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Document and Company Information - USD ($)	9 Months Ended
Document and Company Information - USD ($)	Sep. 30, 2009	Oct. 14, 2009	Jun. 30, 2009
Document And Company Information [Abstract]
Entity Registrant Name	Biogen Idec Inc.
Entity Central Index Key	0000875045
Document Type	10-Q
Document Period End Date	Sep. 30, 2009
Amendment Flag	false
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		289,198,517

Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2009	Sep. 30, 2008	Sep. 30, 2009	Sep. 30, 2008
Revenues:
Product	$ 801,689	$ 758,260	$ 2,326,067	$ 2,107,816
Unconsolidated joint business	283,919	298,979	838,307	825,024
Other revenues	34,910	35,725	85,918	95,754
Total revenues	1,120,518	1,092,964	3,250,292	3,028,594
Costs and expenses:
Cost of sales, excluding amortization of acquired intangible assets	93,486	107,493	282,404	300,828
Research and development	304,055	268,800	999,986	779,291
Selling, general and administrative	226,755	232,824	669,415	694,342
Collaboration profit sharing	60,697	43,533	152,608	98,368
Amortization of acquired intangible assets	51,347	94,464	233,830	242,114
Acquired in-process research and development	0	0	0	25,000
Total costs and expenses	736,340	747,114	2,338,243	2,139,943
Income from operations	384,178	345,850	912,049	888,651
Other income (expense), net	9,360	(23,713)	30,886	(24,651)
Income before income tax expense	393,538	322,137	942,935	864,000
Income tax expense	113,936	114,337	271,869	282,320
Net income	279,602	207,800	671,066	581,680
Net income attributable to noncontrolling interest, net of tax	1,939	1,012	6,571	5,167
Net income attributable to Biogen Idec Inc.	$ 277,663	$ 206,788	$ 664,495	$ 576,513
Basic earnings per share attributable to Biogen Idec Inc.	$ 0.96	$ 0.71	$ 2.30	$ 1.97
Diluted earnings per share attributable to Biogen Idec Inc.	$ 0.95	$ 0.7	$ 2.28	$ 1.95
Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Idec Inc.	288,917	291,408	288,416	292,613
Diluted earnings per share attributable to Biogen Idec Inc.	291,037	293,921	290,368	295,515

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$ 585,788	$ 622,385
Marketable securities	821,888	719,586
Collateral received for loaned securities	0	29,991
Accounts receivable, net	550,995	446,665
Due from unconsolidated joint business	193,279	206,925
Loaned securities	0	29,446
Inventory	278,686	263,602
Other current assets	141,623	139,400
Total current assets	2,572,259	2,458,000
Marketable securities	1,497,447	891,406
Property, plant and equipment, net	1,634,696	1,594,754
Intangible assets, net	1,927,115	2,161,058
Goodwill	1,138,621	1,138,621
Investments and other assets	256,299	235,152
Total assets	9,026,437	8,478,991
Current liabilities:
Collateral payable on loaned securities	0	29,991
Accounts payable	108,547	107,417
Taxes payable	59,961	223,260
Accrued expenses and other	537,408	534,887
Current portion of notes payable and line of credit	15,452	27,667
Total current liabilities	721,368	923,222
Notes payable and line of credit	1,085,844	1,085,431
Long-term deferred tax liability	289,654	356,017
Other long-term liabilities	331,761	280,369
Total liabilities	$ 2,428,627	$ 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	6,184,315	6,073,957
Accumulated other comprehensive income (loss)	37,114	(11,106)
Retained earnings	781,321	270,180
Treasury stock, at cost	(438,710)	(527,097)
Total Biogen Idec Inc. shareholders' equity	6,564,189	5,806,083
Noncontrolling interest	33,621	27,869
Total equity	6,597,810	5,833,952
Total liabilities and equity	$ 9,026,437	$ 8,478,991

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2009	Sep. 30, 2008
Cash flows from operating activities:
Net income	$ 671,066	$ 581,680
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization of property, plant and equipment and intangible assets	334,761	340,042
Acquired in-process research and development	0	25,000
Share-based compensation	119,902	104,339
Non-cash interest (income) expense and foreign exchange remeasurement loss (gain), net	(12,861)	(11,288)
Deferred income taxes	(72,580)	(57,591)
Realized loss (gain) on sale of marketable securities and strategic investments	(17,185)	3,774
Write-down of inventory to net realizable value	13,431	22,472
Impairment of marketable securities, investments and other assets	9,866	31,502
Excess tax benefit from stock options	(3,194)	(27,424)
Changes in operating assets and liabilities, net:
Accounts receivable	(96,215)	(95,337)
Due from unconsolidated joint business	13,646	(29,856)
Inventory	(25,195)	(34,376)
Other assets	8,555	24,898
Accrued expenses and other current liabilities	(40,565)	155,437
Other liabilities and taxes payable	(110,706)	121,928
Net cash flows provided by operating activities	792,726	1,155,200
Cash flows from investing activities:
Purchases of marketable securities	(3,001,156)	(1,801,056)
Proceeds from sales and maturities of marketable securities	2,334,093	2,135,065
Collateral received under securities leading	29,991	30,080
Acquisitions, net of cash acquired	0	(25,000)
Purchases of property, plant and equipment	(110,129)	(221,961)
Proceeds from the sale of property, plant and equipment	0	16
Purchases of other investments	(36,519)	(17,260)
Proceeds from the sale of a strategic equity investment	6,067	0
Net cash flows (used in) provided by investing activities	(777,653)	99,884
Cash flows from financing activities:
Purchase of treasury stock	(57,631)	(559,767)
Proceeds from issuance of stock for share-based compensation arrangements	33,236	167,032
Change in cash overdraft	7,497	18,052
Excess tax benefit from stock options	3,194	27,424
Proceeds from borrowings	0	986,980
Repayment of borrowings	(10,867)	(1,512,474)
Obligation under securities lending	(29,991)	(30,080)
Net cash flows used in financing activities	(54,562)	(902,833)
Net (decrease) increase in cash and cash equivalents	(39,489)	352,251
Effect of exchange rate changes on cash and cash equivalents	2,892	(1,212)
Cash and cash equivalents, beginning of the period	622,385	659,662
Cash and cash equivalents, end of the period	$ 585,788	$ 1,010,701

Intangible Assets and Goodwill

9 Months Ended

Sep. 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:


			As of September 30,							As of December 31,
			2009							2008
	Estimated				Accumulated							Accumulated
(In millions)	Life		Cost		Amortization			Net		Cost		Amortization			Net

Intangible assets:
Out-licensed patents		12 years	$	578.0	$	(288.6	)	$	289.4	$	578.0	$	(250.3	)	$	327.7
Core/developed technology		15-23 years		3,005.3		(1,434.0	)		1,571.3		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		(1.1	)		1.9		3.0		(0.9	)		2.1
Assembled workforce		4 years		2.1		(1.6	)		0.5		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	$	(1,738.0	)	$	1,927.1	$	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

Effective January 1, 2009, we implemented an amendment to the accounting and disclosure requirements related to intangible assets. This amendment 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 guidance 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 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.

