SEC Filing | Biogen

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biib-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-19311

BIOGEN INC.

(Exact name of registrant as specified in its charter)


Delaware						33-0112644
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

225 Binney Street, Cambridge, MA 02142

(617) 679-2000

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0005 par value

BIIB

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files): Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares of the issuer’s Common Stock, $0.0005 par value, outstanding as of May 2, 2022, was 146,452,013 shares.

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BIOGEN INC.

FORM 10-Q — Quarterly Report

For the Quarterly Period Ended March 31, 2022

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		Page
PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Income — For the Three Months Ended March 31, 2022 and 2021	5

	Condensed Consolidated Statements of Comprehensive Income — For the Three Months Ended March 31, 2022 and 2021	6

	Condensed Consolidated Balance Sheets — As of March 31, 2022 and December 31, 2021	7

	Condensed Consolidated Statements of Cash Flow — For the Three Months Ended March 31, 2022 and 2021	8

	Condensed Consolidated Statements of Equity — For the Three Months Ended March 31, 2022 and 2021	9

	Notes to Condensed Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65

Item 4.	Controls and Procedures	67

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	68

Item 1A.	Risk Factors	68

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84

Item 6.	Exhibits	85

Signatures		86

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are being made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 (the Act) with the intention of obtaining the benefits of the “Safe Harbor” provisions of the Act. These forward-looking statements may be accompanied by such words as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” "goal," “intend,” “may,” “plan,” “potential,” “possible,” “will,” “would” and other words and terms of similar meaning. Reference is made in particular to forward-looking statements regarding:

•the anticipated amount, timing and accounting of revenue; contingent, milestone, royalty and other payments under licensing, collaboration, acquisition or divestiture agreements; tax positions and contingencies; collectability of receivables; pre-approval inventory; cost of sales; research and development costs; compensation and other selling, general and administrative expense; amortization of intangible assets; foreign currency exchange risk; estimated fair value of assets and liabilities; and impairment assessments;

•expectations, plans and prospects relating to sales, pricing, growth and launch of our marketed and pipeline products;

•the potential impact of increased product competition in the markets in which we compete, including increased competition from new originator therapies, generics, prodrugs and biosimilars of existing products and products approved under abbreviated regulatory pathways, including generic or biosimilar versions of our products;

•patent terms, patent term extensions, patent office actions and expected availability and period of regulatory exclusivity;

•our plans and investments in our portfolio as well as implementation of our corporate strategy;

•the drivers for growing our business, including our plans and intention to commit resources relating to discovery, research and development programs and business development opportunities as well as the potential benefits and results of, and the anticipated completion of, certain business development transactions;

•the expectations, development plans and anticipated timelines, including costs and timing of potential clinical trials, filings and approvals, of our products, drug candidates and pipeline programs, including collaborations with third-parties, as well as the potential therapeutic scope of the development and commercialization of our and our collaborators’ pipeline products;

•the timing, outcome and impact of administrative, regulatory, legal and other proceedings related to our patents and other proprietary and intellectual property rights, tax audits, assessments and settlements, pricing matters, sales and promotional practices, product liability and other matters;

•our ability to finance our operations and business initiatives and obtain funding for such activities;

•adverse safety events involving our marketed products, generic or biosimilar versions of our marketed products or any other products from the same class as one of our products;

•the direct and indirect impact of the COVID-19 pandemic on our business and operations, including sales, expense, reserves and allowances, the supply chain, manufacturing, cyber-attacks or other privacy or data security incidents, research and development costs, clinical trials and employees;

•the current and potential impacts of the conflict in Ukraine, including impacts on our operations, sales and the possible disruptions or delays in our plans to conduct clinical trial activities in affected regions;

•the potential impact of healthcare reform in the United States (U.S.) and measures being taken worldwide designed to reduce healthcare costs and limit the overall level of government expenditures, including the impact of pricing actions and reduced reimbursement for our products;

•our manufacturing capacity, use of third-party contract manufacturing organizations, plans and timing relating to changes in our manufacturing capabilities, activities in new or existing manufacturing facilities and the expected timeline for the Solothurn manufacturing facility to begin manufacturing products or product candidates and for the gene therapy manufacturing facility in Research Triangle Park (RTP), North Carolina to be operational;

•the impact of the continued uncertainty of the credit and economic conditions in certain countries and our collection of accounts receivable in such countries;

•lease commitments, purchase obligations and the timing and satisfaction of other contractual obligations; and

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•the impact of new laws (including tax), regulatory requirements, judicial decisions and accounting standards.

