Biogen Inc.
04/29/2026 | Press release | Distributed by Public on 04/29/2026 04:41
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements (condensed consolidated financial statements) and the accompanying notes beginning on page 8 of this quarterly report on Form 10-Q and our audited consolidated financial statements and the accompanying notes included in our 2025 Form 10-K.
EXECUTIVE SUMMARY
INTRODUCTION
Biogen is a global biopharmaceutical company focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases. We have a broad portfolio of medicines to treat MS, have introduced the first approved treatment for SMA, co-developed treatments to address a defining pathology of Alzheimer's disease and launched the first approved treatment to target a genetic cause of ALS. We market the first and only drug approved in the U.S., the E.U. and certain international markets for the treatment of FA in adults and adolescents aged 16 years and older. We are focused on advancing our pipeline in neurology, specialized immunology and rare diseases. We support our drug discovery and development efforts through internal research and development programs, external collaborations and acquisitions.
Our marketed products include VUMERITY, TYSABRI, TECFIDERA, AVONEX and PLEGRIDY for the treatment of MS; SPINRAZA for the treatment of SMA; SKYCLARYS for the treatment of FA; and QALSODY for the treatment of ALS.
We also have collaborations with Eisai on the commercialization of LEQEMBI for the treatment of Alzheimer's disease and Supernus on the commercialization of ZURZUVAE for the treatment of PPD. We have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, CLL and other conditions; RITUXAN HYCELA for the treatment of non-Hodgkin's lymphoma and CLL; GAZYVA for the treatment of CLL, follicular lymphoma and lupus nephritis; OCREVUS for the treatment of PPMS and RMS; LUNSUMIO for the treatment of relapsed or refractory follicular lymphoma; COLUMVI, a bispecific antibody for the treatment of non-Hodgkin's lymphoma; and have the option to add other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, a wholly owned member of the Roche Group.
We commercialize a portfolio of biosimilars of advanced biologics including: BENEPALI, an etanercept biosimilar referencing ENBREL; IMRALDI, an adalimumab biosimilar referencing HUMIRA; and FLIXABI, an infliximab biosimilar referencing REMICADE.
For additional information on our collaboration arrangements, please read Note 18, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report.
We seek to ensure an uninterrupted supply of medicines to patients around the world. To that end, we regularly review our manufacturing capacity, capabilities, processes and facilities. In order to support our future growth and drug development pipeline, we expanded our large molecule production capacity and built a large-scale biologics manufacturing facility in Solothurn, Switzerland. The Solothurn facility is operational and has been approved for the manufacture of LEQEMBI and TYSABRI. We believe that the Solothurn facility will support our anticipated near to mid-term needs for the manufacturing of biologic assets. The plant represents a significant increase in our overall manufacturing capacity. Additionally, we continue to invest to modernize, automate and support the capacity requirements for our pipeline and existing products at our existing manufacturing facilities in RTP, North Carolina. If we are unable to fully utilize our manufacturing facilities, we will incur additional excess capacity charges which would have a negative effect on our financial condition and results of operations.
In the longer term, our revenue growth will depend upon the successful clinical development, regulatory approval and launch of new commercial products as well as additional indications for our existing products, our ability to obtain and maintain patents and other rights related to our marketed products, assets originating from our research and development efforts and/or successful execution of external business development opportunities.
BUSINESS ENVIRONMENT
The biopharmaceutical industry and the markets in which we operate are intensely competitive. Many of our competitors are working to develop or have commercialized products similar to those we market. In addition, the commercialization of certain of our own approved products, products of our collaborators and pipeline product candidates may negatively impact future sales of our existing products.
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Our products and revenue streams continue to face increasing competition in many markets from the introduction of new originator therapies, generics, biosimilars of existing products and products approved under abbreviated regulatory pathways. Some of these products are likely to be sold at substantially lower prices than branded products. Accordingly, the introduction of such products as well as other lower-priced competing products has significantly reduced, and in the future may significantly reduce, both the price that we are able to charge for our products and the volume of products we sell, which can negatively impact our revenue. In addition, in some markets, when a generic or biosimilar version of one of our products is commercialized, it may be automatically substituted for our product and significantly reduce our revenue in a short period of time.
Sales of our products depend, to a significant extent, on the availability and extent of adequate coverage, pricing and reimbursement from government health administration authorities, private health insurers and other organizations. When a new pharmaceutical product is approved, the availability of government and private reimbursement for that product may be uncertain, as is the pricing and the amount for which that product will be reimbursed.
Drug prices are under significant scrutiny in the markets in which our products are prescribed; for example the IRA has certain provisions related to drug pricing, including the ability for the U.S. government to set prices for certain drugs in Medicare. We expect drug pricing and other healthcare costs will continue to be subject to political and societal pressures on a global basis. As the policy environment remains dynamic, we will continue to monitor how uncertainty with respect to how the U.S. and foreign tariffs and the U.S. and international pricing may impact our business in the future.
Additionally, our ability to set the price for our products varies significantly from country to country and, as a result, so can the price or reimbursement of our products. Governments may use a variety of cost-containment measures to control the cost of medicines, including price cuts, mandatory rebates, value-based pricing and reference pricing (i.e., referencing prices in other countries and using those reference prices to set a price).
Our failure to obtain or maintain adequate coverage, pricing or reimbursement for our products could have an adverse effect on our business, reputation, revenue and results of operations, could curtail or eliminate our ability to adequately fund research and development programs for the discovery and commercialization of new products and/or could cause a decline or volatility in our stock price.
In addition to the impact of competition, pricing actions and other measures being taken worldwide designed to reduce healthcare costs and limit the overall level of government expenditures, our sales and operations could also be affected by other risks of doing business internationally, including the impact of public health epidemics on employees, the global economy and the delivery of healthcare treatments, geopolitical events, tariffs, supply chain disruptions, foreign currency exchange fluctuations, changes in intellectual property legal protections and changes in trade regulations and procedures.
For a detailed discussion on our business environment, please read Item 1. Business, in our 2025 Form 10-K. For additional information on our competition and pricing risks that could negatively impact our product sales, please read Item 1A. Risk Factors included in this report.
TECFIDERA
Multiple TECFIDERA generic entrants are now in North America, Brazil and the E.U. and have deeply discounted prices compared to TECFIDERA. The generic competition for TECFIDERA has significantly reduced our TECFIDERA revenue and we expect that TECFIDERA revenue will continue to decline. In November 2025 the Technical Boards of Appeal of the European Patent Office revoked our EP 2 653 873 patent related to TECFIDERA, after which we stopped enforcing this patent and its national counterparts.
For additional information, please read Note 20, Litigation, to our condensed consolidated financial statements included in this report.
TYSABRI
A biosimilar entrant of TYSABRI was approved in the U.S. and the E.U. in 2023. We expect the future sales of TYSABRI will continue to be adversely affected by the entrance of this biosimilar.
BUSINESS UPDATE REGARDING MACROECONOMIC CONDITIONS AND OTHER POTENTIAL DISRUPTIONS
Significant portions of our business are conducted in Europe, Asia and other international geographies. Factors such as global health outbreaks, adverse weather events, geopolitical events or conflicts, tariffs, inflation, labor or raw
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material shortages and other supply chain disruptions could result in product shortages or other difficulties and delays or increased costs in manufacturing or distributing our products.
Economic conditions remain uncertain as markets continue to be impacted in part by continued inflationary pressures, higher interest rates, extreme weather events, global supply chain uncertainties and risks associated with geopolitical conflicts. Global supply chain disruptions, such as strikes, work stoppages, port congestion, port closures, trade restrictions, capacity constraints and other logistical problems, may affect our ability to do business.
INTERNATIONAL TRADE
Global conflicts or disputes and interruptions in international relationships, including tariffs, trade protection measures, economic embargoes, import or export licensing requirements and the imposition of trade sanctions or similar restrictions, may affect our ability to do business and the costs that we incur in providing products to our patients.
In 2025 the U.S. imposed a series of tariffs on imports from nearly all countries, including tariffs pursuant to the IEEPA subject to certain exemptions. Trade-related tensions between the U.S. and China have also led to a series of tariffs and sanctions being imposed by the U.S. on imports from China and retaliatory tariffs imposed by China on U.S. imports, subject as well to exemptions.