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 potential extension or renewal of the contract or patent. Our policy is based on the general accounting principles for amortization of intangible assets, which requires that the amortization of intangible assets reflect the pattern that the economic benefits of the intangible assets are consumed.

Intangible assets related to patents, licenses, core/developed technology, assembled workforce, and distribution rights are amortized over their remaining estimated useful lives. 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.

Our most significant intangible asset is the core technology related to our AVONEX product which was established at the time of the Merger. The net book value of this asset as of September 30, 2009 was $1,554.6 million. We believe the economic benefit of this core technology is consumed as revenue is generated from our AVONEX product. An analysis of the anticipated lifetime revenue of AVONEX is performed at least 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 this process has allowed us to reliably determine the best estimate of the pattern in which we will consume the economic benefits of our core technology intangible asset, the model could result in deferring amortization charges to future periods in certain instances, due to continued sales of the product at a nominal level after patent expiration or otherwise. 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 amortization amount. This minimum amortization amount is recalculated each year based on the remaining unamortized balance of the intangible asset and the remaining estimated useful life of the intangible asset and is compared to the amount of amortization determined under the economic consumption model. We record amortization based upon the higher of the amount of amortization determined under the economic consumption model or the minimum amortization amount determined under the straight-line method.

In September 2009, we were issued a U.S. patent for the use of beta interferon for immunomodulation or treating a viral condition, viral disease, cancers or tumors. This patent, expiring in September 2026, covers the treatment of multiple sclerosis with AVONEX, which is our brand of recombinant beta interferon. This patent extends the expected remaining life of our core intangible asset through 2026 and thus, under the straight-line method, reduces the minimum amortization amount.

We completed our most recent long range planning cycle in the third quarter, which includes an analysis of the anticipated product sales of AVONEX. The outcome of this analysis is based on certain assumptions that we evaluate on a periodic basis, such as the expected impact of competitor products and our own pipeline product candidates, as well as the issuance of new patents or extension of existing patents. Based on this year’s analysis, we have continued to amortize this asset on the economic consumption model for the third quarter of 2009, and expect to apply the same model for the subsequent three quarters. The results of our analysis were most significantly impacted by the extension of the assumed remaining life of the core intangible asset due to the issuance of the U.S. patent in September 2009.

Summary of Expense Recognized Related to Intangible Assets


	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
(In millions)	2009		2008		2009		2008

Amortization of acquired intangible assets	$	51.3	$	94.5	$	233.8	$	242.1
Acquired in-process research and development	$	—	$	—	$	—	$	25.0

The decrease in amortization related to our acquired intangible assets for the three and nine months ended September 30, 2009, as compared to the prior year comparative periods, was primarily due to the decrease in amortization attributable to our core intangible asset. This decrease in amortization resulted from changes in the estimate of the future revenues of AVONEX which serves as the basis for our calculation of economic consumption for core technology.

Amortization of acquired intangible assets is expected to be approximately $283.0 million for the twelve months ended December 31, 2009 and between $160.0 million and $220.0 million for each of the following five years.

In the first quarter of 2008, we recorded an in-process research and development, or 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

9 Months Ended

Sep. 30, 2009

Fair Value Measurements [Abstract]

Fair Value Measurements


5.	Fair Value Measurements

Effective January 1, 2009, we adopted a newly issued accounting standard for fair value measurements of all nonfinancial assets and nonfinancial liabilities not recognized or disclosed at fair value in the financial statements on a recurring basis. The adoption of the accounting standard for these assets and liabilities did not have a material impact on our financial position or results of operations; however, this standard may impact us in subsequent periods and require additional disclosures.

During the quarter ended June 30, 2009, we implemented newly issued accounting standards which provide guidance for determining fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying circumstances that indicate that a transaction is not orderly. Specifically, the new standards provide additional guidelines for making fair value measurements more consistent with the principles presented and provide authoritative guidance in determining whether a market is active or inactive, and whether a transaction is distressed. This guidance 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 the new standards 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.

During the second quarter of 2009, we also implemented a newly issued accounting standard requiring disclosure 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 guidance addresses disclosure requirements, the adoption of this standard 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 September 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 September 30, 2009 and December 31, 2008.

Our strategic investments are investments in publicly traded equity securities where fair value is readily determinable and have therefore been classified as Level 1 assets.

Our venture capital investments are the only assets for which we used Level 3 inputs to determine the fair value. Venture capital investments represented approximately 0.3% of total assets as of both September 30, 2009 and December 31, 2008. 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.

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


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

Assets:
Cash equivalents	$	483.5	$	—	$	483.5	$	—
Marketable debt securities:
Corporate debt securities		446.2		—		446.2		—
Government securities		1,638.9		—		1,638.9		—
Mortgage and other asset backed securities		234.2		—		234.2		—
Strategic investments		4.2		4.2		—		—
Venture capital investments		23.1		—		—		23.1
Derivative contracts		—		—		—		—
Plan assets for deferred compensation		13.2		—		13.2		—

Total	$	2,843.3	$	4.2	$	2,816.0	$	23.1

Liabilities:
Derivative contracts		36.0		—		36.0		—

Total	$	36.0	$	—	$	36.0	$	—


							Significant
	Balance as of		Quoted Prices in		Significant Other		Unobservable
	December 31,		Active Markets		Observable Inputs		Inputs
(In millions)	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	$	—

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:


	For the Three Months				For the Nine Months
	Ended September 30,				Ended September 30,
(In millions)	2009		2008		2009			2008

Beginning Balance	$	21.6	$	24.6	$	23.9		$	28.1
Total net unrealized gains (losses) included in earnings		0.9		2.2		(2.2	)		(2.6	)
Purchases, issuances, and settlements		0.6		1.6		1.4			2.9

Ending Balance	$	23.1	$	28.4	$	23.1		$	28.4

Summary of Liabilities Recorded at Carrying Value

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.

