.37 per share. Approximately 2.3 million of these RSUs were granted during the first quarter of 2009, of which approximately 2.1 million of these RSUs were granted in connection with our annual awards made in February; the remainder of the RSUs granted during the six months ended June 30, 2009 were made in conjunction with promotions or hiring of employees and grants made to members of our Board of Directors.

During the six months ended June 30, 2008, approximately 2.6 million RSUs were granted with a weighted average grant date fair value of $60.60 per share. Approximately 2.5 million of these RSUs were granted during the first quarter of 2008, of which approximately 2.4 million were granted in connection with our annual awards made in February; the remainder of the RSUs granted during the six months ended June 30, 2008 were made in conjunction with the promotion or hiring of employees and grants made to members of our Board of Directors.

RSUs awarded as part of the annual grant in each of February 2009 and 2008 had grant date fair values of $49.65 per share and $60.56 per share, respectively, except the grants to our Chief Executive Officer, which had grant date fair values of $50.55 per share and $63.24 per share, respectively.

For the three and six months ended June 30, 2009, we recognized approximately $33.9 million and $65.4 million, respectively, of share-based compensation expense related to RSU, as compared to approximately $29.9 million and $59.1 million, respectively, recognized in the prior year comparative periods.

Performance-Vested Restricted Stock Units

We apply a graded vesting expense methodology when accounting for our performance-vested restricted stock units, or PVRSUs, in accordance with SFAS 123(R). For the three and six months ended June 30, 2009, we recorded $2.2 million and $3.4 million, respectively, of share-based compensation expense related to PVRSUs as compared to $0.1 million and $0.7 million, respectively, for the prior year comparative periods.

During the six months ended June 30, 2009, approximately 318,000 PVRSUs were granted with a weighted average grant date fair value of $49.48 per share. Approximately 307,000 of these PVRSUs were granted during the first quarter of 2009, of which approximately 291,000 were in connection with our annual awards made in February; the remainder of the PVRSUs granted during the six months ended June 30, 2009 were made in conjunction with promotions or hiring of employees. These PVRSUs are eligible to vest in full or in part and are earned subject to the attainment of certain performance criteria established at the beginning of the performance period; the performance period ends December 31, 2009. Once the earned number of performance-vested awards have been determined, the earned PVRSUs will then vest in three equal increments on (1) the later of the first anniversary of the grant date or the date of results determination; (2) the second anniversary of the grant date; and (3) the third anniversary of the grant date. The vesting of these awards are also subject to the respective employees’ continued employment. The fair values of these PVRSUs are based on the market price of our stock on the date of grant. Compensation expense associated with these PVRSUs is initially based upon the number of shares expected to vest after assessing the probability that certain performance criteria will be met and the associated targeted payout level that is forecasted will be achieved, net of estimated forfeitures. Cumulative adjustments are recorded quarterly to reflect subsequent changes in the estimated outcome of performance-related conditions until the date results are determined.

During 2007, our Board of Directors awarded a total of 120,000 PVRSUs to Dr. Cecil Pickett, our President, Research and Development. Vesting of these PVRSUs is subject to certain performance criteria established at the beginning of each of four performance periods, beginning January 1 on each of 2007, 2008, 2009 and 2010. Up to 30,000 PVRSUs are eligible to vest each performance period and convert into shares of our common stock subject to attainment of certain performance criteria and Dr. Pickett’s continued employment through the end of the respective performance period; the performance periods end on December 31, 2007, December 31, 2008, December 31, 2009 and September 30, 2010. The fair values of the PVRSUs granted to Dr. Pickett are based on the market price of our stock on the date of grant, adjusted quarterly for subsequent changes in the market price of our stock. As of June 30, 2008, a total of 27,000 shares were issued based upon the attainment of performance criteria set for 2007. As of June 30, 2009, an additional 30,000 shares were issued based on the attainment of performance criteria set for 2008.

Employee Stock Purchase Plan

The purchase price of common stock under the employee stock purchase plan, or ESPP, is equal to 85% of the lower of (i) the market value per share of the common stock on the participant’s entry date into an offering period or (ii) the market value per share of the common stock on the Purchase Date. However, for each participant whose entry date is other than the start date of the offering period, the amount shall in no event be less than the market value per share of the common stock as of the beginning of the related offering period. The fair value of the discounted purchases made under the employee stock purchase plan are calculated using the Black-Scholes model. The fair value of the look-back provision plus the 15% discount is recognized as compensation expense over the purchase period. We apply a graded vesting approach since our ESPP provides for multiple purchase periods and is, in substance, a series of linked awards.

During the three and six months ended June 30, 2009, a total of approximately 0.1 million and 0.3 million shares, respectively, were issued under the ESPP as compared to a total of approximately 0.1 million and 0.3 million shares, respectively, issued during the prior year comparative periods.

For the three and six months ended June 30, 2009, we recognized approximately $0.4 million and $2.0 million, respectively, of share-based compensation expense in relation to the ESPP as compared to approximately $0.5 million and $1.6 million, respectively, recognized in the prior year comparative periods.

