BIOGEN INC.

(unaudited)

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

Business Overview

Biogen is a global biopharmaceutical company focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases. We are focused on advancing our pipeline, including significant late stage programs, in neurology, specialized immunology and rare diseases across multiple modalities. Our drug discovery and development efforts are supported by internal research and development programs, external collaborations and acquisitions of businesses and assets.

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; QALSODY for the treatment of ALS; SYFOVRE for the treatment of GA; and EMPAVELI for the treatment of PNH, C3G and primary IC-MPGN.

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 current and other potential anti-CD20 therapies, pursuant to our collaboration arrangements with Genentech, a wholly owned member of the Roche Group. Under the collaboration arrangements, we currently recognize revenue from the following products: OCREVUS, GAZYVA, RITUXAN, RITUXAN HYCELA, LUNSUMIO and COLUMVI.

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 these unaudited condensed consolidated financial statements (condensed consolidated financial statements).

Basis of Presentation

In the opinion of management, our condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair statement of our financial statements for interim periods in accordance with U.S. GAAP. The information included in this quarterly report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and the accompanying notes included in our 2025 Form 10-K. Our accounting policies are described in the Notes to Consolidated Financial Statements in our 2025 Form 10-K and updated, as necessary, in this report. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the operating results for the full year or for any other subsequent interim period.

We operate asone operating segment, focused on discovering, developing and delivering innovative therapies for people living with serious and complex diseases.

Consolidation

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

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

Use of Estimates

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

Significant Accounting Policies

There have been no material changes to our significant accounting policies disclosed in Note 1, Summary of Significant Accounting Policies, to our audited consolidated financial statements included in our 2025 Form 10-K.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that we adopt as of the specified effective date. Unless otherwise discussed below, we do not believe that the adoption of recently issued standards have had, or may have, a material impact on our condensed consolidated financial statements or disclosures.

Apellis Pharmaceuticals, Inc.

On May 14, 2026, we completed the acquisition of all of the issued and outstanding shares of Apellis, 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 acquisition we acquired 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, 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, specialized immunology products to our growth portfolio.

Under the terms of this acquisition, Apellis shareholders were entitled to $41.00 in cash for each issued and outstanding Apellis share, which totaled approximately $5.3 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 per share in cash, subject to the achievement of specified annual global net sales thresholds for SYFOVRE. In addition, the total purchase price included approximately $70.7 million of future consideration attributable to pre-acquisition services.

We funded this acquisition of Apellis with available cash and marketable securities on hand, supplemented by the issuance of a $2.0 billion term loan under our 2026 Term Loan and a $400.0 million drawdown from our revolving credit facility.

For additional information on our 2026 Term Loan, please read Note 12, Indebtedness, to these condensed consolidated financial statements.

We accounted for this acquisition as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, and recorded assets acquired and liabilities assumed at their respective fair values as of the acquisition date.

Purchase Price Consideration

Total consideration transferred for the acquisition of Apellis is summarized as follows:

(1) Contingent consideration represents the fair value of CVRs that are subject to the achievement of specified annual global net sales thresholds for SYFOVRE.

Apellis Compensation Expense: In connection with our acquisition, we converted Apellis's outstanding unvested equity awards into cash awards totaling $416.3 million. These awards will vest over the remaining requisite service periods of the original awards and are payable only if the applicable service conditions are satisfied, unless accelerated under specified termination provisions.

Of the total $416.3 million, approximately $70.7 million was attributable to pre-acquisition services and is therefore reflected as a component of total purchase price paid. The remaining $345.6 million is attributable to the post-acquisition service period, of which approximately $116.0 million was recognized at transaction close for employees who were immediately terminated upon the acquisition close date. The remaining cash awards will be recognized over the employees' remaining service vesting period; if any of these employees are terminated subsequent to the acquisition date and prior to the estimated service vesting period, all compensation expense not previously recognized will be accelerated due to a double-trigger provision, resulting in immediate recognition.