Furthermore, in 2025, the U.S. reached a series of Framework Agreements with some countries and trading blocs including the E.U., Switzerland, the U.K., Japan and South Korea, carving U.S. tariff rates for certain import categories between 10.0% and 15.0%.
In February 2026 the U.S. Supreme Court issued a ruling striking down tariffs previously imposed under the IEEPA. The ultimate availability, timing and amount of any potential refunds of such tariffs remain highly uncertain and could be subject to further legal, regulatory and administrative developments. The amount of IEEPA tariff refunds, if any, that we ultimately recover may differ from the full amount we previously paid. Furthermore, any potential refunds or recoveries may be offset by refunds due to customers for payments made in connection with the IEEPA tariffs. As of this filing date, we have not recorded a receivable for any refund of IEEPA tariffs.
Following the Supreme Court's decision, the U.S. Administration announced its intention to impose other tariffs under different authorities and introduced new tariffs on imports from nearly all countries, imposing a 10.0% baseline tariff in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels and whether further additional tariffs or other retaliatory actions may be imposed, modified or suspended, and the impacts of such actions on our business.
The U.S. Secretary of Commerce previously initiated an investigation to determine the effects on the national security of imports of pharmaceuticals and pharmaceutical ingredients, including finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, key starting materials and derivative products of those items, under Section 232 of the Trade Expansion Act of 1962. In April 2026 after the investigation concluded, the U.S. Administration issued a Proclamation imposing a 100% tariff on imports of patented pharmaceuticals, biologics and associated ingredients, subject to certain exemptions and reduced rates. The Proclamation tariffs are effective on September 29, 2026.
There is a high degree of uncertainty concerning what future steps countries and economic blocs will take in response to changes in global trade rules and economics.
We have a significant manufacturing presence in the U.S. While our portfolio is evolving, approximately three quarters of our 2025 U.S. product revenue was attributable to products that were largely manufactured in the U.S. However, we, and the biopharmaceutical industry, do utilize partners and production facilities located outside the U.S. for certain raw materials, ingredients, processes and components for our products and their delivery technologies. Engaging alternative suppliers may involve seeking additional regulatory approvals and incurring additional costs and risks associated with new suppliers. This may be costly in terms of time and resources needed or result in delays.
Key products that are currently manufactured primarily outside the U.S. are TECFIDERA, VUMERITY and LEQEMBI. In 2024 we initiated a technology transfer process to enable us to manufacture LEQEMBI in the U.S., which was approved in January 2026.
Although certain starting materials for SKYCLARYS rely on a single supplier based in China, the manufacturing process, including active pharmaceutical ingredients and drug substance, is primarily conducted in the U.S.
We are working to mitigate potential exposure from tariffs across our network, and as of the date of this filing, we do not expect the tariffs currently applicable to our business to result in a material adverse effect on our operations in
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2026. This is based on existing tariffs in place or potential tariffs as previously announced by the U.S. Administration, our manufacturing footprint and our inventory levels and market positioning. Should additional tariffs be enacted, our business could be impacted in the future and our results and operations could differ materially from our current expectations. We will continue to monitor the current and future global tariff landscape as it evolves.
GEOPOLITICAL TENSIONS
The ongoing geopolitical tensions related to Russia's invasion of Ukraine and the military conflict in the Middle East and other global geopolitical developments have resulted in global business disruptions and economic volatility. For example, sanctions and other restrictions have been levied on the government and businesses in Russia. Although we do not have affiliates or employees in either Russia or Ukraine, we do provide various therapies to patients in Russia through a distributor. Government sanctions on the export of certain manufacturing materials to Russia may delay or limit our ability to get new products approved. The impact of the conflict on our operations and financial performance remains uncertain and will depend on future developments, including the severity and duration of the conflict between Russia and Ukraine, its impact on regional and global economic conditions and whether the conflict spreads or has effects on countries outside Ukraine and Russia.
We are closely monitoring ongoing geopolitical tensions in the Middle East, including the recent conflict involving the U.S., Israel and Iran, and the related regional instability. The ongoing geopolitical conflicts in the region could lead to significant disruption of fuel and energy supplies and increases in global fuel prices, which could heighten inflationary pressures, disrupt global supply chains and adversely impact the availability and pricing of raw materials. For example, our primary shipping method for resources and finished goods is through air freight. We will continue to evaluate and take actions to mitigate any potential impacts on our business, results of operations and financial condition. Although the long-term effects remain uncertain, this geopolitical conflict did not have any material effects on our results of operations for the three months ended March 31, 2026.
We will continue to monitor the ongoing conflict between Russia and Ukraine as well as the military conflict in the Middle East and other global geopolitical developments and assess any potential impacts on our business, supply chain, partners or customers, as well as any factors that could have an adverse effect on our results of operations. Revenue generated from sales in Russia and Ukraine represent less than 2.0% of total revenue for the three months ended March 31, 2026 and 2025. Additionally, revenue generated from sales in the broader Middle East region represents less than 3.0% of total revenue for the three months ended March 31, 2026 and 2025.
FACTORS AFFECTING PHARMACEUTICAL PRICING AND OTHER DEVELOPMENTS
In August 2022 the IRA was signed into law in the U.S. The IRA introduced new tax provisions, including a 15.0% corporate alternative minimum tax and a 1.0% excise tax on stock repurchases. The provisions of the IRA are effective for periods after December 31, 2022. The IRA did not result in any material adjustments to our income tax provision or other income tax balances as of March 31, 2026 and December 31, 2025. Preliminary guidance has been issued by the IRS and we expect additional guidance and regulations to be issued in future periods. We continue to assess its potential impact on our business and results of operations as further information becomes available.
The IRA also contains substantial drug pricing reforms that may have a significant impact on the pharmaceutical industry in the U.S. This includes the following:
(i) allowing CMS to negotiate prices for select high-cost Medicare Part D drugs (beginning in 2026) and Part B drugs (beginning in 2028) to reduce out-of-pocket prescription drug costs for beneficiaries, potentially resulting in higher contributions from plans and manufacturers;
(ii) drug inflationary rebate requirements to penalize manufacturers from raising the prices of Medicare covered single-source drugs and biologics beyond the inflation-adjusted rate, beginning in 2022 for Part D drugs and 2023 for Part B drugs;
(iii) to incentivize biosimilar development, the IRA provides an 8.0% Medicare Part B add-on payment for qualifying biosimilar products for a five-year period; and
(iv) Medicare Part D redesign which replaces the current coverage gap provisions and establishes a $2,000 cap for out-of-pocket costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for up to 10.0% of costs up to the $2,000 cap and up to 20.0% after that cap is reached.
The IRA's drug pricing controls and Medicare Part D redesign had an adverse impact on our sales, particularly for our products that are more substantially reliant on Medicare reimbursement. The IRA Medicare Part D redesign had a modest net unfavorable impact to our full-year 2025 revenue of approximately $90.0 million, concentrated in our SKYCLARYS and MS portfolio product revenue, approximately a quarter of which was associated with SKYCLARYS.
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The degree of impact from this legislation on our business depends on a number of forthcoming implementation actions by regulatory authorities, which may be further impacted by other legislative acts that may modify or replace the IRA, such as the OBBBA, as discussed below. The full extent of the IRA's impacts on our sales and, in turn, our business, remains uncertain.
Additionally, in May 2025 the U.S. government issued an executive order aiming to establish an MFN drug pricing policy that would tie U.S. drug prices to the prices paid for drugs in other developed countries. If HHS sets MFN pricing targets for prescription drugs, including the use of international reference pricing to set drug prices in the U.S., it could result in reduced prices and reimbursement for certain of our products in the U.S. We continue to evaluate the potential impact of this executive order. This executive order and any additional legislation, regulations or initiatives related to drug pricing, such as the CMS-proposed MFN initiatives, the Global Benchmark for Efficient Drug Pricing for certain Medicare Part B drugs and the Guarding U.S. Medicare Against Rising Drug Costs for certain Medicare Part D drugs, could create additional uncertainty around the timing and prioritization around worldwide commercial efforts and adversely impact our business and results of operations.