These forward-looking statements involve risks and uncertainties, including those that are described in Item 1A. Risk Factors included in this report and elsewhere in this report, that could cause actual results to differ materially from those reflected in such statements. You should not place undue reliance on these statements. Forward-looking statements speak only as of the date of this report. Except as required by law, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

NOTE REGARDING COMPANY AND PRODUCT REFERENCES

References in this report to:

•“Biogen,” the “company,” “we,” “us” and “our” refer to Biogen Inc. and its consolidated subsidiaries; and

•“RITUXAN” refers to both RITUXAN (the trade name for rituximab in the U.S., Canada and Japan) and MabThera (the trade name for rituximab outside the U.S., Canada and Japan).

NOTE REGARDING TRADEMARKS

AVONEX®, PLEGRIDY®, RITUXAN®, RITUXAN HYCELA®, SPINRAZA®, TECFIDERA®, TYSABRI® and VUMERITY® are registered trademarks of Biogen.

ADUHELM™, BENEPALI™, BYOOVIZ™, FLIXABI™, FUMADERM™ and IMRALDI™ are trademarks of Biogen.

CIMZIA®, ENBREL®, EYLEA®, FAMPYRA™, GAZYVA®, HUMIRA®, LUCENTIS®, OCREVUS®, REMICADE® and other trademarks referenced in this report are the property of their respective owners.

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PART I FINANCIAL INFORMATION

BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in millions, except per share amounts)


	For the Three Months Ended March 31,
	2022		2021
Revenue:
Product, net	$	2,066.3	$	2,211.7
Revenue from anti-CD20 therapeutic programs	399.4		389.0
Other	66.1		93.3
Total revenue	2,531.8		2,694.0
Cost and expense:
Cost of sales, excluding amortization and impairment of acquired intangible assets	753.9		478.1
Research and development	551.7		514.2
Selling, general and administrative	634.9		595.0
Amortization and impairment of acquired intangible assets	66.9		98.1
Collaboration profit (loss) sharing	(117.3)		68.5
(Gain) loss on fair value remeasurement of contingent consideration	(7.1)		(33.8)

Restructuring charges	38.1		—
Total cost and expense	1,921.1		1,720.1
Income from operations	610.7		973.9
Other income (expense), net	(263.3)		(506.9)
Income before income tax expense and equity in loss of investee, net of tax	347.4		467.0
Income tax (benefit) expense	125.6		44.2
Equity in (income) loss of investee, net of tax	3.3		18.2
Net income	218.5		404.6
Net income (loss) attributable to noncontrolling interests, net of tax	(85.3)		(5.6)
Net income attributable to Biogen Inc.	$	303.8	$	410.2

Net income per share:
Basic earnings per share attributable to Biogen Inc.	$	2.06	$	2.70
Diluted earnings per share attributable to Biogen Inc.	$	2.06	$	2.69

Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Inc.	147.1		151.9
Diluted earnings per share attributable to Biogen Inc.	147.6		152.3

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in millions)


	For the Three Months Ended March 31,
	2022		2021
Net income attributable to Biogen Inc.	$	303.8	$	410.2
Other comprehensive income:
Unrealized gains (losses) on securities available for sale, net of tax	(9.7)		(0.8)
Unrealized gains (losses) on cash flow hedges, net of tax	15.9		149.6
Gains (losses) on net investment hedges, net of tax	6.2		22.4
Unrealized gains (losses) on pension benefit obligation, net of tax	0.9		2.0
Currency translation adjustment	(21.8)		(48.5)
Total other comprehensive income (loss), net of tax	(8.5)		124.7
Comprehensive income (loss) attributable to Biogen Inc.	295.3		534.9
Comprehensive income (loss) attributable to noncontrolling interests, net of tax	(85.3)		(4.9)
Comprehensive income (loss)	$	210.0	$	530.0

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except per share amounts)