Preliminary Purchase Price Allocation

The following table summarizes the preliminary purchase price allocation of the separately identifiable assets acquired and liabilities assumed as of May 14, 2026:

Inventory: Total inventory acquired was approximately $712.0 million, which reflects a step-up in the fair value of finished goods and work-in-process inventory for SYFOVRE and EMPAVELI. The fair value was determined based on the estimated selling price of the inventory, less the remaining manufacturing and selling costs and a normal profit margin on those manufacturing and selling efforts. The fair value step-up adjustment will be amortized to cost of sales within our condensed consolidated statements of income when the inventory is sold, which is expected to be within approximately 3 years from the acquisition date.

Intangible assets: Intangible assets are comprised of $2.4 billion related to EMPAVELI commercialization rights in the U.S., $1.9 billion related to SYFOVRE commercialization rights and $380.0 million related to royalty rights associated with Sobi sales of EMPAVELI outside the U.S. under the brand name ASPAVELI. The estimated fair values of the program related intangible assets were determined using the multi-period excess earnings method and discounted cash flow method, forms of the income approach, and a discount rate of 13.25%. These fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 fair value measurements.

The more significant assumptions utilized in our asset valuations related to commercialization rights included the estimated net cash flows for each year for each asset, including total revenue, cost of sales, research and development and other operating expense, the potential regulatory and commercial success risks, as well as other factors.

The more significant assumptions utilized in our asset valuation related to royalty rights included our estimated timing and volume of ASPAVELI sales by Sobi outside the U.S.

Senior secured term loan: In connection with our acquisition of Apellis we assumed responsibility for a senior secured term loan facility with Sixth Street Lending Partners of approximately $395.2 million, relating to the outstanding principal balance as of the acquisition date, accrued interest and prepayment fees incurred as a result of settling the term loan prior to its contractual maturity. We funded a post-close repayment of the senior secured term loan facility prior to its contractual maturity. As of June 30, 2026, the senior secured term loan was paid in full.

Convertible notes: In connection with our acquisition of Apellis we assumed the obligation for outstanding convertible notes of approximately $101.5 million, that upon the close of the acquisition would allow holders the option to convert notes into cash consideration. As of June 30, 2026, the outstanding convertible notes were paid in full with the exception of a de minimis amount. Our subsequent repayment represented a post-acquisition debt extinguishment.

Goodwill: Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. We recognized goodwill of approximately $501.5 million, which is not deductible for tax purposes. The goodwill recognized from our acquisition of Apellis is primarily the result of the deferred tax consequences from the transaction recorded for financial statement purposes.

Acquisition-related expense: Acquisition-related expense, which was comprised primarily of regulatory, advisory and legal fees, and other transaction costs, totaled approximately $27.0 million and $30.8 million for the three and six months ended June 30, 2026, respectively, and are included within selling, general and administrative expense within our condensed consolidated statements of income.

Assumptions in the Allocations of Purchase Price

The results of operations of Apellis, along with the estimated fair values of the assets acquired and liabilities assumed in the Apellis acquisition, have been included in our condensed consolidated financial statements since the closing of the Apellis acquisition on May 14, 2026.

The Apellis operations had an immaterial impact to our results of operations for the three and six months ended June 30, 2026. Due to the immateriality of Apellis' revenues and expenses, additional pro forma information combining the results of operations of Biogen and Apellis have not been included.

Our preliminary estimate of the fair value of the specifically identifiable assets acquired and liabilities assumed as of the date of acquisition is subject to the finalization of management's analysis related to certain matters, including finalizing our assessment of the intangible assets, inventory, R&D programs, goodwill, leases, contingencies, and income taxes. The final determination of these fair values will be completed as additional information becomes available but no later than one year from the acquisition date. The final determination may result in asset and liability fair values that are different from the preliminary estimates.

TJ Biopharma (Hangzhou) Co., Ltd.