Collaborations

6 Months Ended

Jun. 30, 2009

Collaborations [Abstract]

Collaborations


13.	Collaborations

In connection with our business strategy, we have entered into various collaboration agreements which provide us with rights to develop, produce and market products using certain know-how, technology and patent rights maintained by our collaborative partners. Terms of the various collaboration agreements may require us to make milestone payments upon the achievement of certain product research and development objectives and pay royalties on future sales, if any, of commercial products resulting from the collaboration.

EITF No. 07-01, Accounting for Collaborative Arrangements, or EITF 07-01, prescribes that certain transactions between collaborators be recorded in the income statement on either a gross or net basis, depending on the characteristics of the collaboration relationship, and provides for enhanced disclosure of collaborative relationships. In accordance with EITF 07-01, we evaluate our collaborative agreements for proper income statement classification based on the nature of the underlying activity. If payments to and from our collaborative partners are not within the scope of other authoritative accounting literature, the income statement classification for the payments is based on a reasonable, rational analogy to authoritative accounting literature that is applied in a consistent manner. Amounts due from our collaborative partners related to development activities are generally reflected as a reduction of research and development expense because the performance of contract development services is not central to our operations. For collaborations with commercialized products, if we are the principal, as defined in EITF No. 99-19, Reporting Revenue as a Principal versus Net as an Agent, or EITF 99-19, we record revenue and the corresponding operating costs in their respective line items within our statement of income. If we are not the principal, we record operating costs as a reduction of revenue. EITF 99-19 describes the principal as the party who is responsible for delivering the product or service to the customer, has latitude to determine price, and has the risks and rewards of providing product or service to the customer, including inventory and credit risk. The adoption of EITF 07-01 did not impact our financial position or results of operations; however it resulted in enhanced disclosures for our collaboration activities.

Genentech

We collaborate with Genentech, Inc., or Genentech, wholly-owned subsidiary of Roche Holdings, Inc., on the development and commercialization of RITUXAN. We also have rights to collaborate with Genentech on the development and commercialization of (1) anti-CD20 products that Genentech acquires or develops, which we refer to as New Anti-CD20 Products, and (2) anti-CD20 products that Genentech licenses from a third party, which we refer to as Third Party Anti-CD20 Products. Currently, there is only one New Anti-CD20 Product, ocrelizumab, and only one Third Party Anti-CD20 Product, GA101. Our collaboration rights for New Anti-CD20 Products are limited to the United States and our collaboration rights for Third Party Anti-CD20 Products are dependent upon Genentech’s underlying license rights. A joint development committee, or JDC, composed of three members from each company must unanimously approve a development plan for each specific indication of certain pharmaceutical products, and Genentech has responsibility for implementation of JDC approved development plans in accordance with the provisions of our collaboration agreement. In the event that we undergo a change in control, as defined in the collaboration agreement, Genentech has the right to present an offer to buy the rights to RITUXAN, and we must either accept Genentech’s offer or purchase Genentech’s rights to RITUXAN on the same terms as its offer. If Genentech presents such an offer, then they will be deemed concurrently to have exercised a right, in exchange for a royalty on net sales in the United States of any anti-CD20 product acquired or developed by Genentech or any anti-CD20 product that Genentech licenses from a third party that is developed under the agreement, to purchase our interest in each such product. Our collaboration with Genentech was created through a contractual arrangement and not through a joint venture or other legal entity.

While Genentech is responsible for the worldwide manufacturing of RITUXAN, development and commercialization rights and responsibilities under this collaboration are divided as follows:

United States

We share with Genentech co-exclusive rights to develop, commercialize and market RITUXAN and New Anti-CD20 Products in the United States. Although we contribute to the marketing and continued development of RITUXAN, we have a limited sales force dedicated to RITUXAN and limited development activity. Genentech is primarily responsible for the commercialization of RITUXAN in the United States. Its responsibilities include selling and marketing, customer service, order entry, distribution, shipping and billing, and other administrative support. Genentech also incurs the majority of continuing development costs for RITUXAN.

Canada

We and Genentech have assigned our rights to develop, commercialize and market RITUXAN, in Canada to F. Hoffman-La Roche Ltd., or Roche.

Outside the United States and Canada

We have granted Genentech exclusive rights to develop, commercialize and market RITUXAN outside the United States and Canada. Under the terms of separate sublicense agreements between Genentech and Roche, development and commercialization of RITUXAN outside the United States and Canada is the responsibility of Roche, except in Japan where RITUXAN is co-marketed by Zenyaku Kogyo Co. Ltd., or Zenyaku, and Chugai Pharmaceutical Co. Ltd, or Chugai, an affiliate of Roche. We do not have any direct contractual arrangements with Roche, Zenyaku or Chugai for such development or commercialization.

Revenues from unconsolidated joint business consists of (1) our share of pretax co-promotion profits in the United States (2) reimbursement of selling and development expenses in the United States; and (3) revenue on sales of RITUXAN outside the United States, which consist of our share of pretax co-promotion profits in Canada and royalty revenue on sales of RITUXAN outside the United States and Canada by Roche, Zenyaku and Chugai. Pre-tax co-promotion profits are calculated and paid to us by Genentech in the United States and by Roche in Canada. Pre-tax co-promotion profits consist of Unites States and Canadian sales of RITUXAN to third-party customers net of discounts and allowances less the cost to manufacture RITUXAN, third-party royalty expenses, distribution, selling, and marketing expenses, and joint development expenses incurred by Genentech, Roche and us. We record our royalty and co-promotion profits revenue on sales of RITUXAN outside the United States on a cash basis.