2025 LEGISLATION AND TAX REFORM
On July 4, 2025, the U.S. signed into law the H.R.1 legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14", commonly referred to as the OBBBA.
The OBBBA contains tax provisions, such as the permanent extension or revision of certain expiring provisions of the Tax Cuts and Jobs Act enacted in 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The provisions of the OBBBA have multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.
Given the complexity of tax laws, related regulations and interpretations, our current estimates may require revision as additional information becomes available regarding the application of the OBBBA provisions.
The OBBBA also enacts significant potential changes to Medicaid funding and rescinds or does not continue elements of the PPACA. The OBBBA implements additional eligibility rules on government health plans, expands administrative procedures around enrollment, modifies how states can obtain federal funding for Medicaid and no longer extends ACA premium subsidies. Additional federal and state guidance is expected to be issued in order to implement these OBBBA provisions, most of which have effective dates in 2027 and 2028.
At this time, we are unable to determine the overall impact that the OBBBA will have on our business, results of operations and financial condition, or the impact the OBBBA will have on the pharmaceutical industry as a whole because any such impact will depend upon developing interpretations of the OBBBA provisions and implementing regulations, which may be material.
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FINANCIAL HIGHLIGHTS
As described below under Results of Operations, our net income and diluted earnings per share attributable to Biogen Inc. for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, reflects the following:
| TOTAL REVENUE | |||||
Increased
$46.8 million or 1.9%
| DILUTED EARNINGS PER SHARE | |||||
Increased
$0.51 or 31.1%
|
PRODUCT REVENUE, NET
|
|||||
Increased
$25.8 million or 1.5%
•MS revenue increased $4.5 million, or 0.5%
•Rare disease revenue decreased $6.1 million, or 1.1%
•The increase in MS product revenue was primarily due to an increase in global TYSABRI and VUMERITY revenue driven by favorable pricing and channel dynamics as well as the favorable impact of foreign currency exchange, partially offset by a decrease in global demand of TECFIDERA, particularly in Europe, driven by generic competition.
•The decrease in rare disease product revenue was primarily due to unfavorable inventory dynamics resulting from the timing of shipments for SPINRAZA in certain international markets, partially offset by revenue growth from our new product launches, including SKYCLARYS and QALSODY.
•ZURZUVAE revenue of $55.4 million in the first quarter of 2026 was driven by the continued launch in the U.S.
| TOTAL COST AND EXPENSE | |||||
Decreased
$19.7 million or 0.9%
•Cost of sales increased $31.7 million, or 5.0%
•R&D expense increased $104.9 million, or 24.2%
•SG&A expense increased $34.8 million, or 6.1%
•Acquired IPR&D, upfront and milestone expense decreased $166.7 million, or 83.1%
•The increase in cost of sales was primarily due to higher period costs.
•The increase in R&D expense was primarily due to approximately $56.8 million of step-up amortization related to SKYCLARYS inventory and higher spend on clinical trials, including felzartamab and litifilimab.
•The increase in SG&A expense was primarily due to an increase in operational spending on sales and marketing activities in support of our U.S. and international product launches.
•The decrease in acquired IPR&D, upfront and milestone expense was due to higher upfront and milestone payments in the first quarter of 2025 of $200.7 million, compared to $34.0 million in the first quarter of 2026.
| FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES | |||||
•Cash, cash equivalents and marketable securities totaled approximately $4.7 billion as of March 31, 2026, compared to approximately $4.2 billion as of December 31, 2025.
•We generated approximately $645.5 million of net cash flow from operations for the three months ended March 31, 2026, compared to approximately $259.3 million in the prior year comparative period.
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RECENT DEVELOPMENTS
ACQUISITIONS
APELLIS PHARMACEUTICALS, INC.
In March 2026 we entered into an agreement to acquire all of the issued and outstanding shares of Apellis Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic compounds to treat diseases with high unmet needs. As a result of this proposed acquisition we would acquire two FDA-approved products from Apellis: SYFOVRE (pegcetacoplan injection) for the treatment of GA, an immune-mediated retinal disease; and EMPAVELI (pegcetacoplan) for the treatment of PNH, a rare blood disorder, and C3G and primary IC-MPGN in rare immune-mediated kidney diseases. The addition of Apellis is expected to enhance our short- and long-term revenue growth profile by adding two commercialized differentiated immunology and rare disease medicines to our growth portfolio.
Under the terms of the proposed acquisition, we would pay Apellis shareholders $41.00 per share in cash, representing an expected total transaction value of approximately $5.6 billion, and one contractual, non-transferable contingent value right per share representing the right to receive contingent cash payments of up to an aggregate of $4.00 in cash, subject to the achievement of specified annual global net sales thresholds for SYFOVRE.
We plan to fund the proposed acquisition of Apellis through approximately $3.6 billion of available cash and marketable securities on hand, supplemented by approximately $2.0 billion in bank loans. We expect this transaction to be accounted for as a business combination.
COLLABORATIVE AND OTHER RELATIONSHIPS
TJ BIOPHARMA CO., LTD.
In April 2026 we entered into a definitive agreement with TJ Biopharma Co., Ltd. to acquire TJ Bio's exclusive rights to felzartamab in the greater China region. With this agreement, we will own exclusive worldwide rights to felzartamab.
Under the terms of this agreement we made an upfront payment of $100.0 million to TJ Bio, which will be recognized in acquired in-process research and development, upfront and milestone expense within our condensed consolidated statements of income during the second quarter of 2026.
TJ Bio will also be eligible to receive potential commercial and sales milestone payments of up to $20.0 million and $730.0 million, respectively, if all specified milestones set forth in this collaboration are achieved. In addition, we may pay TJ Bio tiered royalties on potential net sales of felzartamab in the greater China region in the mid-single digit to low-double digit percentages.
Additionally, we assumed regulatory and sales milestone obligations under a pre-existing agreement between TJ Bio and MorphoSys and may pay MorphoSys tiered royalties on potential net sales of felzartamab in the greater China region.
ALTEOGEN INC.
In March 2026 we entered into an exclusive license agreement with Alteogen Inc. to enable the development of a subcutaneous formulation of felzartamab using Alteogen's ALT-B4 hyaluronidase technology.
In connection with the closing of this transaction we accrued an upfront payment of $20.0 million to Alteogen, which was recognized in acquired in-process research and development, upfront and milestone expense within our condensed consolidated statements of income for the three months ended March 31, 2026, which was subsequently paid in April 2026.
Alteogen will also be eligible to receive a $10.0 million option payment if a second program is selected for development, and potential development, regulatory and commercial milestone payments of up to $39.0 million, $80.0 million and $430.0 million respectively, if all specified milestones set forth in this collaboration for both programs are achieved. In addition, we may pay Alteogen tiered royalties on potential net sales of any combination products under this collaboration in the mid-single digit percentages.
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ALLOY THERAPEUTICS, INC.
In March 2026 we entered into a collaboration and license agreement with Alloy Therapeutics Inc. for the use of Alloy's novel and proprietary AntiClastic ASO Platform. Through this collaboration, we will apply the platform to advance antisense therapeutics against multiple targets.
In connection with the closing of this transaction we accrued an upfront payment of $12.0 million to Alloy, which was recognized in acquired in-process research and development, upfront and milestone expense within our condensed consolidated statements of income for the three months ended March 31, 2026. We expect this upfront milestone to be paid during the second quarter of 2026.
Alloy will also be eligible to receive potential milestone payments and tiered royalties on any products resulting from the collaboration.
DEVELOPMENTS IN KEY COLLABORATIVE RELATIONSHIPS
LEQEMBI (lecanemab)
United States
Key developments related to LEQEMBI in the U.S. during 2026 consisted of the following:
•In March 2026 we and our collaboration partner Eisai announced new real-world findings from an analysis of long-term treatment persistence and baseline characteristics among people receiving IV lecanemab. The findings showed that most patients continue with ongoing maintenance therapy after the initial 18 months of treatment.