The fair and carrying value of our debt instruments are detailed as follows:


	As of September 30, 2009				As of December 31, 2008
	Fair		Carrying		Fair		Carrying
(In millions)	Value		Value		Value		Value

Credit line from Dompé	$	17.5	$	17.5	$	16.4	$	16.8
Notes payable to Fumedica		31.7		29.7		37.5		38.5
6.0% Senior Notes due 2013		476.7		449.6		429.8		449.6
6.875% Senior Notes due 2018		602.1		604.5		562.4		608.2

Total	$	1,128.0	$	1,101.3	$	1,046.1	$	1,113.1

Financial Instruments

9 Months Ended

Sep. 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 tables summarize our marketable securities and strategic investments (in millions):


			Gross		Gross
	Fair		Unrealized		Unrealized			Amortized
As of September 30, 2009 (In millions):	Value		Gains		Losses			Cost

Available-for-sale
Corporate debt securities
Current	$	167.1	$	1.5	$	—		$	165.6
Non-current		279.1		6.7		(0.2	)		272.6
Government securities
Current		650.5		1.5		—			649.0
Non-current		988.4		6.8		(1.1	)		982.7
Mortgage and other asset backed securities
Current		4.3		0.1		—			4.2
Non-current		229.9		5.4		(0.1	)		224.6

Total available-for-sale securities	$	2,319.3	$	22.0	$	(1.4	)	$	2,298.7

Other Investments
Strategic investments, non-current	$	4.2	$	0.9	$	(0.2	)	$	3.5


			Gross		Gross
	Fair		Unrealized		Unrealized			Amortized
As of December 31, 2008 (In millions):	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 September 30, 2009 and December 31, 2008, government securities included $384.1 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.

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 consolidated balance sheets and are not included in the tables above. As of September 30, 2009 and December 31, 2008, the commercial paper, including accrued interest, had fair and carrying values of $95.1 million and $42.7 million, respectively, and short-term debt securities had fair and carrying values of $388.4 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 September 30, 2009 and December 31, 2008 were as follows (in millions):


	As of September 30, 2009				As of December 31, 2008
	Estimated		Amortized		Estimated		Amortized
(In millions)	Fair Value		Cost		Fair Value		Cost

Due in one year or less	$	731.4	$	728.7	$	714.9	$	713.0
Due after one year through five years		1,397.2		1,382.8		733.7		722.0
Due after five years		190.7		187.2		191.8		189.2

Total	$	2,319.3	$	2,298.7	$	1,640.4	$	1,624.2

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

Impairments

Other-than-Temporary Impairments

In April 2009, we implemented newly issued accounting standards which provided guidance for the recognition, measurement and presentation of other-than-temporary impairments. These newly issued standards amended the other-than-temporary impairment model for debt securities and 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. The impairment model for equity securities was not affected.

Prior to our adoption of these new accounting standards in April 2009, we recognized all other-than-temporary impairment amounts related to our debt securities in earnings as required under the previously effective guidance which required that management assert that it had the ability and intent to hold a debt security until maturity or until we recovered the cost of our investment. Under the new accounting standards, 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, expected cash flows to be received must be evaluated to 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 losses relating to other factors, including those resulting from changes in interest rates, are recorded in accumulated other comprehensive income. The adoption of this guidance 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 the meaning of other-than-temporary impairment and its application to certain investments, as required by the general accounting principles provided under the Investment for Debt and Equity Securities Topic of the Codification. 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

During the nine months ended September 30, 2009, we recognized $3.6 million in charges for the other-than-temporary 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. No impairment losses were recognized through earnings related to available for sale securities during the three months ended September 30, 2009.

For the three and nine months ended September 30, 2008, we recognized $14.1 million and $19.3 million, respectively, in charges for the other-than-temporary impairment of available-for-sale securities primarily related to mortgage and asset backed securities.

For the three and nine months ended September 30, 2009 we recorded increases of $0.6 million and $4.3 million, respectively, in unrealized net gains accounted for through accumulated other comprehensive income, a component of shareholders’ equity. This compares to an increase of $2.4 million and a decrease of $5.7 million in unrealized net gains, respectively, in the comparable periods of the prior year.

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				For the Nine Months
	Ended September 30,				Ended September 30,
(In millions)	2009		2008		2009		2008

Proceeds from maturities and sales	$	696.5	$	743.2	$	2,334.1	$	2,135.1
Realized gains	$	3.1	$	0.9	$	17.0	$	11.6
Realized losses	$	1.3	$	10.6	$	3.4	$	15.4

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

Securities Lending

We previously loaned certain securities from our portfolio to other institutions. 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 September 30, 2009 and accordingly no collateral was held as of September 30, 2009.

Derivative Instruments

9 Months Ended

Sep. 30, 2009

Derivative Instruments [Abstract]

Derivative Instruments


7.	Derivative Instruments

Forward Contracts and Interest Rate Swaps

On January 1, 2009, we adopted a newly issued accounting standard which requires additional disclosure 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 this standard did not impact our financial position or results of operations.

Our primary market exposure is to interest rates and foreign exchange rates. We use certain derivative instruments to help manage this exposure. We execute these instruments with financial institutions we judge to be creditworthy and the majority of the foreign currencies are denominated in currencies of major industrial countries. We do not hold or issue derivative instruments for trading or speculative purposes.

We recognize all derivative instruments as either assets or liabilities at fair value in our consolidated balance sheets. We classify the cash flows from these instruments in the same category as the cash flows from the hedged items.

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 September 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 when the sale of product in the currency being hedged is recognized. To the extent ineffective, hedge transaction gains and losses are reported in other income (expense), net at each reporting date.