	As of March 31, 2022		As of December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,749.3	$	2,261.4
Marketable securities	2,002.4		1,541.1
Accounts receivable, net	1,632.0		1,549.4
Due from anti-CD20 therapeutic programs	389.4		412.3
Inventory	1,215.4		1,351.5
Other current assets	927.4		740.8
Total current assets	7,915.9		7,856.5
Marketable securities	1,001.6		892.0
Property, plant and equipment, net	3,372.8		3,416.4
Operating lease assets	359.0		375.4
Intangible assets, net	2,150.8		2,221.3
Goodwill	5,758.0		5,761.1
Deferred tax asset	1,288.8		1,415.1
Investments and other assets	1,767.5		1,939.5
Total assets	$	23,614.4	$	23,877.3
LIABILITIES AND EQUITY
Current liabilities:
Current portion of notes payable	$	999.5	$	999.1
Taxes payable	317.3		174.7
Accounts payable	398.7		589.2
Accrued expense and other	2,231.1		2,535.2
Total current liabilities	3,946.6		4,298.2
Notes payable	6,275.7		6,274.0
Deferred tax liability	571.2		694.5
Long-term operating lease liabilities	312.3		330.4
Other long-term liabilities	1,287.9		1,320.5
Total liabilities	12,393.7		12,917.6
Commitments, contingencies and guarantees
Equity:
Biogen Inc. shareholders’ equity:
Preferred stock, par value $0.001 per share	—		—
Common stock, par value $0.0005 per share	0.1		0.1
Additional paid-in capital	119.0		68.2
Accumulated other comprehensive income (loss)	(115.2)		(106.7)
Retained earnings	14,215.5		13,911.7
Treasury stock, at cost	(2,977.1)		(2,977.1)
Total Biogen Inc. shareholders’ equity	11,242.3		10,896.2
Noncontrolling interests	(21.6)		63.5
Total equity	11,220.7		10,959.7
Total liabilities and equity	$	23,614.4	$	23,877.3

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(unaudited, in millions)


	For the Three Months Ended March 31,
	2022		2021
Cash flow from operating activities:
Net income	$	218.5	$	404.6
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization	143.1		102.6
Impairment of intangible assets	—		44.3
Excess and obsolescence charges related to inventory	281.5		11.9

Share-based compensation	67.6		70.0
Contingent consideration	(7.1)		(33.8)
Deferred income taxes	1.0		(15.0)
(Gain) loss on strategic investments	191.1		437.6
(Gain) loss on equity method investments	3.3		18.2
Other	43.3		59.8
Changes in operating assets and liabilities, net:
Accounts receivable	(87.5)		37.2
Due from anti-CD20 therapeutic programs	22.9		43.8
Inventory	(142.6)		(112.5)
Accrued expense and other current liabilities	(461.6)		(283.6)
Income tax assets and liabilities	101.9		64.8
Other changes in operating assets and liabilities, net	(213.6)		(80.9)
Net cash flow provided by (used in) operating activities	161.8		769.0
Cash flow from investing activities:
Purchases of property, plant and equipment	(57.9)		(92.6)
Proceeds from sales and maturities of marketable securities	543.6		819.2
Purchases of marketable securities	(1,133.5)		(913.3)
Proceeds from divestiture of Hillerød, Denmark manufacturing operations	—		28.1


Proceeds from the sales of strategic investments	—		91.2
Other	(0.2)		2.7
Net cash flow provided by (used in) investing activities	(648.0)		(64.7)
Cash flow from financing activities:
Purchases of treasury stock	—		(600.0)
Payments related to issuance of stock for share-based compensation arrangements, net	(20.8)		(27.1)
Repayment of borrowings and premiums paid on debt exchange	—		(169.3)


Net (distribution) contribution to noncontrolling interest	0.2		—
Other	4.1		11.4
Net cash flow provided by (used in) financing activities	(16.5)		(785.0)
Net increase (decrease) in cash and cash equivalents	(502.7)		(80.7)
Effect of exchange rate changes on cash and cash equivalents	(9.4)		(33.0)
Cash and cash equivalents, beginning of the period	2,261.4		1,331.2
Cash and cash equivalents, end of the period	$	1,749.3	$	1,217.5

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in millions)