Revenues from unconsolidated joint business consist of the following (in millions):


	For the Three				For the Six
	Months Ended				Months Ended
	June 30,				June 30,
	2009		2008		2009		2008

Co-promotion profits in the United States	$	198.5	$	177.7	$	378.0	$	335.7
Reimbursement of selling and development expenses in the United States		16.7		15.9		31.7		28.6
Revenue on sales of RITUXAN outside the United States		60.4		85.2		144.7		161.7

Total unconsolidated joint business	$	275.6	$	278.8	$	554.4	$	526.0

Under the collaboration agreement, our current pretax co-promotion profit-sharing formula, which resets annually, is stated within the table below. In 2009 and 2008, the 40% threshold was met during the first quarter.


	Biogen Idec’s
	Share of
	Co-promotion
Co-promotion Operating Profits	Profits

First $50 million		30	%
Greater than $50 million		40	%

Our agreement with Genentech provides that the successful development and commercialization of the first New Anti-CD20 Product will decrease our percentage of co-promotion profits of the collaboration and that we will participate in Third Party Anti-CD20 Products on similar financial terms as for ocrelizumab. Specifically, for each calendar year or portion thereof following the approval date of the first New Anti-CD20 Product, the pretax co-promotion profit-sharing formula for RITUXAN and New Anti-CD20 Products sold by us and Genentech will change as follows.


		Biogen Idec’s
		Share of
	First New Anti-CD20 Product U.S.	Co-promotion
Co-promotion Operating Profits	Gross Product Sales	Profits

First $50 million(1)	Not Applicable		30	%
Greater than $50 million	Until such sales exceed $150 million in any calendar year(2)		38	%
	Or
	After such sales exceed $150 million in any calendar year until such sales exceed $350 million in any calendar year(3)		35	%
	Or
	After such sales exceed $350 million in any calendar year(4)		30	%


(1)		not applicable in the calendar year the first New Anti-CD20 Product is approved if $50 million in co-promotion operating profits has already been achieved in such calendar year through sales of RITUXAN.

(2)		if we are recording our share of RITUXAN co-promotion profits at 40%, upon the approval date of the first New Anti-CD20 Product, our share of co-promotion profits for RITUXAN and the New Anti-CD20 Product will be immediately reduced to 38% following the approval date of the first New Anti-CD20 Product until the $150 million in first New Anti-CD20 Product sales level is achieved.

(3)		if $150 million in first New Anti-CD20 Product sales is achieved in the same calendar year the first New Anti-CD20 Product receives approval, then the 35% co-promotion profit-sharing rate will not be effective until January 1 of the following calendar year. Once the $150 million in first New Anti-CD20 Product sales level is achieved then our share of co-promotion profits for the balance of the year and all subsequent years (after the first $50 million in co-promotion operating profits in such years) will be 35% until the $350 million in first New Anti-CD20 Product sales level is achieved.

(4)		if $350 million in first New Anti-CD20 Product sales is achieved in the same calendar year that $150 million in new product sales is achieved, then the 30% co-promotion profit-sharing rate will not be effective until January 1 of the following calendar year (or January 1 of the second following calendar year if the first New Anti-CD20 Product receives approval and, in the same calendar year, the $150 million and $350 million in first New Anti-CD20 Product sales levels are achieved). Once the $350 million in first New Anti-CD20 Product sales level is achieved then our share of co-promotion profits for the balance of the year and all subsequent years will be 30%.

Currently, we record our share of the expenses incurred by the collaboration for the development of New Anti-CD20 Products in research and development expense in our consolidated statement of income. After a New Anti-CD20 Product is approved, we will record our share of the development expenses related to that product as a reduction of our share of pretax co-promotion profits in revenues from unconsolidated joint business. We incurred $17.7 million and $32.7 million in development expense related to New Anti-CD20 products for the three and six months ended June 30, 2009, respectively, as compared to $10.6 million and $22.5 million, respectively, during the prior year comparative periods. Reimbursement to Genentech for our share of these costs occurs through the net amount of co-promotion profits in the United States remitted to us.

Elan

We have a collaboration agreement with Elan to collaborate in the development, manufacture and commercialization of TYSABRI. Under the terms of the agreement, we manufacture TYSABRI and collaborate with Elan on the product’s marketing, commercial distribution and on-going development activities. The collaboration with Elan is designed to effect an equal sharing of profits and losses generated by the activities of the collaboration between Elan and us. Under the agreement, however, once sales of TYSABRI exceeded specific thresholds, Elan was required to make milestone payments to us in order to continue sharing equally in the collaboration’s results. As of June 30, 2009, Elan has paid to us milestone payments of $75.0 million in the third quarter of 2008 and $50.0 million in the first quarter of 2009. We have recorded these amounts as deferred revenue upon receipt and are recognizing the entire $125.0 million as product revenue in our consolidated statement of income over the term of the collaboration agreement based on a units of revenue method whereby the revenue recognized is based on the ratio of units shipped in the current period over the total units expected to be shipped over the remaining term of the collaboration. No additional milestone payments are required under the agreement to maintain the current profit sharing split. Our collaboration agreement with Elan provides Elan or us with the option to buy the rights to TYSABRI in the event that the other company was to undergo a change of control (as defined in the collaboration agreement).