Foreign currency forward contracts that were entered into to hedge forecasted revenue were as follows:


	Notional Amount
	As of September 30,		As of December 31,
Foreign Currency: (In millions)	2009		2008

Euro	$	399.0	$	489.4
Canadian Dollar		36.7		34.1

Total	$	435.7	$	523.5

The portion of the fair value of these contracts that was included in accumulated other comprehensive income (loss) within total equity reflected losses of $34.7 million and $44.1 million as of September 30, 2009 and December 31, 2008, respectively. 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 September 30, 2009 and December 31, 2008, respectively, credit risk did not materially change the fair value of our foreign currency forward contracts.

In relation to our foreign currency forward contracts, we recognize gains and losses in earnings due to hedge ineffectiveness. During the three and nine months ended September 30, 2009 we recognized net losses of $0.1 million and $0.9 million, respectively. During the three and nine months ended September 30, 2008, we recognized net losses of $1.3 million and $2.4 million, respectively. In addition, we recognized $16.3 million and $28.6 million, respectively, of losses in product revenue for the settlement of certain effective cash flow hedge instruments for the three and nine months ended September 30, 2009 as compared to losses recognized in the amount of $2.3 million and $20.0 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 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 nine months ended September 30, 2009. In the three and nine months ended September 30, 2008, we recognized a net gain of $1.3 million and a net loss of $3.6 million, respectively, in earnings due to hedge ineffectiveness.

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 nine months ended September 30, 2009, approximately $1.3 million and $4.0 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 as of September 30, 2009 and December 31, 2008:

Foreign Currency Contracts

Asset Derivatives

Liability Derivatives

Balance Sheet

(In millions)

Location

Fair Value

Location

Fair Value

September 30, 2009

Other Current Assets

—

Accrued Expenses and Other

34.8

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 derivatives designated as hedging instruments on the consolidated statements of income for the three and nine months ended September 30, 2009 and 2008:


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

For the Three Months Ended
September 30, 2009:
Foreign currency contracts	$	(34.7	)	Revenue	$	(16.3	)	Other income (expense)	$	(0.1	)
Interest rate swap	$	—		Interest expense	$	—		Interest expense	$	—
September 30, 2008:
Foreign currency contracts	$	5.7		Revenue	$	(2.3	)	Other income (expense)	$	(1.3	)
Interest rate swap	$	—		Interest expense	$	—		Interest expense	$	1.3

For the Nine Months Ended
September 30, 2009:
Foreign currency contracts	$	(34.7	)	Revenue	$	(28.6	)	Other income (expense)	$	(0.9	)
Interest rate swap	$	—		Interest expense	$	—		Interest expense	$	—
September 30, 2008:
Foreign currency contracts	$	5.7		Revenue	$	(20.0	)	Other income (expense)	$	(2.4	)
Interest rate swap	$	—		Interest expense	$	—		Interest expense	$	(3.6	)

Other Derivatives

During the quarter ended September 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 September 30, 2009 the aggregate notional amount of our outstanding foreign currency contracts was $115.6 million. The fair value of these contracts was a liability of $1.2 million. Net losses of $2.2 million and a de minimis amount, respectively, were recognized as a component of other income (expense), net related to these contracts in the three and nine months ended September 30, 2009.

Share Based Payments

9 Months Ended

Sep. 30, 2009

Share-Based Payments [Abstract]

Share-Based Payments


11.	Share-Based Payments

The following table summarizes share-based compensation expense included within our consolidated statements of income:


	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
(In millions)	2009			2008			2009			2008

Research and development	$	15.6		$	14.0		$	46.0		$	45.8
Selling, general and administrative		27.2			24.5			78.7			64.0

Subtotal		42.8			38.5			124.7			109.8
Capitalized share-based payment costs		(1.7	)		(1.8	)		(4.8	)		(5.5	)

Share-based compensation expense included in total costs and expenses		41.1			36.7			119.9			104.3
Income tax effect		(12.6	)		(11.4	)		(36.8	)		(32.2	)

Share-based compensation expense included in net income attributable to Biogen Idec, Inc.	$	28.5		$	25.3		$	83.1		$	72.1

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. The following table summarizes share-based compensation expense associated with each of these programs:


	For the Three						For the Nine
	Months Ended						Months Ended
	September 30,						September 30,
(In millions)	2009			2008			2009			2008

Stock options	$	5.5		$	4.9		$	16.6		$	14.3
Time-vested restricted stock units		34.4			30.5			99.9			89.5
Performance-vested restricted stock units		(0.3	)		0.1			3.0			0.8
Restricted stock awards		—			—			—			0.6
Employee stock purchase plan		3.2			3.0			5.2			4.6

Subtotal	$	42.8		$	38.5		$	124.7		$	109.8
Capitalized share-based payment costs		(1.7	)		(1.8	)		(4.8	)		(5.5	)

Share-based compensation expense included in total costs and expenses	$	41.1		$	36.7		$	119.9		$	104.3

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. A summary of stock options granted during the three and nine months ended September 30, 2009 and 2008 is as follows:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2009

2008

2009

2008

Weighted

Average

Number

Exercise

Number

Exercise

Number

Exercise

Number

Exercise

(In millions, except share price)

Granted(a)

Price

Granted

Price

Granted

Price

Granted

Price

Stock Options

—

47.96

0.1

65.70

1.0

50.02

1.4

60.89


(a)	Approximately 14,000 stock options were granted during the quarter ended September 30, 2009.

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. A summary of RSU activity for the three and nine months ended September 30, 2009 and 2008 is as follows:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2009

2008

2009

2008

Weighted

Average

Number

Grant Date

Number

Grant Date

Number

Grant Date

Number

Grant Date

(In millions, except share price)

Granted

Fair Value

Granted

Fair Value

Granted

Fair Value

Granted

Fair Value

Time-Vested

Restricted Stock Units

0.1

48.42

0.2

51.87

2.5

49.35

2.8

60.04

Performance-Vested Restricted Stock Units

2009 Grant Activity

We apply a graded vesting expense methodology when accounting for the performance-vested restricted stock units, or PVRSUs, issued during 2009 in accordance with generally accepted accounting principles for share-based compensation. During the nine months ended September 30, 2009, approximately 321,000 PVRSUs were granted with a weighted average grant date fair value of $49.46 per share. Approximately 307,000 of these PVRSUs were granted during the first quarter of 2009, primarily in connection with our annual awards made in February; the remainder of the PVRSUs granted during the nine months ended September 30, 2009 were made in conjunction with promotions and new hires.