•In January 2026 the FDA accepted for review the supplemental BLA for LEQEMBI subcutaneous autoinjector, LEQEMBI IQLIK, for a weekly starting dose, with a PDUFA action date of May 24, 2026.
Rest of World
Key developments related to LEQEMBI (lecanemab) in rest of world markets during 2026 consisted of the following:
•In February 2026 the BLA for LEQEMBI subcutaneous autoinjector was designated for Priority Review by the NMPA in China.
OTHER KEY DEVELOPMENTS
LITIFILIMAB
•In March 2026 we announced positive results from the Phase 2 part of the AMETHYST Phase 2/3 study (Part A) of litifilimab in people living with CLE. The Phase 2 part of the AMETHYST study met its primary endpoint of reduction of disease activity in people living with CLE at Week 16, with more litifilimab participants achieving clear/almost clear skin. If approved, litifilimab could be the first targeted therapy for this disease.
•In January 2026 the FDA granted Breakthrough Therapy designation for litifilimab for the treatment of CLE.
SALANERSEN (BIIB115)
•In March 2026 we presented additional results from the Phase 1b study of salanersen, an ASO given once a year for the treatment of SMA. The data showed support for the safety and effectiveness of salanersen over one year of treatment in children with SMA who had the potential for improvement due to suboptimal clinical status with prior gene therapy.
SPINRAZA (nusinersen)
•In March 2026 the FDA approved the high dose regimen of SPINRAZA, which is comprised of 50 mg/5 mL and 28mg/5 mL doses for the treatment of SMA.
•In January 2026 the EC granted marketing authorization for a high dose regimen of SPINRAZA in the E.U. for the treatment of 5q SMA, which is the most common form of the disease and represents approximately 95% of all SMA cases. The high dose regimen is comprised of 50 mg/5 mL and 28 mg/5 mL doses and individuals transitioning from the 12 mg dose will receive one 50 mg dose in place of their next 12 mg dose, followed by 28 mg maintenance doses every four months thereafter.
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RESULTS OF OPERATIONS
REVENUE
The following revenue discussion should be read in conjunction with Note 5, Revenue, to our condensed consolidated financial statements included in this report.
Revenue is summarized as follows:
| For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||
| Product revenue, net: | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 839.2 | 33.9 | % | $ | 753.8 | 31.0 | % | $ | 85.4 | 11.3 | % | ||||||||||||||||||||||||||
| Rest of world | 913.1 | 36.8 | 972.7 | 40.0 | (59.6) | (6.1) | ||||||||||||||||||||||||||||||||
| Total product revenue, net | 1,752.3 | 70.7 | 1,726.5 | 71.0 | 25.8 | 1.5 | ||||||||||||||||||||||||||||||||
| Revenue from anti-CD20 therapeutic programs | 419.1 | 16.9 | 378.2 | 15.5 | 40.9 | 10.8 | ||||||||||||||||||||||||||||||||
|
Alzheimer's collaboration revenue(1)
|
59.5 | 2.4 | 33.0 | 1.4 | 26.5 | 80.3 | ||||||||||||||||||||||||||||||||
|
Contract manufacturing, royalty and other revenue
|
246.9 | 10.0 | 293.3 | 12.1 | (46.4) | (15.8) | ||||||||||||||||||||||||||||||||
| Total revenue | $ | 2,477.8 | 100.0 | % | $ | 2,431.0 | 100.0 | % | $ | 46.8 | 1.9 | % | ||||||||||||||||||||||||||
(1) Alzheimer's collaboration revenue consists of our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties.
PRODUCT REVENUE
Product revenue is summarized as follows:
| For the Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) |
United States |
Rest of World |
Total |
% Total |
United States |
Rest of World |
Total |
% Total |
$ Change |
% Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multiple Sclerosis | $ | 559.4 | $ | 398.1 | $ | 957.5 | 54.6 | % | $ | 490.4 | $ | 462.6 | $ | 953.0 | 55.2 | % | $ | 4.5 | 0.5 | % | ||||||||||||||||||||||||||||||||||||||||||
| Rare Disease | 224.5 | 332.7 | 557.2 | 31.8 | 231.0 | 332.3 | 563.3 | 32.6 | (6.1) | (1.1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Biosimilars | - | 182.2 | 182.2 | 10.4 | 4.3 | 176.5 | 180.8 | 10.5 | 1.4 | 0.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Other(1)
|
55.3 | 0.1 | 55.4 | 3.2 | 28.1 | 1.3 | 29.4 | 1.7 | 26.0 | 88.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total product revenue, net | $ | 839.2 | $ | 913.1 | $ | 1,752.3 | 100.0 | % | $ | 753.8 | $ | 972.7 | $ | 1,726.5 | 100.0 | % | $ | 25.8 | 1.5 | % | ||||||||||||||||||||||||||||||||||||||||||
(1) Other includes ZURZUVAE, FUMADERM and ADUHELM.
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| MULTIPLE SCLEROSIS | |||||
•Global TYSABRI revenue increased $60.0 million, from $381.5 million in 2025 to $441.5 million in 2026, or 15.7%, primarily due to favorable channel dynamics, a favorable pricing change in estimates in the U.S., an increase in rest of world demand driven by the subcutaneous offering and the favorable impact of foreign currency exchange. The increase was partially offset by a decrease in U.S. demand driven by increased competition.
•Global VUMERITY revenue increased $40.2 million, from $138.8 million in 2025 to $179.0 million in 2026, or 29.0%, primarily due to favorable pricing and channel dynamics in the U.S., an increase in rest of world demand and the favorable impact of foreign currency exchange.
•Global TECFIDERA revenue decreased $96.6 million, from $206.1 million in 2025 to $109.5 million in 2026, or 46.9%, driven by a decrease in global demand, particularly in Europe, as a result of multiple TECFIDERA generic entrants.
•Global Interferon revenue increased $1.2 million, from $226.3 million in 2025 to $227.5 million in 2026, or 0.5%, driven by an increase in pricing in the U.S. and the favorable impact of foreign currency exchange, offset by a decrease in demand as patients transition to higher efficacy therapies.
In 2026 we expect total MS revenue will decline as a result of increasing competition for many of our MS products in both the U.S. and rest of world markets. We expect TECFIDERA revenue will be adversely impacted by accelerating generic competition in certain markets in the E.U. Additionally, a biosimilar entrant of TYSABRI was approved in the U.S. and the E.U. in 2023. We expect the future sales of TYSABRI will continue to be adversely affected by the entrance of this biosimilar. We expect the decline to be partially offset by continued increasing demand for VUMERITY.
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| RARE DISEASE | |||||
•U.S. SPINRAZA revenue decreased $12.2 million, from $154.4 million in 2025 to $142.2 million in 2026, or 7.9%, primarily due to lower demand and unfavorable inventory dynamics.
•Rest of world SPINRAZA revenue decreased $37.7 million, from $269.5 million in 2025 to $231.8 million in 2026, or 14.0%, primarily due to unfavorable inventory dynamics driven by the timing of shipments in certain international markets compared to the first quarter of 2025. The decrease was also driven by a one-time VAT refund received during the first quarter of 2025 of approximately $18.1 million, partially offset by the favorable impact of foreign currency exchange.
•Global SKYCLARYS revenue increased $26.8 million, from $123.9 million in 2025 to $150.7 million in 2026, or 21.6%, primarily related to an increase in rest of world sales volumes driven by the continued launch in Europe and certain other international markets, partially offset by unfavorable inventory dynamics in the U.S.
•Global QALSODY revenue increased $17.0 million, from $15.5 million in 2025 to $32.5 million in 2026, or 109.7%, primarily related to an increase in rest of world sales volumes driven by the continued launch in international markets.
Rare disease revenue includes sales from SPINRAZA, QALSODY and SKYCLARYS.
In 2026 we expect growth in rare disease revenue due to the continued launch of SKYCLARYS in Europe and other international markets as well as the continued launch of QALSODY in Europe. We anticipate global SPINRAZA revenue growth to be relatively flat in 2026.