In the United States, Elan and we co-market TYSABRI, with us primarily responsible for marketing TYSABRI for MS, and Elan primarily responsible for marketing TYSABRI for Crohn’s disease. We sell TYSABRI to Elan who sells the product to third party distributors. Our sales price to Elan in the United States is set prior to the beginning of each quarterly period to effect an approximate equal sharing of the gross margin between Elan and us. We recognize revenue for sales in the Unites States of TYSABRI upon Elan’s shipment of the product to the third party distributors. We incur manufacturing and distribution costs, research and development expenses, commercial expenses, and general and administrative expenses. We record these expenses to their respective line items within our statement of income when they are incurred. Research and development and sales and marketing expenses are shared with Elan and the reimbursement of these expenses is recorded as reductions of the respective expense categories. During the three and six months ended June 30, 2009, we recorded $3.7 million and $11.2 million, respectively, as reductions of research and development expense for reimbursements from Elan as compared to $8.0 million and $13.3 million, respectively, of research and development expense recorded for reimbursement from Elan during the prior year comparative periods. In addition, for the three and six months ended June 30, 2009, we recorded $8.5 million and $17.5 million, respectively, as reductions of selling, general and administrative expense for reimbursements from Elan as compared to $7.0 million and $16.0 million, respectively, in the prior year comparative periods.

Outside the United States, or rest of world, we are responsible for distributing TYSABRI to customers and are primarily responsible for all operating activities. Generally, we recognize revenue for sales of TYSABRI in the rest of world at the time of product delivery to our customers. Payments are made to Elan for their share of the rest of world net operating profits to effect an equal sharing of collaboration operating profit. These payments include the reimbursement of our portion of third-party royalties that Elan pays on behalf of the collaboration relating to rest of world sales. These amounts are reflected in the collaboration profit sharing line in our consolidated statement of income. For the three and six months ended June 30, 2009, $49.1 million and $91.9 million, respectively, was reflected in the collaboration profit sharing line for our collaboration with Elan, as compared to $33.4 million and $54.8 million, respectively, for the prior year comparative periods. As rest of world sales of TYSABRI increase, our collaboration profit sharing expense is expected to increase.

Acorda

On June 30, 2009, we entered into a collaboration and license agreement with Acorda to develop and commercialize products containing Fampridine-SR in markets outside the United States. Fampridine-SR is an oral sustained-release compound, which is being developed to improve walking ability in people with MS. The transaction represents a sublicensing of an existing license agreement between Acorda and Elan. The parties have also entered into a related supply agreement.

Under the terms of the agreement, we will commercialize Fampridine-SR and any aminopyridine products developed in our territory and will also have responsibility for regulatory activities and future clinical development of Fampridine-SR in those markets. As of June 30, 2009, we have recorded within accounts payable a liability for the $110.0 million upfront payment due to Acorda. We may also incur up to an additional $400.0 million of milestone payments based upon the successful achievement of regulatory and commercial sales milestones. We will also make tiered royalty payments to Acorda on sales outside of the United States. The consideration that we pay for products will reflect all amounts due from Acorda to Elan for sales in markets outside the United States, including royalties owed. The parties can also carry out future joint development activities under a cost-sharing arrangement.

Elan will continue to manufacture commercial supply of Fampridine-SR, based upon its existing supply agreement with Acorda. Under the existing agreements with Elan, Acorda will pay Elan seven percent of the upfront and milestone payments that Acorda receives from us.

The $110.0 million upfront payment was recorded as research and development expense as the asset has not received regulatory approval. For the three and six months ended June 30, 2009, we did not record any additional research and development expense related to the Acorda transaction in our consolidated statement of income.

Neurimmune

We have a collaboration agreement with Neurimmune SubOne AG, or Neurimmune, a subsidiary of Neurimmune Therapeutics AG, for the development and commercialization of antibodies for the treatment of Alzheimer’s disease. The royalty term under the agreement for sales in each country will be no less than 12 years from the first commercial sale of product using such compound in such country. Neurimmune will conduct research to identify potential therapeutic antibodies and we will be responsible for the development, manufacturing and commercialization of all products. Under the terms of the agreement, we may pay up to an additional $360.0 million in milestone payments, as well as a royalty on sales of any resulting commercial products.

We have determined that we are the primary beneficiary of Neurimmune under FIN 46(R). As such, we consolidate the results of Neurimmune. The assets and liabilities of Neurimmune are not significant as it is a research and development organization.

We incurred research and development expense of $2.5 million and $7.5 million for the three and six months ended June 30, 2009, respectively, related to milestone payments. We incurred $8.0 million of research and development expense related to milestone payments during the six months ended June 30, 2008. No milestone payments were made during the three months ended June 30, 2008. We reimburse Neurimmune for all research and development costs incurred in support of the collaboration. For the three and six months ended June 30, 2009, the collaboration incurred $1.9 million and $3.7 million of expenses, respectively, which were reflected in research and development expense in our statement of income as compared to $2.0 million and $3.2 million of research and development expense recognized for the three and six months ended June 30, 2008, respectively.