The number of PVRSUs reflected as granted represents the target number of shares that 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. Participants may ultimately earn up to 200% of the target number of shares granted in the event that the maximum performance thresholds are attained. Accordingly, additional PVRSUs may be issued upon final determination of the number of awards earned.

Once the earned number of performance-vested awards has 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 is also subject to the respective employees’ continued employment. 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.

2007 Grant Activity

During 2007, our Board of Directors awarded a total of 120,000 PVRSUs to Dr. Cecil Pickett, our former President, Research and Development. Vesting of these PVRSUs was 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, and Dr. Pickett’s continued employment through the end of the respective performance periods. In February 2008, a total of 27,000 shares were issued based upon the attainment of performance criteria set for 2007. An additional 30,000 shares were issued in February 2009 based on the attainment of performance criteria set for 2008. No additional shares were issued to Dr. Pickett during the three and nine months ended September 30, 2009 and 2008, respectively. Dr. Pickett retired from the position of President, Research and Development effective October 5, 2009. Accordingly, no additional PVRSUs awarded to Dr. Pickett will vest or be issued. Expense previously recognized in relation to unvested awards was reversed during the current quarter.

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.

The table below provides a summary of shares issued under our ESPP for the three and nine months ended September 30, 2009 and 2008, respectively:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2009

2008

2009

2008

(In millions)

Shares Issued

Employee Stock Purchase Plan

0.1

0.4

Income Taxes

9 Months Ended

Sep. 30, 2009

Income Taxes [Abstract]

Income Taxes


12.	Income Taxes

The following table provides a comparative summary of our effective tax rates and income tax expense for the three and nine months ended September 30, 2009 and 2008, respectively:


	For the Three Months Ended September 30,									For the Nine Months Ended September 30,
(In millions, except percentages)	2009			2008			Change %			2009			2008			Change %

Effective tax rate		29.0	%		35.5	%		(18.3	)%		28.8	%		32.7	%		(11.9	)%
Income tax expense	$	113.9		$	114.3			(0.3	)%	$	271.9		$	282.3			(3.7	)%

Our effective tax rate will fluctuate from period to period due to several factors inherent in the nature of our global operations and business transactions. The factors that most significantly impact our tax rate include the variability of the proportion of our taxable earnings in multiple jurisdictions, changes in tax laws and acquisition and licensing transactions.

Our effective tax rate for the three and nine months ended September 30, 2009 was favorably impacted by certain adjustments to our transfer pricing and other estimates made in conjunction with the filing of our income tax returns during the current quarter. These adjustments had a favorable impact of 1.9% and 0.8% on our tax rate for the three and nine months ended September 30, 2009, respectively. In addition, our tax rate for the nine months ended September 30, 2009, was also favorably impacted by changes in the tax laws of certain states in which we operate. These tax law changes required us to establish deferred tax assets for certain tax credits and adjust certain deferred tax liabilities and reserves for uncertain tax positions resulting in a favorable impact of 3.2% on our effective tax rate for the nine months ended September 30, 2009. As these tax law changes became effective during the first quarter of 2009, these changes did not have an impact on our effective tax rate for the three months ended September 30, 2009.

The favorable impact of these items on our effective tax rate for the nine months ended September 30, 2009 was offset by the impact of the collaboration and license agreement entered into with Acorda Therapeutics, Inc., or Acorda, on June 30, 2009. As there is no income tax benefit associated with the $110.0 million July 1, 2009 upfront payment made to Acorda and other registrational costs of Fampridine-SR, these payments had a 2.4% and 2.3% unfavorable impact on our effective tax rate for the three and nine months ended September 30, 2009, respectively. Refer to Note 14, Collaborations, of this Form 10-Q for additional information related to the Acorda transaction.

In connection with the acquisition of Syntonix Pharmaceuticals, or Syntonix, in January 2007, we agreed to make additional future consideration payments contingent upon the achievement of certain milestone events. In accordance with the acquisition agreement, we expect to make a $40.0 million milestone payment to the former shareholders of Syntonix in the fourth quarter of 2009. This amount will be recorded as a charge to IPR&D when the related milestone has been achieved. This payment was anticipated in determining our full year effective tax rate. As this amount is not deductible for United States income tax purposes, our 2009 effective tax rate would be favorably impacted in the event that the achievement of these milestones is not met or is delayed beyond the fourth quarter of 2009.

Our effective tax rate for the nine months ended September 30, 2008 was favorably impacted by the restructuring of our operations in foreign jurisdictions as well as other activities and adjustments made.

Reconciliation between the U.S. federal statutory tax rate and our effective tax rate for the three and nine months ended September 30, 2009 and 2008 is as follows:


	For the						For the
	Three Months						Nine Months
	Ended						Ended
	September 30,						September 30,
	2009			2008			2009			2008

Statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
State taxes		2.2			4.4			1.6			3.0
Taxes on foreign earnings		(7.7	)		(7.4	)		(5.8	)		(9.0	)
Credits and net operating loss utilization		(1.5	)		1.1			(4.1	)		0.1
Fair value adjustment		0.9			3.8			2.0			3.6
IPR&D		0.9			—			1.1			1.0
Permanent items		(1.0	)		(0.9	)		(1.5	)		(0.8	)
Other		0.2			(0.5	)		0.5			(0.2	)

Effective tax rate		29.0	%		35.5	%		28.8	%		32.7	%

On September 12, 2006, we received a Notice of Assessment from the Massachusetts Department of Revenue for $38.9 million, including penalties and interest, with respect to the 2002 tax year. Subsequently, we filed a petition with the Massachusetts Appellate Tax Board, seeking among other items, abatements of corporate excise tax for the 2001, 2002 and 2003 tax years. We believe that we have meritorious defenses to the proposed adjustment and are vigorously opposing the assessment. We believe that the assessment does not impact the level of liabilities for income tax contingencies. However, there is a possibility that we may not prevail in all of our assertions. If this is resolved unfavorably in the future, it could have a material impact on our results of operations in the period the resolution occurs. We are subject to examinations by the Massachusetts Department of Revenue for additional tax years and, therefore, may be assessed for a similar proposed adjustment to those additional tax years. Refer to Note 15, Litigation, of this Form 10-Q for additional information.