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| BIOSIMILARS | |||||
•For the three months ended March 31, 2026, compared to the same period of 2025, the increase in biosimilar revenue was primarily due to the favorable impact of foreign currency exchange, offset by a decrease in sales volumes.
Biosimilars revenue includes sales from BENEPALI, IMRALDI, FLIXABI, BYOOVIZ and TOFIDENCE. In 2025 we completed the sale of our rights to TOFIDENCE and BYOOVIZ.
| OTHER PRODUCT REVENUE | |||||
ZURZUVAE
Global ZURZUVAE revenue increased $27.7 million, from $27.7 million in 2025 to $55.4 million in 2026, or 100.0%, primarily due to higher demand resulting from an increase in total patients in the U.S. We anticipate growth in U.S. ZURZUVAE revenue as we expect total patients to continue to increase in 2026.
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REVENUE FROM ANTI-CD20 THERAPEUTIC PROGRAMS
Our share of RITUXAN, including RITUXAN HYCELA, GAZYVA and LUNSUMIO collaboration operating profits in the U.S., royalty revenue on sales of OCREVUS and other revenue from anti-CD20 therapeutic programs are summarized in the table below. For purposes of this discussion, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.
| For the Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Royalty revenue on sales of OCREVUS | $ | 317.2 | $ | 288.8 | ||||||||||
| Biogen's share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO | 94.7 | 83.7 | ||||||||||||
| Other revenue from anti-CD20 therapeutic programs | 7.2 | 5.7 | ||||||||||||
| Total revenue from anti-CD20 therapeutic programs | $ | 419.1 | $ | 378.2 | ||||||||||
ROYALTY REVENUE ON SALES OF OCREVUS
For the three months ended March 31, 2026, compared to the same period in 2025, the increase in royalty revenue on sales of OCREVUS was primarily due to sales growth of OCREVUS in the U.S.
OCREVUS royalty revenue is based on our estimates from third party and market research data of OCREVUS sales occurring during the corresponding period. Differences between actual and estimated royalty revenue will be adjusted for in the period in which they become known, which is generally expected to be the following quarter.
BIOGEN'S SHARE OF PRE-TAX PROFITS IN THE U.S. FOR RITUXAN, GAZYVA AND LUNSUMIO
For the three months ended March 31, 2026, compared to the same period in 2025, the increase in our share of pre-tax profits in the U.S. for RITUXAN, GAZYVA and LUNSUMIO was primarily due to increases in sales volumes.
OTHER REVENUE FROM ANTI-CD20 THERAPEUTIC PROGRAMS
Other revenue from anti-CD20 therapeutic programs consists of our share of pre-tax co-promotion profits from RITUXAN in Canada, royalty revenue on sales of LUNSUMIO outside the U.S. and royalty revenue on net sales of COLUMVI in the U.S.
For additional information on our collaboration arrangements with Genentech, including information regarding the pre-tax profit-sharing formula and its impact on future revenue from anti-CD20 therapeutic programs, please read Note 18, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report.
ALZHEIMER'S COLLABORATION REVENUE
Alzheimer's collaboration revenue consists of our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties, as we are not the principal. We began recognizing Alzheimer's collaboration revenue upon the accelerated approval of LEQEMBI in the U.S. during the first quarter of 2023.
For the three months ended March 31, 2026 and 2025, we recognized Alzheimer's collaboration revenue of approximately $59.5 million and $33.0 million, respectively. The increase was primarily due to higher sales volumes driven by the continued launch of LEQEMBI in the U.S. and international markets.
For additional information on our collaboration arrangements with Eisai, please read Note 18, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report.
CONTRACT MANUFACTURING, ROYALTY AND OTHER REVENUE
Contract manufacturing, royalty and other revenue is summarized as follows:
| For the Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Contract manufacturing revenue | $ | 237.2 | $ | 282.3 | ||||||||||
|
Royalty and other revenue
|
9.7 | 11.0 | ||||||||||||
| Total contract manufacturing, royalty and other revenue | $ | 246.9 | $ | 293.3 | ||||||||||
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CONTRACT MANUFACTURING REVENUE
Contract manufacturing revenue primarily reflects amounts earned under contract manufacturing agreements with our strategic customers and batches of LEQEMBI related to our collaboration with Eisai.
For the three months ended March 31, 2026, compared to the same period in 2025, the decrease in contract manufacturing revenue was primarily driven by lower volumes due to the timing of batch production.
ROYALTY AND OTHER REVENUE
Royalty and other revenue primarily reflects royalty revenue on biosimilar products from our license arrangements with Samsung Bioepis and royalties we receive from net sales on products related to patents that we have out-licensed.
For additional information on our license arrangements with Samsung Bioepis and our collaboration arrangements with Eisai, please read Note 18, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report.
RESERVES FOR DISCOUNTS AND ALLOWANCES
Revenue from product sales is recorded net of reserves established for applicable discounts and allowances, including those associated with the implementation of pricing actions in certain international markets where we operate.
The IRA's drug pricing controls and Medicare Part D redesign had an adverse impact on our sales, particularly for our products that are more substantially reliant on Medicare reimbursement. The IRA Medicare Part D redesign had a modest net unfavorable impact to our full-year 2025 revenue of approximately $90.0 million, concentrated in our SKYCLARYS and MS portfolio product revenue, approximately a quarter of which was associated with SKYCLARYS.
The degree of impact from this legislation on our business depends on a number of forthcoming implementation actions by regulatory authorities, which may be further impacted by other legislative acts that may modify or replace the IRA, such as the OBBBA. The full extent of the IRA's impacts on our sales and, in turn, our business, remains uncertain.
Reserves for discounts, contractual adjustments and returns that reduced gross product revenue are summarized as follows:
| For the Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Contractual adjustments | $ | 655.3 | $ | 658.3 | ||||||||||
| Discounts | 214.8 | 187.1 | ||||||||||||
| Returns | 17.7 | 9.5 | ||||||||||||
| Total discounts and allowances | $ | 887.8 | $ | 854.9 | ||||||||||
For the three months ended March 31, 2026 and 2025, reserves for discounts and allowances as a percentage of gross product revenue was 33.3% and 33.1%, respectively.
CONTRACTUAL ADJUSTMENTS
Contractual adjustments primarily relate to Medicaid and managed care rebates in the U.S., pharmacy rebates, co-payment (copay) assistance, VA, 340B discounts, specialty pharmacy program fees and other government rebates or applicable allowances.
For the three months ended March 31, 2026, compared to the same period in 2025, contractual adjustments remained flat, reflecting lower Medicaid rebates, co-pay assistance and managed care rebates in the U.S., offset by higher government rebates in rest of world and higher Medicare manufacturer reserves and 340B discounts in the U.S.
DISCOUNTS
Discounts include trade term discounts, wholesaler incentives and volume related discounts.
For the three months ended March 31, 2026, compared to the same period in 2025, the increase in discounts was primarily driven by higher purchase discounts in rest of world and higher volume discounts in the U.S.
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RETURNS
Product return reserves are established for returns made by wholesalers. In accordance with contractual terms, wholesalers are permitted to return product for reasons such as damaged or expired product. The majority of wholesaler returns are due to product expiration. Provisions for estimated product returns are recognized in the period the related revenue is recognized, resulting in a reduction to product sales.
For the three months ended March 31, 2026, compared to the same period in 2025, the increase in returns was primarily driven by higher returns in the U.S.
For additional information on our revenue reserves, please read Note 5, Revenue, to our condensed consolidated financial statements included in this report.