Since inception of the collaboration excluding an upfront payment of $2.0 million and milestone payments of $18.0 million, we have spent an additional $10.0 million to develop the lead compound. We may incur up to an additional $280.0 million to develop the lead compound.

Cardiokine

We have a collaboration agreement with Cardiokine Biopharma LLC, or Cardiokine, a subsidiary of Cardiokine Inc., for the joint development of Lixivaptan, an oral compound for the potential treatment of hyponatremia in patients with congestive heart failure. The royalty term under the agreement for sales in each country will be no less than 10 years from the first commercial sale of a Lixivaptan product in such country. If successful, we will be responsible for certain development activities, manufacturing and global commercialization of Lixivaptan, and Cardiokine has an option for limited co-promotion in the United States. Under the terms of the agreement, excluding the $20.0 million milestone payment incurred in July 2009, referred to below, we may pay up to an additional $150.0 million in development milestone payments as well as royalties on commercial sales.

We have determined that we are the primary beneficiary of Cardiokine under FIN 46(R). As such, we consolidate the results of Cardiokine. The assets and liabilities of Cardiokine are not significant as it is a research and development organization.

We reimburse Cardiokine for 90% of research and development costs in support of the collaboration. For the three and six months ended June 30, 2009, the collaboration incurred $17.5 million and $31.2 million, respectively, which was reflected in research and development expense in our consolidated statement of income as compared to $13.5 million and $22.2 million, respectively, recognized during the prior year comparative periods.

For the three and six months ended June 30, 2009, we have allocated $1.7 million and $3.1 million, respectively, to net income attributable to noncontrolling interest, net of tax, for the amount of research and development expense retained by the noncontrolling interest holders. For the comparable periods in 2008, we have allocated $1.3 million and $2.2 million, respectively, to net income attributable to noncontrolling interest, net of tax, for the amount of research and development expense retained by the noncontrolling interest holders.

In July 2009, Cardiokine achieved a significant development milestone and triggered a $20.0 million payment from us. As the triggering event for the payment occurred after June 30, 2009, the obligation is not reflected within our consolidated balance sheet as of June 30, 2009. Such obligations are recorded when the milestone has been achieved due to the uncertainty surrounding triggering events.

Since inception of the agreement excluding an upfront payment of $50.0 million, we have incurred $91.2 million to develop Lixivaptan. We may incur up to an additional $465.0 million to develop Lixivaptan for all indications under development.

Biovitrum

We have a collaboration agreement with Biovitrum AB, or Biovitrum, to jointly develop and commercialize Factor VIII and Factor IX for the treatment of hemophilia. Under the agreement, development and commercialization costs and profits are shared equally. We have commercial rights to North America and Biovitrum has commercial rights to Europe. All other territories are to be managed by a third party with us and Biovitrum sharing equally in the operating results. Under the agreement, Biovitrum may pay us up to an additional $19.5 million in milestone payments.

For the three and six months ended June 30, 2009, the Factor VIII and Factor IX programs collectively incurred expenses totaling $13.5 million and $26.4 million, respectively, as compared to $8.8 million and $18.5 million, respectively, incurred during the prior year comparative periods. Amounts due from Biovitrum have been recorded as a reduction of research and development expense. As such, we reflected $6.8 million and $13.2 million, respectively, in research and development expense in our consolidated statement of income for the three and six months ended June 30, 2009 and $4.4 million and $9.3 million, respectively, for the three and six months ended June 30, 2008.

Since inception of the agreement, we have incurred $41.4 million to develop Factor VIII and Factor IX for the treatment of hemophilia. We may incur up to an additional $55.0 million to develop Factor VIII and Factor IX for this indication.

Mondo

We have a collaboration agreement with MondoGen, or Mondo, a subsidiary of MondoBiotech AG, to develop and commercialize Aviptadil, a clinical compound for the treatment of pulmonary arterial hypertension, or PAH. Under the agreement, we are responsible for manufacturing, development, and commercialization of the compound and could incur up to $30.0 million in milestones payments for successful development and commercialization of the program in the United States and Europe, as well as royalty payments on commercial sales. In February 2009, the parties revised the agreement to clarify that our development funding obligation should not exceed $13.3 million, inclusive of all amounts incurred during 2009 and the three months ended December 31, 2008, if we decide not to pursue the collaboration beyond 2009.

We have determined that we are the primary beneficiary of Mondo under FIN 46(R). As such, we consolidate the results of Mondo. The assets and liabilities of Mondo are not significant as it is a research and development organization.

For the three and six months ended June 30, 2009, the collaboration incurred $3.8 million and $6.9 million, respectively, which was reflected in research and development expense in our consolidated statement of income as compared to $3.5 million and $9.0 million, respectively, in the prior year comparative periods.

Since inception of the agreement excluding an upfront payment of $7.5 million, we have incurred $36.8 million to develop Aviptadil in PAH.