We file income tax returns in the United States federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2001. During the second quarter of 2007, the Internal Revenue Service, or IRS, completed its examination of our consolidated federal income tax returns for the fiscal years 2003 and 2004 and issued an assessment. During the first quarter of 2009 the IRS completed an examination of our consolidated federal income tax returns for fiscal years 2005 and 2006 and issued an assessment. Our level of liabilities for income tax contingencies approximate the assessment amounts for items agreed to with the IRS; we are appealing several other items. If these items are resolved unfavorably in the future, the outcome could have an adverse impact on our results of operations in the period the resolution occurs.

Collaborations

9 Months Ended

Sep. 30, 2009

Collaborations [Abstract]

Collaborations


14.	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.

Effective January 1, 2009, we adopted a newly issued accounting standard for the accounting and disclosure of an entity’s collaborative arrangements. This newly issued standard 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 this guidance, we must also evaluate our collaborative agreements for proper income statement classification based on the nature of the underlying activity. 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 reporting revenue as a principal versus net as an agent as required by the Revenue Recognition Topic of the Codification) we record revenue and the corresponding operating costs in their respective line items within our consolidated statements of income. If we are not the principal, we record operating costs as a reduction of revenue. The guidance 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 this newly issued accounting standard 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, a member of the Roche Group, 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. Hoffmann-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 United 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:


	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
(In millions)	2009		2008		2009		2008

Biogen Idec Inc.’s share of co-promotion profits in the United States	$	203.3	$	192.2	$	581.3	$	527.9
Reimbursement of selling and development expenses in the United States		15.8		16.8		47.5		45.4
Revenue on sales of RITUXAN outside the United States		64.8		90.0		209.5		251.7

Total unconsolidated joint business	$	283.9	$	299.0	$	838.3	$	825.0

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
	Inc.’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. 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
		Inc.’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%.

We will participate in Third Party Anti-CD20 Products on similar financial terms as for ocrelizumab.

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 statements 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 $14.7 million and $47.3 million in development expense related to New Anti-CD20 products for the three and nine months ended September 30, 2009, respectively, as compared to $9.0 million and $31.6 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 September 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 statements 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, 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 United 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 consolidated statements of income when they are incurred. Research and development and sales and marketing expenses are shared equally with Elan and the reimbursement of these expenses is recorded as reductions of the respective expense categories. During the three and nine months ended September 30, 2009, we recorded $5.2 million and $16.6 million, respectively, as reductions of research and development expense for reimbursements from Elan as compared to $4.0 million and $17.8 million, respectively, of research and development expense recorded for reimbursement from Elan during the prior year comparative periods. In addition, for the three and nine months ended September 30, 2009, we recorded $14.7 million and $46.9 million, respectively, as reductions of selling, general and administrative expense for reimbursements from Elan as compared to $9.3 million and $26.8 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 also include the reimbursement for 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 statements of income. For the three and nine months ended September 30, 2009, $60.7 million and $152.6 million, respectively, was reflected in the collaboration profit sharing line for our collaboration with Elan, as compared to $43.5 million and $98.4 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. The $110.0 million upfront payment made on July 1, 2009 was recorded as research and development expense during the second quarter 2009 as the product candidate has not received regulatory approval.

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. We may incur additional milestone payments of up to $400.0 million 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. We 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 7% of the upfront and milestone payments that Acorda receives from us.

A summary of activity related to this collaboration for the three and nine months ended September 30, 2009 and 2008, respectively, is as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In millions)	2009		2008		2009		2008

Upfront payments made to Acorda	$	—	$	—	$	110.0	$	—
Total expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	0.5	$	—	$	0.5	$	—
Total expense reflected within our consolidated statements of income	$	0.5	$	—	$	110.5	$	—

A summary of activity related to this collaboration since inception, along with an estimate of additional future development expense expected to be incurred by us, is as follows:


	As of
	September 30,
(In millions)	2009

Total upfront and milestone payments made to Acorda	$	110.0
Total expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	0.5
Estimate of additional expense to be incurred by us in development of Fampridine-SR	$	10.0

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. Neurimmune will conduct research to identify potential therapeutic antibodies and we will be responsible for the development, manufacturing and commercialization of all products. We may pay Neurimmune up to $360.0 million in remaining milestone payments, as well as royalties on sales of any resulting commercial products. Milestone payments are reflected within our consolidated statements of income when achieved. The royalty term 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.

We have determined that we are the primary beneficiary of Neurimmune in accordance with the guidance provided by the Consolidation Topic of the Codification. 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 reimburse Neurimmune for all research and development costs incurred in support of the collaboration. These amounts are also reflected in research and development expense in our statements of income. A summary of activity related to this collaboration for the three and nine months ended September 30, 2009 and 2008, respectively, is as follows:


	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
(In millions)	2009		2008		2009		2008

Total upfront and milestone payments made to Neurimmune	$	—	$	2.5	$	7.5	$	10.5
Total expense incurred by Neurimmune in support of the collaboration	$	1.9	$	1.3	$	5.5	$	4.5
Total expense reflected within our consolidated statements of income	$	1.9	$	3.8	$	13.0	$	15.0

A summary of activity related to this collaboration since inception, along with an estimate of additional future development expense expected to be incurred by us, is as follows:


	As of
	September 30,
(In millions)	2009

Total upfront and milestone payments made to Neurimumune	$	20.0
Total development expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	12.0
Estimate of additional expense to be incurred by us in development of the lead compound	$	440.0

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, we may pay up to $150.0 million in remaining development milestone payments as well as royalties on commercial sales.