	Preferred stock			Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings		Treasury stock			Total Biogen Inc. shareholders’ equity		Noncontrolling interests		Total equity
	Shares	Amount		Shares	Amount								Shares	Amount
Balance, December 31, 2021	—	$	—	170.8	$	0.1	$	68.2	$	(106.7)	$	13,911.7	(23.8)	$	(2,977.1)	$	10,896.2	$	63.5	$	10,959.7
Net income	—	—		—	—		—		—		303.8		—	—		303.8		(85.3)		218.5
Other comprehensive income (loss), net of tax	—	—		—	—		—		(8.5)		—		—	—		(8.5)		—		(8.5)

Capital contribution from noncontrolling interest	—	—		—	—		—		—		—		—	—		—		0.2		0.2


Issuance of common stock under stock option and stock purchase plans	—	—		0.1	—		18.9		—		—		—	—		18.9		—		18.9
Issuance of common stock under stock award plan	—	—		0.4	—		(39.7)		—		—		—	—		(39.7)		—		(39.7)
Compensation related to share-based payments	—	—		—	—		70.4		—		—		—	—		70.4		—		70.4
Other	—	—		—	—		1.2		—		—		—	—		1.2		—		1.2
Balance, March 31, 2022	—	$	—	171.3	$	0.1	$	119.0	$	(115.2)	$	14,215.5	(23.8)	$	(2,977.1)	$	11,242.3	$	(21.6)	$	11,220.7

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - (Continued)

(unaudited, in millions)


	Preferred stock			Common stock			Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings		Treasury stock			Total Biogen Inc. shareholders’ equity		Noncontrolling interests		Total equity
	Shares	Amount		Shares	Amount								Shares	Amount
Balance, December 31, 2020	—	$	—	176.2	$	0.1	$	—	$	(299.0)	$	13,976.3	(23.8)	$	(2,977.1)	$	10,700.3	$	(14.2)	$	10,686.1
Net income	—	—		—	—		—		—		410.2		—	—		410.2		(5.6)		404.6
Other comprehensive income (loss), net of tax	—	—		—	—		—		124.7		—		—	—		124.7		0.7		125.4

Capital contribution from noncontrolling interest	—	—		—	—		—		—		—		—	—		—		0.1		0.1
Repurchase of common stock pursuant to the 2020 Share Repurchase Program, at cost	—	—		—	—		—		—		—		(2.2)	(600.0)		(600.0)		—		(600.0)
Retirement of common stock pursuant to the 2020 Share Repurchase Program, at cost	—	—		(2.2)	—		(93.8)		—		(506.2)		2.2	600.0		—		—		—
Issuance of common stock under stock option and stock purchase plans	—	—		0.1	—		19.7		—		—		—	—		19.7		—		19.7
Issuance of common stock under stock award plan	—	—		0.3	—		—		—		(46.8)		—	—		(46.8)		—		(46.8)
Compensation related to share-based payments	—	—		—	—		72.6		—		—		—	—		72.6		—		72.6
Other	—	—		—	—		1.5		—		—		—	—		1.5		—		1.5
Balance, March 31, 2021	—	$	—	174.4	$	0.1	$	—	$	(174.3)	$	13,833.5	(23.8)	$	(2,977.1)	$	10,682.2	$	(19.0)	$	10,663.2

See accompanying notes to these unaudited condensed consolidated financial statements.

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BIOGEN INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

References in these notes to "Biogen," the "company," "we," "us" and "our" refer to Biogen Inc. and its consolidated subsidiaries.

Business Overview

Biogen is a global biopharmaceutical company focused on discovering, developing and delivering worldwide innovative therapies for people living with serious neurological and neurodegenerative diseases as well as related therapeutic adjacencies. We have a leading portfolio of medicines to treat multiple sclerosis (MS), have introduced the first approved treatment for spinal muscular atrophy (SMA) and are providing the first and only approved treatment to address a defining pathology of Alzheimer's disease. We also commercialize biosimilars of advanced biologics and focus on advancing our pipeline in neuroscience and specialized immunology. Lastly, we are focused on accelerating our efforts in digital health to support our commercial and pipeline programs while also creating opportunities for potential digital therapeutics. We support our drug discovery and development efforts through the commitment of significant resources to discovery, research and development programs and business development opportunities.