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COST AND EXPENSE
A summary of total cost and expense is as follows:
| For the Three Months Ended March 31, | ||||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Cost of sales, excluding amortization and impairment of acquired intangible assets | $ | 661.0 | $ | 629.3 | $ | 31.7 | 5.0 | % | ||||||||||||||||||
| Research and development | 539.0 | 434.1 | 104.9 | 24.2 | ||||||||||||||||||||||
| Acquired in-process research and development, upfront and milestone expense | 34.0 | 200.7 | (166.7) | (83.1) | ||||||||||||||||||||||
| Selling, general and administrative | 607.3 | 572.5 | 34.8 | 6.1 | ||||||||||||||||||||||
| Amortization and impairment of acquired intangible assets | 136.5 | 111.8 | 24.7 | 22.1 | ||||||||||||||||||||||
| Collaboration profit sharing/(loss reimbursement) | 74.2 | 58.1 | 16.1 | 27.7 | ||||||||||||||||||||||
| (Gain) loss on fair value remeasurement of contingent consideration | 20.5 | 9.6 | 10.9 | 113.5 | ||||||||||||||||||||||
| Restructuring charges | 7.9 | 35.3 | (27.4) | (77.6) | ||||||||||||||||||||||
| Other (income) expense, net | 19.7 | 68.4 | (48.7) | (71.2) | ||||||||||||||||||||||
| Total cost and expense | $ | 2,100.1 | $ | 2,119.8 | $ | (19.7) | (0.9) | % | ||||||||||||||||||
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COST OF SALES, EXCLUDING AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS
| For the Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Product | $ | 478.7 | $ | 462.2 | ||||||||||
| Royalty | 182.3 | 167.1 | ||||||||||||
| Total cost of sales | $ | 661.0 | $ | 629.3 | ||||||||||
PRODUCT COST OF SALES
For the three months ended March 31, 2026, compared to the same period in 2025, the increase in product cost of sales was primarily due to higher period costs.
Contract manufacturing revenue includes LEQEMBI inventory produced for Eisai. Cost of sales as a percentage of revenue was adversely affected by LEQEMBI batches due to lower margins associated with this business.
As a result of our acquisition of Reata in September 2023 we recorded a fair value step-up adjustment related to the acquired inventory of SKYCLARYS. This fair value step-up adjustment is being amortized to cost of sales as the inventory is sold. We expect this amount to be fully amortized by the end of 2028. For the three months ended March 31, 2026 and 2025, amortization from the fair value step-up adjustment was approximately $50.8 million and $51.4 million, respectively.
For additional information on our collaboration arrangements with Eisai, please read Note 18, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report. For additional information on our acquisition of Reata, please read Note 2, Acquisitions, to our consolidated financial statements included in our 2025 Form 10-K.
ROYALTY COST OF SALES
For the three months ended March 31, 2026, compared to the same period in 2025, the increase in royalty cost of sales was primarily due to higher royalties payable associated with higher sales of TYSABRI.
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RESEARCH AND DEVELOPMENT
Research and development expense, as a percentage of total revenue, was 21.8% and 17.9% for the three months ended March 31, 2026 and 2025, respectively.
For the three months ended March 31, 2026, compared to the same period in 2025, the increase in research and development was primarily driven by approximately $56.8 million of step-up amortization related to SKYCLARYS inventory and higher spend on clinical trials, including felzartamab and litifilimab. Clinical trial spend related to litifilimab during the first quarter of 2026 and 2025 was offset by $25.0 million and $50.0 million, respectively, in research and development funding received from Royalty Pharma.
EARLY STAGE PROGRAMS
Q1 2026 vs. Q1 2025
The decrease in early stage program expense was driven by a decrease in costs associated with:
•advancement of felzartamab for IgAN and PMN to late stage.
The decrease was partially offset by an increase in costs associated with:
•development of salanersen for the treatment of SMA.
LATE STAGE PROGRAMS
Q1 2026 vs. Q1 2025
The increase in late stage program expense was driven by an increase in costs associated with:
•the development of felzartamab for AMR, IgAN and PMN; and
•development of litifilimab for the treatment of CLE and SLE, offset by Royalty Pharma funding received during the first quarter of 2026 and 2025 of $25.0 million and $50.0 million, respectively.
MARKETED PROGRAMS
Q1 2026 vs. Q1 2025
The increase in marketed program expense was driven by an increase in costs associated with:
•$56.8 million of step-up amortization related to SKYCLARYS inventory; and
•increased spend on LEQEMBI for the treatment of Alzheimer's disease.
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Research and development expense is reported above based on the following classifications. The development stage reported is based upon the program status when incurred. Therefore, the same program could be reflected in different development stages in the same year. For several of our programs, the research and development activities are part of our collaborative and other relationships. Our costs reflect our share of the total costs incurred.
•Research and discovery: represents costs incurred to support our discovery research and translational science efforts.
•Early stage programs: are programs in Phase 1 or Phase 2 development.
•Late stage programs: are programs in Phase 3 development or in registration stage.
•Marketed products: includes costs associated with product lifecycle management activities including, if applicable, costs associated with the development of new indications for existing products.
•Other research and development costs: A significant amount of our research and development costs consist of indirect costs incurred in support of overall research and development activities and non-specific programs, including activities that benefit multiple programs, such as management costs, as well as depreciation, information technology and facility-based expenses. These costs are considered other research and development costs in the table above and are not allocated to a specific program or stage.
We expect our core research and development expense to increase in 2026, primarily due to investments in our late-stage programs and the reduction of research and development funding received from Royalty Pharma. We intend to continue committing significant resources to targeted research and development opportunities while continuing to invest in our pipeline, where there is a significant unmet need and where a drug candidate has the potential to be highly differentiated.
ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT, UPFRONT AND MILESTONE EXPENSE
Acquired in-process research and development, upfront and milestone expense includes costs incurred in connection with collaboration and license agreements such as upfront and milestone payments and, when applicable, premiums on equity securities and asset acquisitions of acquired in-process research and development.
For the three months ended March 31, 2026 and 2025, acquired in-process research and development, upfront and milestone expense totaled approximately $34.0 million and $200.7 million, respectively. The decrease was driven by higher upfront and milestone payments in the first quarter of 2025 compared to 2026.
For the three months ended March 31, 2026, acquired in-process research and development, upfront and milestone expense primarily consists of the following activity:
•Upfront payment of $20.0 million to Alteogen accrued in connection with the closing of our collaboration and license agreement; and
•Upfront payment of $12.0 million to Alloy accrued in connection with the closing of our collaboration and license agreement.
For the three months ended March 31, 2025, acquired in-process research and development, upfront and milestone expense primarily consists of the following activity:
•Upfront payment of $165.0 million made to Stoke in connection with the closing of our collaboration and license agreement; and
•Milestone payment of $35.0 million to MorphoSys accrued in connection with the first patient dosed in a Phase 3 clinical trial of felzartamab for the treatment of AMR.
For additional information on our collaboration arrangements, please read Note 18, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report.
SELLING, GENERAL AND ADMINISTRATIVE
For the three months ended March 31, 2026, compared to the same period in 2025, selling, general and administrative expense increased by approximately 6.1% primarily due to an increase in operational spending on sales and marketing activities in support of our U.S. and international product launches.
We expect selling, general and administrative expense for 2026 to remain relatively flat when compared to 2025. We anticipate increased spend related to our continued investment in product launches and pre-launch activities, offset by reduced spending for our mature products.
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AMORTIZATION AND IMPAIRMENT OF ACQUIRED INTANGIBLE ASSETS
Our amortization expense is based on the economic consumption and impairment of intangible assets. Our most significant amortizable intangible assets are related to TYSABRI, AVONEX, SPINRAZA, VUMERITY and SKYCLARYS.
For the three months ended March 31, 2026 and 2025, amortization and impairment of acquired intangible assets totaled $136.5 million and $111.8 million, respectively. The increase was primarily due to amortization for the acquired intangible assets associated with SKYCLARYS and TYSABRI.
For the three months ended March 31, 2026 and 2025, we had no impairment charges.
For additional information on the amortization and impairment of our acquired intangible assets, please read Note 7, Intangible Assets and Goodwill, to our condensed consolidated financial statements included in this report.
COLLABORATION PROFIT SHARING/(LOSS REIMBURSEMENT)
Collaboration profit sharing/(loss reimbursement) includes Samsung Bioepis' 50.0% share of the profit or loss related to our biosimilars 2013 commercial agreement with Samsung Bioepis and collaboration profit sharing/(loss reimbursement) related to Supernus' 50.0% share of the profit or loss in the U.S. related to ZURZUVAE for PPD.
For the three months ended March 31, 2026 and 2025, we recognized net profit-sharing expense of approximately $57.2 million and $48.0 million, respectively, to reflect Samsung Bioepis' 50.0% sharing of the net collaboration profits.