We have determined that we are the primary beneficiary of Cardiokine in accordance with the guidance provided by the Consolidation Topic of the Codification. 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 incurred in support of the collaboration. A summary of activity related to this collaboration for the three and nine months ended September 30, 2009 and 2008, respectively, is as follows:


	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
(In millions)	2009		2008		2009		2008

Total upfront and milestone payments made to Cardiokine	$	20.0		—	$	20.0		—
Total expense incurred by the collaboration	$	17.2	$	15.3	$	48.5	$	38.9
Biogen Idec Inc.’s share of expense reflected within our consolidated statements of income	$	35.5	$	13.8	$	63.7	$	35.0
Collaboration expense allocated to noncontrolling interests, net of tax	$	1.7	$	1.5	$	4.8	$	3.9

A summary of activity related to this collaboration since inception, along with an estimate of additional future development expense expected to be incurred by us, is as follows:


	As of
	September 30,
(In millions)	2009

Total upfront and milestone payments made to Cardiokine	$	70.0
Total development expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	106.8
Estimate of additional expense to be incurred by us in development of the Lixivaptan (all indications)	$	430.0

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 costs are shared equally. We have commercial rights to North America and Biovitrum has commercial rights to Europe. Each party shares in the other’s net sales based on a royalty percentage of up to 33.3%. All other territories are to be managed by a third party with us and Biovitrum sharing equally in all royalties, license fees and other revenues arising from arrangements with third party licenses and distributors.

Amounts incurred by us in the development of the Factor XIII and Factor IX are reflected as research and development expense in our consolidated statements of income, reduced by amounts due from Biovitrum. A summary of collective activity related to the Factor VIII and Factor IX programs for the three and nine months ended September 30, 2009 and 2008, respectively, is as follows:


	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
(In millions)	2009		2008		2009		2008

Total expense incurred by the collaboration	$	6.8	$	8.4	$	33.2	$	26.9
Biogen Idec Inc.’s share of expense reflected within our consolidated statements of income	$	3.4	$	4.2	$	16.6	$	13.5

A summary of activity related to this collaboration since inception, along with an estimate of additional future development expense expected to be incurred by us, is as follows:


	As of
	September 30,
(In millions)	2009

Total upfront and milestone payments received from Biovitrum	$	4.0
Total development expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	44.8
Estimate of additional expense to be incurred by the collaboration in development of Factors XIII and IX	$	95.0

Under the agreement, Biovitrum may pay us an additional $19.0 million in milestone payments.

Mondo

We have an 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 milestone 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, and 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. Expenses incurred by the collaboration are reflected in research and development expense in our consolidated statements of income.

A summary of activity related to this collaboration for the three and nine months ended September 30, 2009 and 2008, respectively, is as follows:


	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
(In millions)	2009		2008		2009		2008

Total expense incurred by the collaboration	$	4.0	$	2.7	$	10.9	$	11.7
Total expense reflected within our consolidated statements of income	$	4.0	$	2.7	$	10.9	$	11.7

A summary of activity related to this collaboration since inception, along with an estimate of additional future development expense expected to be incurred by us, is as follows:


	As of
	September 30,
(In millions)	2009

Total upfront and milestone payments made to Mondo	$	7.5
Total development expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	40.8

UCB

In June 2009, UCB, S.A., or UCB, and we announced the discontinuation of the Phase 2 clinical trial for this collaboration’s only product candidate due to the absence of clinically relevant efficacy. Since the inception of our collaboration agreement with UCB, we have incurred a total of $98.0 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.

A summary of activity related to this collaboration for the three and nine months ended September 30, 2009 and 2008, respectively, is as follows:


	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
(In millions)	2009		2008		2009		2008

Total expense incurred by the collaboration	$	5.3	$	7.2	$	27.7	$	23.7
Biogen Idec Inc.’s share of expense reflected within our consolidated statements of income	$	3.7	$	5.0	$	18.0	$	15.3

A summary of activity related to this collaboration since inception, along with an estimate of additional future development expense expected to be incurred by us, is as follows:


	As of
	September 30,
(In millions)	2009

Total upfront and milestone payments made to UCB	$	30.0
Total development expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	68.0
Estimate of additional expense to be incurred by us in development of the compound in this indication	$	4.5

Facet Biotech

We have a collaboration agreement with 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.

A summary of activity related to this collaboration for the three and nine months ended September 30, 2009 and 2008, respectively, is as follows:


	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
(In millions)	2009		2008		2009		2008

Total expense incurred by the collaboration	$	10.6	$	13.3	$	28.3	$	52.9
Biogen Idec Inc.’s share of expense reflected within our consolidated statements of income	$	5.3	$	6.7	$	14.2	$	26.4

A summary of activity related to this collaboration since inception, along with an estimate of additional future development expense expected to be incurred by us, is as follows:


	As of
	September 30,
(In millions)	2009

Total upfront and milestone payments made to Facet	$	50.0
Total development expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	115.1
Estimate of additional expense to be incurred by us in development of current indications of daclizumab and volociximab	$	500.0

On September 21, 2009, we commenced a tender offer to acquire all of the outstanding shares of Facet for approximately $356.0 million or $14.50 per share in cash. On October 16, 2009, we extended the offer to December 16, 2009 at the same offering price of $14.50 per share. Our all-cash proposal is not subject to any financing contingency or approval by Biogen Idec shareholders. We may incur additional costs to complete this transaction in the event that this tender offer is successfully completed. We do not expect these additional transaction costs to be material to our financial position or results of operations.

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.

A summary of activity related to this collaboration for the three and nine months ended September 30, 2009 and 2008, respectively, is as follows:


	For the Three				For the Nine
	Months Ended				Months Ended
	September 30,				September 30,
(In millions)	2009		2008		2009		2008

Total expense incurred by the collaboration and reflected within our consolidated statements of income	$	3.3	$	4.4	$	10.4	$	13.2

A summary of activity related to this collaboration since inception, along with an estimate of additional future development expense expected to be incurred by us, is as follows:


	As of
	September 30,
(In millions)	2009

Total upfront and milestone payments made to Vernalis	$	13.0
Total development expense incurred by Biogen Idec Inc., excluding upfront and milestone payments	$	65.3
Estimate of additional expense to be incurred by us in development of the compound in this indication	$	230.0

Litigation

9 Months Ended

Sep. 30, 2009

Litigation [Abstract]

Litigation


15.	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 September 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 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.

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. On May 22, 2009, the United States Court of Appeals for the Federal Circuit granted Genentech’s and our petition for a writ of mandamus transferring the Texas Action to the federal court in California, and denied Sanofi’s petition for rehearing on August 10, 2009. 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

9 Months Ended

Sep. 30, 2009

New Accounting Pronouncements [Abstract]

New Accounting Pronouncements


17.	New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company’s management believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption.