Our marketed products include TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA for the treatment of MS; SPINRAZA for the treatment of SMA; ADUHELM for the treatment of Alzheimer's disease; and FUMADERM for the treatment of severe plaque psoriasis. We have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia (CLL) and other conditions; RITUXAN HYCELA for the treatment of non-Hodgkin's lymphoma and CLL; GAZYVA for the treatment of CLL and follicular lymphoma; OCREVUS for the treatment of primary progressive MS (PPMS) and relapsing MS (RMS); and other potential anti-CD20 therapies, including mosunetuzumab, pursuant to our collaboration arrangements with Genentech, Inc. (Genentech), a wholly-owned member of the Roche Group. For additional information on our collaboration arrangements with Genentech, please read Note 18, Collaborative and Other Relationships, to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K).

Our innovative drug development and commercialization activities are complemented by our biosimilar business that expands access to medicines and reduces the cost burden for healthcare systems. Through our collaboration with Samsung Bioepis Co., Ltd. (Samsung Bioepis) we market and sell BENEPALI, an etanercept biosimilar referencing ENBREL, IMRALDI, an adalimumab biosimilar referencing HUMIRA, and FLIXABI, an infliximab biosimilar referencing REMICADE, in certain countries in Europe. We have also secured the exclusive rights to commercialize BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, which was approved in the U.S., the European Union (E.U.) and the United Kingdom (U.K.) during the third quarter of 2021. For additional information on our collaboration arrangements with Samsung Bioepis, please read Note 16, Collaborative and Other Relationships, to these unaudited condensed consolidated financial statements (condensed consolidated financial statements).

Basis of Presentation

In the opinion of management, our condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair statement of our financial statements for interim periods in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The information included in this quarterly report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and the accompanying notes included in our 2021 Form 10-K. Our accounting policies are described in the Notes to Consolidated Financial Statements in our 2021 Form 10-K and updated, as necessary, in this report. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for the three months ended March 31, 2022, are not necessarily indicative of the operating results for the full year or for any other subsequent interim period.

We operate as one operating segment, focused on discovering, developing and delivering worldwide innovative therapies for people living with serious neurological and neurodegenerative diseases as well as related therapeutic adjacencies.

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BIOGEN INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited, continued)

Consolidation

Our condensed consolidated financial statements reflect our financial statements, those of our wholly-owned subsidiaries and those of certain variable interest entities where we are the primary beneficiary. For consolidated entities where we own or are exposed to less than 100.0% of the economics, we record net income (loss) attributable to noncontrolling interests, net of tax in our condensed consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation.

In determining whether we are the primary beneficiary of a variable interest entity, we apply a qualitative approach that determines whether we have both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. We continuously assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in us consolidating or deconsolidating one or more of our collaborators or partners.

Use of Estimates

The preparation of our condensed consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and assumptions. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenue and expense. Actual results may differ from these estimates.

The length of time and full extent to which the COVID-19 pandemic directly or indirectly impacts our business, results of operations and financial condition, including sales, expense, reserves and allowances, the supply chain, manufacturing, clinical trials, research and development costs and employee-related costs, depends on future developments that are highly uncertain, subject to change and are difficult to predict, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19 as well as the economic impact on local, regional, national and international customers and markets. Additionally, the ongoing geopolitical tensions related to Russia's invasion of Ukraine, and the related sanctions and other penalties imposed, are creating substantial uncertainty in the global economy. The extent and duration of the conflict, sanctions and resulting market disruptions are highly unpredictable. We have made estimates of the impact of the COVID-19 pandemic and the ongoing geopolitical conflict within our condensed consolidated financial statements and there may be changes to those estimates in future periods.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that we adopt as of the specified effective date.

We do not believe that the adoption of recently issued standards have had or may have a material impact on our condensed consolidated financial statements or disclosures.

2. RESTRUCTURING, BUSINESS TRANSFORMATION AND OTHER COST SAVING INITIATIVES

2022 Cost Saving Initiatives

In December 2021 and May 2022 we announced our plans to implement a series of cost-reduction measures during 2022. These savings are expected to be achieved through a number of initiatives, including reductions to our workforce, primarily within our global Alzheimer's infrastructure, the consolidation of certain real estate locations and operating efficiency gains across our selling, general and administrative and research and development functions.

Under these initiatives, we expect to incur restructuring charges ranging from approximately $100.0 million to $150.0 million. These amounts are primarily related to severance and are expected to be substantially incurred and paid by the end of 2022.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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For the three months ended March 31, 2022, we recognized $27.7 million of employee related costs, primarily related to severance. These costs were recorded in restructuring charges in our condensed consolidated statements of income. Our restructuring reserve is included in accrued expense and other in our condensed consolidated balance sheets.