UCB

Since inception of our collaboration agreement with UCB, S.A., or UCB, we have incurred a total of $94.4 million in research and development expenses for the development and commercialization of an oral alpha4 integrin, or VLA-4, antagonist for the treatment of relapsing remitting MS. The total research and development expenses incurred are inclusive of an upfront payment made in the amount of $30.0 million. In June 2009, UCB and we announced the discontinuation of the Phase II clinical trial for this collaboration’s only product candidate due to the absence of clinically relevant efficacy.

For the three and six months ended June 30, 2009, the collaboration incurred $13.5 million and $22.3 million, respectively. Our share of the collaboration expenses were $8.5 million and $14.3 million, respectively, which is reflected in research and development expense in our consolidated statement of income.

For the three and six months ended June 30, 2008, the collaboration incurred $9.5 million and $16.5 million, respectively. Our share of the collaboration expenses were $5.7 million and $10.3 million, respectively, which is reflected in research and development expense in our consolidated statement of income.

Facet Biotech

We have a collaboration agreement with Facet Biotech, or Facet, aimed at advancing the development and commercialization of daclizumab in MS and volociximab in solid tumors. Daclizumab is a humanized monoclonal antibody that binds to the IL-2 receptor on activated T cells. Volociximab is an anti-angiogenic chimeric antibody directed against alpha5 beta1 integrin, or VLA5. Under the agreement, development, and commercialization costs and profits are shared equally. We may incur up to an additional $650.0 million of payments upon achievement of development and commercial milestones.

For the three and six months ended June 30, 2009, the collaboration incurred $9.5 million and $17.7 million, respectively. As a result, we reflected $4.8 million and $8.9 million, respectively, in research and development expense in our consolidated statement of income.

For the three and six months ended June 30, 2008, the collaboration incurred $20.3 million and $39.6 million, respectively. As a result, we reflected $10.1 million and $19.8 million, respectively, in research and development expense in our consolidated statement of income.

Since inception of the collaboration excluding an upfront payment of $40.0 million and milestone payments of $10.0 million, we have incurred $49.0 million and $60.6 million to develop daclizumab and volociximab, respectively. We may incur up to an additional $250.0 million and $170.0 million, respectively, to develop daclizumab and volociximab in these indications.

Vernalis

We have a collaboration agreement with Vernalis plc, or Vernalis, aimed at advancing the development and commercialization of an adenosine A2a receptor antagonist for treatment of Parkinson’s disease. Under the agreement, we received exclusive worldwide rights to develop and commercialize the compound. We are responsible for funding all development costs and may incur up to an additional $85.0 million of milestone payments upon achievement of certain objectives, as well as royalties on commercial sales.

For the three and six months ended June 30, 2009, we incurred $2.8 million and $7.1 million, respectively, which is reflected in research and development expense in our consolidated statement of income, as compared to $5.3 million and $8.8 million, respectively, in the prior year comparative periods.

Since inception of the collaboration excluding an upfront payment of $10.0 million and a milestone payment of $3.0 million, we have incurred $61.8 million to develop a compound for treatment of Parkinson’s disease. We may incur up to an additional $160.0 million to develop the compound in this indication.

6 Months Ended

Jun. 30, 2009

Litigation [Abstract]

Litigation


14.	Litigation

Along with several other major pharmaceutical and biotechnology companies, Biogen, Inc. (now Biogen Idec MA, Inc., one of our wholly-owned subsidiaries) or, in some cases, Biogen Idec Inc., was named as a defendant in lawsuits filed by the City of New York and numerous Counties of the State of New York. All of the cases — except for cases filed by the County of Erie, County of Oswego and County of Schenectady, or the Three County Actions — are the subject of a Consolidated Complaint, first filed on June 15, 2005 in the U.S. District Court for the District of Massachusetts in Multi-District Litigation No. 1456, or the MDL proceedings. The complaints allege that the defendants (i) fraudulently reported the Average Wholesale Price for certain drugs for which Medicaid provides reimbursement, or the Covered Drugs; (ii) marketed and promoted the sale of Covered Drugs to providers based on the providers’ ability to collect inflated payments from the government and Medicaid beneficiaries that exceeded payments possible for competing drugs; (iii) provided financing incentives to providers to over-prescribe Covered Drugs or to prescribe Covered Drugs in place of competing drugs; and (iv) overcharged Medicaid for illegally inflated Covered Drugs reimbursements. Among other things, the complaints allege violations of New York state law and advance common law claims for unfair trade practices, fraud, and unjust enrichment. In addition, the amended Consolidated Complaint alleges that the defendants failed to accurately report the “best price” on the Covered Drugs to the Secretary of Health and Human Services pursuant to rebate agreements, and excluded from their reporting certain discounts and other rebates that would have reduced the “best price.” With respect to the MDL proceedings, some of the plaintiffs’ claims were dismissed, and the parties, including Biogen Idec, began a mediation of the outstanding claims on July 1, 2008. We have not formed an opinion that an unfavorable outcome is either “probable” or “remote” in any of these cases, and do not express an opinion at this time as to their likely outcome or as to the magnitude or range of any potential loss. We believe that we have good and valid defenses to each of these complaints and are vigorously defending against them.