Recently Issued Accounting Standards

In August 2009, the FASB issued Accounting Standards Update No. 2009-05, Measuring Liabilities at Fair Value, or ASU 2009-05. ASU 2009-05 amends Accounting Standards Codification Topic 820, Fair Value Measurements. Specifically, ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following methods: 1) a valuation technique that uses a) the quoted price of the identical liability when traded as an asset or b) quoted prices for similar liabilities or similar liabilities when traded as assets and/or 2) a valuation technique that is consistent with the principles of Topic 820 of the Accounting Standards Codification (e.g. an income approach or market approach). ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to adjust to include inputs relating to the existence of transfer restrictions on that liability. The adoption of this standard did not have an impact on our financial position or results of operations; however, this standard may impact us in future periods.

In September 2009, the FASB issued ASU No. 2009-12, Fair Value Measurements and Disclosure, or ASU 2009-12. This standard provides additional guidance on using the net asset value per share, provided by an investee, when estimating the fair value of an alternate investment that does not have a readily determinable fair value and enhances the disclosures concerning these investments. Examples of alternate investments, within the scope of this standard, include investments in hedge funds and private equity, real estate, and venture capital partnerships. This Standard is effective for interim and annual periods ending after December 15, 2009. At of September 30, 2009, our only investments falling within the scope of this Standard are our venture capital investments. For these investments we use the net asset value to assess fair value. Refer to Note 5, Fair Value Measurements, of this Form 10-Q for additional disclosure related to our venture capital investments. We are currently evaluating the potential impact of this standard on our financial position and results of operations.

In October 2009, the FASB issued ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements, or ASU 2009-13. ASU 2009-13, amends existing revenue recognition accounting pronouncements that are currently within the scope of FASB Accounting Standards Codification, or ASC, Subtopic 605-25 (previously included within EITF 00-21, Revenue Arrangements with Multiple Deliverables, or EITF 00-21). The consensus to EITF Issue No. 08-01, Revenue Arrangements with Multiple Deliverables, or EITF 08-01, provides accounting principles and application guidance on whether multiple deliverables exist, how the arrangement should be separated, and the consideration allocated. This guidance eliminates the requirement to establish the fair value of undelivered products and services and instead provides for separate revenue recognition based upon management’s estimate of the selling price for an undelivered item when there is no other means to determine the fair value of that undelivered item. EITF 00-21 previously required that the fair value of the undelivered item be the price of the item either sold in a separate transaction between unrelated third parties or the price charged for each item when the item is sold separately by the vendor. This was difficult to determine when the product was not individually sold because of its unique features. Under EITF 00-21, if the fair value of all of the elements in the arrangement was not determinable, then revenue was deferred until all of the items were delivered or fair value was determined. This new approach is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We are currently evaluating the potential impact of this standard on our financial position and results of operations.

Other Recently Issued Accounting Standards

In June 2009, the FASB issued the following two new accounting standards, which have not yet been integrated into the Codification. Accordingly, these accounting standards will remain authoritative until integrated:


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

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

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, this standard amends previously issued accounting guidance, modifies the financial-components approach and removes the concept of a qualifying special purpose entity when accounting for transfers and servicing of financial assets and extinguishments of liabilities, and removes the exception from applying the general accounting principles for the consolidation of variable interest entities that are qualifying special-purpose entities. This new accounting standard is effective for transfers 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.

SFAS 167 amends previously issued accounting guidance for the consolidation of variable interest entities to require an enterprise to determine whether its variable interest or interests give it a controlling financial interest in a variable interest entity. This amended consolidation guidance for variable interest entities also replaces the existing quantitative approach for identifying which enterprise should consolidate a variable interest entity, which was based on which enterprise is exposed to a majority of the risks and rewards, with a qualitative approach, based on which enterprise has both (1) the power to direct the economically significant activities of the entity 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. This new standard has broad implications and may affect how we account for the consolidation of common structures, such as joint ventures, equity method investments, collaboration and other agreements and purchase arrangements. Under this revised guidance, more entities may meet the definition of a variable interest entity, and the determination about who should consolidate a variable interest entity is required to be evaluated continuously. We are evaluating all entities that fall within the scope of the amended guidance to determine whether we may be required to consolidate additional entities or deconsolidate existing consolidated entities on January 1, 2010, which is the effective date of SFAS 167; however we have not yet completed our implementation analysis. Accordingly, we have not determined the effect that the adoption of this standard will have on our financial position or results of operation.

Recently Adopted Accounting Standards

Effective January 1, 2009, we adopted a newly issued accounting standard for business combinations. 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. Due to the fact that this guidance is applicable to acquisitions completed after January 1, 2009 and we did not have any business combinations in the first nine months of 2009, the adoption did not impact our financial position or results of operations. The standard also amended accounting for uncertainty in income taxes as required by the Income Tax Topic of the Codification. Previously, accounting standards 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. This new standard 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 this guidance, will be recognized in current period income tax expense.

In April, 2009, the FASB issued a new accounting standard providing guidance for the accounting of assets acquired and liabilities assumed in a business combination that arise from contingencies, This guidance amends and clarifies previous accounting standards 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 this guidance is applicable to acquisitions completed after January 1, 2009 and we did not have any business combinations in the first nine months of 2009, the adoption did not impact our financial position or results of operations.

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 with guidance issued by the FASB during 2009 related to the measurement of assets and liabilities assumed at fair value as of the acquisition date and the reporting of amounts associated with noncontrolling interests. This bulletin did not impact our financial position or results of operations; however, the adoption of this new accounting resulted in the reclassification of certain prior period amounts related to noncontrolling interests to conform to the current financial statement presentation.

In April 2009, the Securities and Exchange Commission, or SEC, issued Staff Accounting Bulletin No. 111 which aligns SEC regulations to the accounting standards issued by the FASB during 2009 on accounting for other-than-temporary impairments for marketable debt securities. Specifically, it amends Topic 5.M., Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities, 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 the Investments — Debt and Equity Securities Topic of the Codification. Refer to Note 1, Business Overview, Note 9, Equity, and Note 13, Other Income (Expense), Net, of this Form 10-Q for additional information on the adoption of the new accounting standard for noncontrolling interests.

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