Following an evaluation of our current capacity needs, in March 2022 we ceased using a patient services office space in Durham, North Carolina. We are marketing the space for sublease. Our decision to cease using the facility resulted in the immediate expense of certain leasehold improvements and other assets at this facility, which we do not believe can be adequately recovered in a sublease. As a result, for the three months ended March 31, 2022, we recognized approximately $10.4 million of accelerated depreciation expense, which was recorded in restructuring charges in our condensed consolidated statements of income.

The following table summarizes the charges and spending related to our 2022 cost saving initiatives for the three months ended March 31, 2022:


(In millions)	Workforce Reduction		Total
Restructuring reserve as of December 31, 2021	$	—	$	—
Expense	27.7		27.7
Payment	(6.2)		(6.2)

Restructuring reserve as of March 31, 2022	$	21.5	$	21.5

3. REVENUE

Product Revenue

Revenue by product is summarized as follows:


	For the Three Months Ended March 31,
	2022						2021
(In millions)	United States		Rest of World		Total		United States		Rest of World		Total
Multiple Sclerosis (MS):
Fumarate(1)	$	242.3	$	295.6	$	537.9	$	236.0	$	316.9	$	552.9
Interferon(2)	182.3		127.3		309.6		241.8		158.7		400.5
TYSABRI	284.5		236.3		520.8		273.3		230.0		503.3
FAMPYRA	—		26.2		26.2		—		26.6		26.6
Subtotal: MS	709.1		685.4		1,394.5		751.1		732.2		1,483.3

Spinal Muscular Atrophy:
SPINRAZA	163.3		309.2		472.5		148.7		371.8		520.5

Alzheimer's disease:
ADUHELM(3)	2.8		—		2.8		—		—		—

Biosimilars:
BENEPALI	—		114.7		114.7		—		121.7		121.7
IMRALDI	—		57.1		57.1		—		57.9		57.9
FLIXABI	—		22.5		22.5		—		25.5		25.5
Subtotal: Biosimilars	—		194.3		194.3		—		205.1		205.1

Other:
FUMADERM	—		2.2		2.2		—		2.8		2.8
Total product revenue	$	875.2	$	1,191.1	$	2,066.3	$	899.8	$	1,311.9	$	2,211.7

(1) Fumarate includes TECFIDERA and VUMERITY. VUMERITY became commercially available in the E.U. during the fourth quarter of 2021.

(2) Interferon includes AVONEX and PLEGRIDY.

(3) In June 2021 the U.S. Food and Drug Administration (FDA) granted accelerated approval of ADUHELM, which became commercially available in the U.S. during the second quarter of 2021. For additional information, please read Note 16, Collaborative and Other Relationships - Eisai Co., Ltd. - ADUHELM Collaboration Agreement, to these condensed consolidated financial statements.

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We recognized revenue from two wholesalers accounting for 26.3% and 10.5% of gross product revenue for the three months ended March 31, 2022, and 30.0% and 9.3% of gross product revenue for the three months ended March 31, 2021.

An analysis of the change in reserves for discounts and allowances is summarized as follows:


(In millions)	Discounts		Contractual Adjustments		Returns		Total
Balance, December 31, 2021	$	137.7	$	759.6	$	38.0	$	935.3
Current provisions relating to sales in current year	169.0		659.5		4.0		832.5
Adjustments relating to prior years	(3.9)		(40.2)		(2.5)		(46.6)
Payments/credits relating to sales in current year	(101.2)		(271.6)		(0.5)		(373.3)
Payments/credits relating to sales in prior years	(58.9)		(314.5)		(6.5)		(379.9)
Balance, March 31, 2022	$	142.7	$	792.8	$	32.5	$	968.0

The total reserves above, which are included in our condensed consolidated balance sheets, are summarized as follows:


(In millions)	As of March 31, 2022		As of December 31, 2021
Reduction of accounts receivable	$	136.9	$	133.2
Component of accrued expense and other	831.1		802.1
Total revenue-related reserves	$	968.0	$	935.3

Revenue from Anti-CD20 Therapeutic Programs

Revenue from anti-CD20 therapeutic programs is summarized in the table below. For the purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.