On June 17, 2006, Biogen Idec filed a Demand for Arbitration against Genentech, Inc. with the American Arbitration Association, or the AAA, which Demand was amended on December 5, 2006 and on January 29, 2008. In the Demand, Biogen Idec alleged that Genentech breached the parties’ Amended and Restated Collaboration Agreement dated June 19, 2003, or the Collaboration Agreement, by failing to honor Biogen Idec’s right to participate in strategic decisions affecting the parties’ joint development of certain pharmaceutical products, including humanized anti-CD20 antibodies. Genentech filed an Answering Statement in response to Biogen Idec’s Demand in which Genentech denied that it had breached the Collaboration Agreement and alleged that Biogen Idec had breached the Collaboration Agreement. In its Answering Statement, filed in 2006, Genentech also asserted for the first time that the November 2003 transaction in which Idec Pharmaceuticals acquired Biogen and became Biogen Idec was a change of control under the Collaboration Agreement. On June 15, 2009, the arbitration panel issued its final decision (the “Award”). The panel ruled that a Joint Development Committee (JDC) composed of three members from each company must unanimously approve a separate development plan for each specific indication (disease). The panel also ruled that, absent unanimous approval of the JDC, which may not be unreasonably withheld, Genentech may not proceed with further development of 2H7v16 in neuromyelitis optica, 2H7v16 in relapsing-remitting multiple sclerosis, or 2H7v114 for oncology. The panel ruled that Genentech may continue clinical trials of 2H7 for lupus and Phase III clinical trials of 2H7 for rheumatoid arthritis. The panel also confirmed Genentech’s undisputed responsibility for implementation of JDC approved development plans in accordance with the provisions of the Collaboration Agreement. The panel rejected Genentech’s assertion of the “Change of Control” provision under the Collaboration Agreement. The panel did not award damages to either party.

On September 12, 2006, the Massachusetts Department of Revenue, or the DOR, issued a notice of assessment against Biogen Idec MA, Inc. for $38.9 million of corporate excise tax with respect to the 2002 tax year, which includes associated interest and penalties. On December 6, 2006, we filed an abatement application with the DOR, seeking abatements for 2001, 2002 and 2003 tax years. The abatement application was denied on July 24, 2007. On July 25, 2007, we filed a petition with the Massachusetts Appellate Tax Board, seeking, among other items, abatements of corporate excise tax for 2001, 2002 and 2003 tax years and adjustments in certain credits and credit carryforwards for 2001, 2002 and 2003 tax years. Issues before the Board include the computation of Biogen Idec MA’s sales factor for 2001, 2002 and 2003 tax years, computation of Biogen Idec MA’s research credits for those same years, and the availability of deductions for certain expenses and partnership flow-through items. We anticipate that the trial will take place in 2010. We intend to contest this matter vigorously.

On October 4, 2004, Genentech, Inc. received a subpoena from the U.S. Department of Justice requesting documents related to the promotion of RITUXAN. We market RITUXAN in the United States in collaboration with Genentech. Genentech has disclosed that it is cooperating with the associated investigation, and that it has been advised the investigation is civil in nature. We are cooperating with the U.S. Department of Justice in its investigation of Genentech. The potential outcome of this matter and its impact on us cannot be determined at this time.

In January 2008, the European Commission, or the EC, began an industry-wide antitrust inquiry into competitive conditions within the pharmaceutical sector. As part of the inquiry, the EC requested information from approximately 100 companies, including Biogen Idec. The EC published its final report on the inquiry in July 2009 in which it found delay in the market entry of generic drugs and a decline in drug innovation. The report did not contain any findings regarding, or reference to, Biogen Idec. The potential impact on us of the EC’s final report cannot be determined at this time.

On October 27, 2008, Sanofi-Aventis Deutschland GmbH, or Sanofi, filed suit against Genentech and Biogen Idec in federal court in Texas (E.D. Tex.), which we refer to as the Texas Action claiming that Rituxan and certain other Genentech products infringe U.S. Patents 5,849,522, or the ’522 patent, and 6,218,140, or the ’140 patent. Sanofi seeks preliminary and permanent injunctions, compensatory and exemplary damages, and other relief. On October 27, 2008, Genentech and Biogen Idec filed a complaint against Sanofi, Sanofi-Aventis U.S. LLC, and Sanofi-Aventis U.S. Inc. in federal court in California (N.D. Cal.), which we refer to as the California Action seeking a declaratory judgment that Rituxan and other Genentech products do not infringe the ’522 patent or the ’140 patent, and a declaratory judgment that those patents are invalid. The parties are currently litigating whether the Texas Action should be transferred to the court in the California Action. In addition, on October 24, 2008, Hoechst GmbH filed with the ICC International Court of Arbitration (Paris) a request for arbitration against Genentech, relating to a terminated agreement between Hoechst’s predecessor and Genentech that pertained to the above-referenced patents and related patents outside the U.S. Hoechst is seeking payment of royalties on sales of Genentech products, damages for breach of contract, and other relief. We have not formed an opinion that an unfavorable outcome is either “probable” or “remote,” and do not express an opinion at this time as to the likely outcome of the matters or as to the magnitude or range of any potential loss. We believe that we have good and valid defenses and intend vigorously to defend against the allegations against us.

In addition, we are involved in product liability claims and other legal proceedings generally incidental to our normal business activities. While the outcome of any of these proceedings cannot be accurately predicted, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our business or financial conditions.