For the three months ended March 31, 2026 and 2025, we recognized net profit-sharing expense of approximately $17.0 million and $10.1 million, respectively, to reflect Supernus' 50.0% share of the net collaboration results in the U.S.
For additional information on our collaboration and license arrangements with Samsung Bioepis and Supernus, please read Note 18, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report.
(GAIN) LOSS ON FAIR VALUE REMEASUREMENT OF CONTINGENT CONSIDERATION
Consideration payable for certain of our business combinations include future payments that are contingent upon the occurrence of a particular event or events. We record an obligation for such contingent consideration payments at fair value on the acquisition date. We then revalue our contingent consideration obligations each reporting period. Changes in the fair value of our contingent consideration obligations, other than changes due to payments, are recognized as a (gain) loss on fair value remeasurement of contingent consideration in our condensed consolidated statements of income. In connection with our acquisition of HI-Bio in July 2024 we recorded contingent consideration obligations related to potential milestone payments.
For the three months ended March 31, 2026, changes in the fair value of our contingent consideration obligations were primarily due to changes in the probabilities of success and expected timing of the achievement of certain remaining developmental milestones.
For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions, to our consolidated financial statements included in our 2025 Form 10-K.
RESTRUCTURING CHARGES
2023 FIT FOR GROWTH RESTRUCTURING PROGRAM
In 2023 we initiated cost saving measures as part of our Fit for Growth program to reduce operating costs, while improving operating efficiency and effectiveness. The Fit for Growth program generated approximately $1.0 billion in gross operating expense savings by the end of 2025, some of which has been reinvested in various initiatives. The Fit for Growth program included net headcount reductions of approximately 1,400 employees and we incurred total restructuring charges of approximately $320.0 million, by the end of 2025.
For the three months ended March 31, 2025, we recorded approximately $35.3 million in restructuring charges related to severance costs from our Fit for Growth program within restructuring charges in our condensed consolidated statements of income.
For additional information on our cost saving initiatives, please read Note 4, Restructuring, to our consolidated financial statements included in our 2025 Form 10-K.
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OTHER (INCOME) EXPENSE, NET
For the three months ended March 31, 2026, compared to the same period in 2025, the change in other (income) expense, net primarily reflects higher losses on our equity investments in 2025.
INTEREST INCOME AND EXPENSE
For the three months ended March 31, 2026, net interest expense was approximately $29.7 million, compared to $36.1 million in the prior year comparative period. The change was primarily due to higher interest income driven by higher cash balances in 2026.
We anticipate higher net interest expense in 2026, compared to 2025, due to lower interest income driven by lower cash balances and higher interest expense resulting from additional financing related to our proposed acquisition of Apellis.
NET (GAINS) LOSSES IN EQUITY SECURITIES
For the three months ended March 31, 2026, net unrealized and realized gains on our holdings in equity securities were approximately $19.1 million and $3.2 million, respectively, compared to net unrealized losses and realized gains of approximately $41.0 million and $5.4 million, respectively, in the prior year comparative period.
•The net unrealized gains recognized during the three months ended March 31, 2026, primarily reflect an increase in the aggregate fair value of our investment in Denali common stock of approximately $19.2 million.
•The net unrealized losses recognized during the three months ended March 31, 2025, primarily reflect a decrease in the aggregate fair value of our investment in Denali common stock of approximately $48.5 million, partially offset by an increase in the fair value of Sage common stock of approximately $15.7 million, which was later disposed of during the third quarter of 2025.
INCOME TAX PROVISION
| For the Three Months Ended March 31, | ||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | ||||||||||||
| Income before income tax (benefit) expense | $ | 377.7 | $ | 311.2 | ||||||||||
| Income tax (benefit) expense | 58.2 | 70.7 | ||||||||||||
| Effective tax rate | 15.4 | % | 22.7 | % | ||||||||||
Our effective tax rate fluctuates from year to year due to the global nature of our operations. The factors that most significantly impact our effective tax rate include changes in tax laws, variability in the allocation of our taxable earnings among multiple jurisdictions, the amount and characterization of our research and development expense, the levels of certain deductions and credits, acquisitions and licensing transactions.
For the three months ended March 31, 2026 and 2025, our effective tax rate was 15.4% and 22.7%, respectively. The decrease in our effective tax rate was partially driven by favorable impacts of a current year settlement of a foreign tax audit and the vesting of certain share based awards, partially offset by the higher rate of tax on NCTI due to the OBBBA enactment.
PILLAR TWO
The OECD has issued model rules, which generally provide for a jurisdictional minimum effective tax rate of 15.0% as defined in those rules. Various countries have or are in the process of enacting legislation intended to implement the principles. Our income tax provision for the three months ended March 31, 2026 and 2025, reflects currently enacted legislation and guidance related to the OECD model rules, including the Pillar Two side-by-side package announced by the OECD in January 2026. This enacted legislation and guidance related to the OECD model rules did not result in any material adjustments to our income tax provision or income tax balances as of March 31, 2026 and December 31, 2025. At this stage, we do not believe the side-by-side package impacts our financial results as of March 31, 2026 and December 31, 2025.
For additional information on our income taxes, please read Note 17, Income Taxes, to our consolidated financial statements included in our 2025 Form 10-K.
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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our financial condition is summarized as follows:
| (In millions, except percentages) | As of March 31, 2026 | As of December 31, 2025 | $ Change | % Change | ||||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 3,382.7 | $ | 3,008.5 | $ | 374.2 | 12.4 | % | ||||||||||||||||||
| Marketable securities - current | 900.0 | 807.2 | 92.8 | 11.5 | ||||||||||||||||||||||
| Marketable securities - non-current | 465.6 | 431.9 | 33.7 | 7.8 | ||||||||||||||||||||||
| Total cash, cash equivalents and marketable securities | $ | 4,748.3 | $ | 4,247.6 | $ | 500.7 | 11.8 | % | ||||||||||||||||||
| Borrowings: | ||||||||||||||||||||||||||
| Notes payable | $ | 6,288.5 | $ | 6,286.8 | $ | 1.7 | - | % | ||||||||||||||||||
| Total borrowings | $ | 6,288.5 | $ | 6,286.8 | $ | 1.7 | - | % | ||||||||||||||||||
| Working capital: | ||||||||||||||||||||||||||
| Current assets | $ | 9,190.4 | $ | 8,974.1 | $ | 216.3 | 2.4 | % | ||||||||||||||||||
| Current liabilities | (2,998.9) | (3,349.4) | 350.5 | (10.5) | ||||||||||||||||||||||
| Total working capital | $ | 6,191.5 | $ | 5,624.7 | $ | 566.8 | 10.1 | % | ||||||||||||||||||
OVERVIEW
We have historically financed and expect to continue to fund our operating and capital expenditures primarily through cash flow earned through our operations and borrowings, as well as our existing cash resources. We believe that generic and biosimilar competition for many of our key products, the continued overall decline of our MS business and our investments in the launch of key new products and the development of our pipeline will have a significant adverse impact on our future cash flow from operations.
We believe that our existing funds, when combined with cash generated from operations and our access to additional financing resources, if needed, are sufficient to satisfy our operating, working capital, strategic alliance, milestone payment, capital expenditure and debt service requirements for the foreseeable future. In addition, we may choose to opportunistically return cash to shareholders and pursue other business initiatives, including acquisition and licensing activities. We may also seek additional funding through a combination of new collaborative agreements, strategic alliances and additional equity and debt financings or from other sources should we identify a significant new opportunity.
In March 2026 we entered into an agreement to acquire all of the issued and outstanding shares of Apellis for $5.6 billion, which we plan to fund through approximately $3.6 billion of available cash and marketable securities on hand, supplemented by approximately $2.0 billion in bank loans. Additionally, in April 2026 we entered into a definitive agreement with TJ Bio to acquire TJ Bio's exclusive rights to felzartamab in the greater China region and made an upfront payment of $100.0 million during the second quarter of 2026.
For additional information on certain risks that could negatively impact our financial position or future results of operations, please read Item 1A. Risk Factors and Item 3. Quantitative and Qualitative Disclosures About Market Risk included in this report.