	For the Three Months Ended March 31,
(In millions)	2022		2021
Biogen’s share of pre-tax profits in the U.S. for RITUXAN and GAZYVA	$	143.2	$	174.1
OCREVUS and other revenue from anti-CD20 therapeutic programs	256.2		214.9
Total revenue from anti-CD20 therapeutic programs	$	399.4	$	389.0

For additional information on our collaboration arrangements with Genentech, please read Note 18, Collaborative and Other Relationships, to our consolidated financial statements included in our 2021 Form 10-K.

Other Revenue

Other revenue is summarized as follows:


	For the Three Months Ended March 31,
(In millions)	2022		2021
Revenue from collaborative and other relationships:
Revenue earned under our technical development agreement, manufacturing services agreements and royalty revenue on biosimilar products with Samsung Bioepis	$	8.0	$	3.9

Other royalty and corporate revenue:
Royalty	10.6		6.2
Other corporate	47.5		83.2
Total other revenue	$	66.1	$	93.3

We receive royalties from net sales on products related to patents that we have out-licensed and we record other corporate revenue primarily from amounts earned under contract manufacturing agreements.

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4. INVENTORY

The components of inventory are summarized as follows:


(In millions)	As of March 31, 2022		As of December 31, 2021
Raw materials	$	354.5	$	349.6
Work in process	655.6		814.0
Finished goods	205.3		187.9
Total inventory	$	1,215.4	$	1,351.5

In April 2022 the Centers for Medicare and Medicaid Services (CMS) released the final National Coverage Decision (NCD) for the class of anti-amyloid treatments in Alzheimer’s disease, including ADUHELM. The final NCD confirmed coverage with evidence development, in which patients with Medicare can only access treatment if they are part of an approved clinical trial. We expect that this decision will reduce future demand for ADUHELM to a minimal level. During the first quarter of 2022 we wrote-off approximately $275.0 million of inventory related to ADUHELM, as a result of this CMS decision, which was recognized in cost of sales within our condensed consolidated statements of income. We have recognized approximately $136.0 million related to Eisai's 45.0% share of these charges in collaboration profit (loss) sharing within our condensed consolidated statements of income.

During the fourth quarter of 2021 we wrote-off approximately $120.0 million of inventory in excess of forecasted demand related to ADUHELM, which was recognized in cost of sales within our condensed consolidated statements of income. We have recognized approximately $59.0 million related to Eisai's 45.0% share of these charges in collaboration profit (loss) sharing within our condensed consolidated statements of income during the fourth quarter of 2021.

As of March 31, 2022, our total ADUHELM inventory was de minimis. As of December 31, 2021, we had approximately $223.0 million of ADUHELM inventory. For additional information please read Note 16, Collaborative and Other Relationships, to these condensed consolidated financial statements.

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5. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets, net of accumulated amortization, impairment charges and adjustments are summarized as follows:


		As of March 31, 2022						As of December 31, 2021
(In millions)	Estimated Life	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Completed technology	4-28 years	$	7,413.1	$	(5,455.4)	$	1,957.7	$	7,413.1	$	(5,388.5)	$	2,024.6
In-process research and development	Indefinite until commercialization	129.1		—		129.1		132.7		—		132.7
Trademarks and trade names	Indefinite	64.0		—		64.0		64.0		—		64.0
Total intangible assets		$	7,606.2	$	(5,455.4)	$	2,150.8	$	7,609.8	$	(5,388.5)	$	2,221.3

Amortization and Impairments

For the three months ended March 31, 2022, amortization and impairment of acquired intangible assets totaled $66.9 million, compared to $98.1 million in the prior year comparative period. For the three months ended March 31, 2022, we had no impairment charges.

For the three months ended March 31, 2021, amortization and impairment of acquired intangible assets reflects the impact of a $44.3 million impairment charge related to vixotrigine (BIIB074) for the potential treatment of trigeminal neuralgia (TGN).

Completed Technology

Completed technology primarily relates to our acquisition of all remaining rights to TYSABRI as well as other amounts related to our other marketed products and programs acquired through business combinations.

IPR&D Related to Business Combinations

In-process research and development (IPR&D) represents the fair value assigned to research and development assets that we acquired as part of a business combination and had not yet reache