New Accounting Pronouncements

6 Months Ended

Jun. 30, 2009

New Accounting Pronouncements [Abstract]

New Accounting Pronouncements


16.	New Accounting Pronouncements

Effective January 1, 2009, we implemented Statement of Financial Accounting Standards No. 141(R), Business Combination, or SFAS 141(R). This standard requires an acquiring company to measure all assets acquired and liabilities assumed, including contingent considerations and all contractual contingencies, at fair value as of the acquisition date. In addition, an acquiring company is required to capitalize IPR&D and either amortize it over the life of the product, or write it off if the project is abandoned or impaired. The adoption of this standard did not have a material impact on our financial position or results of operations as SFAS 141(R) is applicable to acquisitions completed after January 1, 2009 and we did not complete any business combination transactions during the first six months of 2009.

SFAS 141(R) also amended Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, or SFAS 109, and FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, or FIN 48. Previously, SFAS 109 and FIN 48, generally required post-acquisition adjustments related to business combination deferred tax asset valuation allowances and liabilities for uncertain tax positions to be recorded as an increase or decrease to goodwill. SFAS 141(R) does not permit this accounting and, generally, requires any such changes to be recorded in current period income tax expense. Thus, all changes to valuation allowances and liabilities for uncertain tax positions established in acquisition accounting, whether the business combination was accounted for under SFAS 141 or SFAS 141(R), will be recognized in current period income tax expense.

On April 1, 2009, the FASB Board issued FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, or FSP FAS 141(R)-1. FSP FAS 141(R)-1 amends and clarifies SFAS 141(R), to address application issues regarding the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. Due to the fact that SFAS 141(R) is applicable to acquisitions completed after January 1, 2009 and we did not have any business combinations in the first six months of 2009, the adoption of FSP FAS 141(R)-1 did not impact our financial position or results of operations.

In April 2009, the Securities and Exchange Commission, or SEC, issued Staff Accounting Bulletin No. 111 which aligns SEC regulations to the newly issued accounting standards (FSP FAS 115-1 and FAS 124-2) on accounting for other-than-temporary impairments for marketable debt securities. Specifically, it amends Topic 5.M to exclude debt securities from its scope. This bulletin did not impact our financial position or results of operations; however, we conduct periodic reviews to evaluate our investments for the other-than-temporary impairments in accordance with FSP FAS 115-1.

In June 2009, the SEC issued Staff Accounting Bulletin No. 112, which updates the SEC’s rules and regulations to be consistent with the accounting principles and standards established in SFAS 141(R) and SFAS 160. This bulletin did not impact our financial position or results of operations; however, the adoption of SFAS 160 resulted in the reclassification of certain prior period amounts to conform to the current financial statement presentation.

Recently Issued Accounting Standards

On June 3, 2009, the FASB approved the FASB Accounting Standards Codification, or the Codification, as the single source of authoritative nongovernmental Generally Accepted Accounting Principles, or GAAP, in the United States. The Codification will be effective for interim and annual periods ending after September 15, 2009, which means July 1, 2009 for Biogen Idec. Upon the effective date, the Codification will be the single source of authoritative accounting principles to be applied by all nongovernmental U.S. entities. All other accounting literature not included in the Codification will be nonauthoritative. We do not expect the adoption of the Codification to have an impact on our financial position or results of operations.

In June 2009, the FASB issued the following new accounting standards:


	•	SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140, or SFAS 166;

	•	SFAS No. 167, Amendments to FASB Interpretation No. 46(R), or SFAS 167; and

	•	SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162, or SFAS 168

SFAS 166 prescribes the information that a reporting entity must provide in its financial reports about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement in transferred financial assets. Specifically, among other aspects, SFAS 166 amends Statement of Financial Standard No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, or SFAS 140, by removing the concept of a qualifying special-purpose entity from SFAS 140 and removes the exception from applying FIN 46(R) to variable interest entities that are qualifying special-purpose entities. It also modifies the financial-components approach used in SFAS 140. SFAS 166 is effective for transfer of financial assets occurring on or after January 1, 2010. We have not determined the effect that the adoption of SFAS 166 will have on our financial position or results of operations but the effect will generally be limited to future transactions. Historically, we have not had any material transfer of financial assets.

SFAS 167 amends FASB Interpretation No. 46, Consolidation of Variable Interest Entities (revised December 2003) — an interpretation of ARB No. 51, or FIN 46(R), to require an enterprise to determine whether it’s variable interest or interests give it a controlling financial interest in a variable interest entity. The primary beneficiary of a variable interest entity is the enterprise that has both (1) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. SFAS 167 also amends FIN 46(R) to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. SFAS 167 is effective for all variable interest entities and relationships with variable interest entities existing as of January 1, 2010. We have not determined the effect that the adoption of SFAS 167 will have on our financial position or results of operations.

SFAS 168 replaces SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles, to establish the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in preparation of financial statements in conformity with generally accepted accounting principles in the United States. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. We do not expect the adoption of this standard to have an impact on our financial position or results of operations.

Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2009	Dec. 31, 2008
Statement [Line Items]
Preferred stock, par value	$ 0.001	$ 0.001
Common stock, par value	$ 0.0005	$ 0.0005