LIQUIDITY
WORKING CAPITAL
Working capital is defined as current assets less current liabilities. Our working capital was $6.2 billion and $5.6 billion as of March 31, 2026 and December 31, 2025, respectively. The change in working capital reflects an increase in total current assets of approximately $216.3 million and a decrease in total current liabilities of approximately $350.5 million. The changes in total current assets and total current liabilities were primarily driven by the following:
CURRENT ASSETS
•$467.0 million increase in cash, cash equivalents and current marketable securities; and
•$219.1 million decrease in inventory primarily due to timing of production.
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CURRENT LIABILITIES
•$255.8 million decrease in accrued expense and other primarily due to the timing of our annual incentive compensation payment.
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
As of March 31, 2026, we had cash, cash equivalents and marketable securities totaling approximately $4.7 billion compared to approximately $4.2 billion as of December 31, 2025. The increase in the balance was primarily due to cash flows from operations, which includes $25.0 million of research and development funding received from Royalty Pharma, partially offset by the $35.0 million payment made to the former shareholders of Alcyone upon FDA approval of a supplemental application in January 2026, capital expenditures and payments related to the issuance of stock for share-based compensation arrangements.
Until required for another use in our business, we typically invest our cash reserves in bank deposits, certificates of deposit, commercial paper, corporate notes, U.S. and foreign government instruments, overnight reverse repurchase agreements and other interest-bearing marketable debt instruments in accordance with our investment policy. It is our policy to mitigate credit risk in our cash reserves and marketable securities by maintaining a well-diversified portfolio that limits the amount of exposure as to institution, maturity and investment type. We have experienced no significant limitations in our liquidity resulting from uncertainties in the banking sector.
For additional information on our collaboration arrangements, please read Note 18, Collaborative and Other Relationships, to our condensed consolidated financial statements included in this report.
CASH FLOW
The following table summarizes our cash flow activity:
| For the Three Months Ended March 31, | ||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | % Change | |||||||||||||||||
| Net cash flow provided by (used in) operating activities | $ | 645.5 | $ | 259.3 | 148.9 | % | ||||||||||||||
| Net cash flow provided by (used in) investing activities | (209.5) | (47.3) | 342.9 | |||||||||||||||||
| Net cash flow provided by (used in) financing activities | (43.8) | (23.0) | 90.4 | |||||||||||||||||
OPERATING ACTIVITIES
Operating cash flow is derived by adjusting our net income for:
•non-cash operating items such as depreciation and amortization, impairment charges, unrealized (gain) loss on strategic investments and share-based compensation;
•changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations; and
•(gains) losses on the disposal of assets, deferred income taxes, changes in the fair value of contingent payments associated with our acquisitions of businesses and acquired in-process research and development.
For the three months ended March 31, 2026, compared to the same period in 2025, the increase in net cash flow provided by operating activities was primarily due to a higher net income in 2026. Net income in 2025 included the $165.0 million upfront payment made to Stoke in connection with the closing of our collaboration and license agreement and higher losses on our equity investments.
INVESTING ACTIVITIES
For the three months ended March 31, 2026, compared to the same period in 2025, the change in net cash flow in investing activities was primarily due to higher net purchases of marketable securities in 2026.
FINANCING ACTIVITIES
For the three months ended March 31, 2026, compared to the same period in 2025, the change in net cash flow in financing activities was primarily due to higher payments related to the issuance of stock for share-based compensation arrangements in 2026.
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CAPITAL RESOURCES
DEBT AND CREDIT FACILITIES
LONG-TERM DEBT
Our long-term obligations primarily consist of long-term debt related to our Senior Notes with final maturity dates ranging between 2030 and 2055. As of March 31, 2026, our outstanding balance related to long-term debt was $6.3 billion, net of discounts and debt offering costs.
2024 REVOLVING CREDIT FACILITY
In August 2024 we entered into a $1.5 billion, five-year senior unsecured revolving credit facility under which we are permitted to draw funds for working capital and general corporate purposes. The terms of the revolving credit facility include a financial covenant that requires us not to exceed a maximum consolidated leverage ratio. This revolving credit facility replaced the revolving credit facility that we entered into in January 2020. As of March 31, 2026 and December 31, 2025, we had no outstanding borrowings and were in compliance with all covenants under this facility.
For a summary of the fair and carrying values of our outstanding borrowings as of March 31, 2026 and December 31, 2025, please read Note 8, Fair Value Measurements, to our condensed consolidated financial statements included in this report.
For additional information on our credit facility please read, Note 13, Indebtedness, to our consolidated financial statements included in our 2025 Form 10-K.
SHARE REPURCHASE PROGRAMS
In October 2020 our Board of Directors authorized our 2020 Share Repurchase Program, which is a program to repurchase up to $5.0 billion of our common stock. Our 2020 Share Repurchase Program does not have an expiration date. All shares repurchased under our 2020 Share Repurchase Program were retired. There were no share repurchases of our common stock during the three months ended March 31, 2026 and 2025. Approximately $2.1 billion remained available under our 2020 Share Repurchase Program as of March 31, 2026.
CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS
CONTRACTUAL OBLIGATIONS
Our contractual obligations primarily consist of our obligations under non-cancellable operating leases, long-term debt obligations and defined benefit and other purchase obligations, excluding amounts related to uncertain tax positions, funding commitments, research and development funding arrangements with third parties, contingent development, regulatory and commercial milestone payments and contingent payments, as described below.
In addition, certain of our collaboration and licensing arrangements include royalty payment obligations. For additional information on our royalty payments please read, Note 22, Commitments and Contingencies, to our consolidated financial statements included in our 2025 Form 10-K.
There have been no material changes in our contractual obligations, including those related to our other lease agreements, since December 31, 2025.
CONTINGENT CONSIDERATION RELATED TO BUSINESS COMBINATIONS
In connection with our acquisition of HI-Bio in July 2024 we may make additional payments based upon the achievement of certain milestone events. We recognized the contingent consideration obligations associated with this acquisition at its fair value on the acquisition date and we revalue this obligation each reporting period. We may pay up to approximately $350.0 million in remaining milestones related to this acquisition.
For additional information on our acquisition of HI-Bio, please read Note 2, Acquisitions, to our consolidated financial statements included in our 2025 Form 10-K.
CONTINGENT DEVELOPMENT, REGULATORY AND COMMERCIAL MILESTONE PAYMENTS
Based on our development plans as of March 31, 2026, we could make potential future milestone payments to third parties of up to approximately $6.6 billion, including approximately $0.9 billion in development milestones, approximately $0.8 billion in regulatory milestones and approximately $4.9 billion in commercial milestones, as part of our various collaborations, including licensing and development programs. Payments under these agreements
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generally become due and payable upon achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones was not considered probable as of March 31, 2026, such contingencies have not been recorded in our financial statements. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones.
If certain research milestones are met, we may pay up to approximately $65.5 million in additional milestones in 2026 under our current agreements, excluding opt-in payments.
OTHER FUNDING COMMITMENTS
As of March 31, 2026, we have several ongoing clinical studies in various clinical trial stages. Our most significant clinical trial expenditures are to CROs. The contracts with CROs are generally cancellable, with notice, at our option. We recorded accrued expense of approximately $39.3 million in our condensed consolidated balance sheets for expenditures incurred by CROs as of March 31, 2026. We have approximately $504.7 million in cancellable future commitments based on existing CRO contracts as of March 31, 2026.
TAX RELATED OBLIGATIONS
We exclude liabilities pertaining to uncertain tax positions from our summary of contractual obligations as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities. As of March 31, 2026, we have approximately $153.1 million of liabilities associated with uncertain tax positions.
NEW ACCOUNTING STANDARDS
For a discussion of new accounting standards please read Note 1, Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this report.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenue and expense and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and assumptions. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenue and expense. Actual results may differ from these estimates.
There have been no material changes to our critical accounting estimates since our 2025 Form 10-K. For a discussion of our other critical accounting estimates, please read Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K.
Biogen Inc. published this content on April 29, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 29, 2026 at 10:48 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]