In April 2026 we entered into an asset purchase agreement with TJ Biopharma (Hangzhou) Co., Ltd. to acquire TJ Bio's exclusive rights to felzartamab in the greater China region. With this agreement, we 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 was recorded in acquired in-process research and development, upfront and milestone expense within our condensed consolidated statements of income for the three and six months ended June 30, 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 (a wholly-owned subsidiary of Novartis) and may pay MorphoSys tiered royalties on potential net sales of felzartamab in the greater China region.

Alcyone Therapeutics, Inc.

In November 2025 we completed the acquisition of all of the issued and outstanding shares of Alcyone Therapeutics, Inc., a clinical-stage biotechnology company focused on pediatric care through precision CNS therapeutics and dosing platforms. The lead asset acquired is ThecaFlex DRx, an implantable subcutaneous port and catheter device being investigated for the intrathecal delivery of ASOs, including SPINRAZA.

Total consideration for this transaction of approximately $85.0 million was recorded in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025, and included a $35.0 million payment that was considered probable as of December 31, 2025, and made upon FDA approval of a supplemental application in January 2026.

We may pay additional development and regulatory milestone payments to the former shareholders of Alcyone of up to a total of $75.0 million if approval is received for ThecaFlex DRx administration of SPINRAZA or other additional pipeline products.

We accounted for this transaction as an asset acquisition as the value being acquired primarily relates to a single asset. Under the terms of this acquisition, we will oversee the end-to-end development, manufacturing and commercialization of ThecaFlex DRx.

Alcyone's remaining therapeutic assets were divested from Alcyone into Neela Therapeutics, Inc., a newly formed independent company, prior to the closing of this acquisition.

RayThera Inc.

In June 2026 we entered into a definitive agreement to acquire all of the issued and outstanding shares of RayThera Inc., a private biotechnology company focused on discovering and developing small molecule therapies in immunology. RayThera's portfolio includes a lead program which entered Phase 1 development during the third quarter of 2026 and other anti-inflammatory assets that could potentially treat immune-mediated conditions across a range of indications.

We have agreed to pay an upfront cash payment of $225.0 million upon closing, plus additional potential amounts payable upon the achievement of future clinical and regulatory milestones totaling $775.0 million.

We plan to account for this proposed acquisition as an asset acquisition as the value being acquired primarily relates to the lead program and will record the upfront payment in acquired in-process research and development, upfront and milestone expense within our condensed consolidated statements of income upon the completion of this proposed acquisition. We anticipate the proposed acquisition to close during the third quarter of 2026, subject to the satisfaction of customary closing conditions. Under the terms of this proposed acquisition, we will lead future development, manufacturing and global commercialization efforts.

The proposed acquisition excludes certain preclinical assets, which will be divested from RayThera into a newly formed independent company prior to the expected closing of this acquisition.

Sale of TOFIDENCE

In March 2025 we completed the sale of our regulatory and commercial rights in the U.S. for TOFIDENCE, a tocilizumab biosimilar referencing ACTEMRA, to Organon. Under the terms of this transaction, we received a payment of approximately $51.0 millionin July 2025 and recognized a de minimis loss within our condensed consolidated statements of income for the six months ended June 30, 2025.

Apellis Integration

Following the closing of the Apellis acquisition, we implemented an integration plan designed to realize operating synergies through cost savings and avoidance. For the three and six months ended June 30, 2026, we recognized approximately $153.2 million of net pre-tax restructuring charges, primarily consisting of employee severance costs and the acceleration of bonus payments that were subject to a double-trigger provision.

Restructuring Reserve

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 six months ended June 30, 2025, we recorded approximately $34.2 million in restructuring charges related to severance costs from our Fit for Growth program within restructuring charges in our condensed consolidated statements of income.

Restructuring Reserve

Charges and spending related to workforce reductions are summarized as follows:

Product Revenue

Revenue by product is summarized as follows:

(1)EMPAVELI and SYFOVRE were obtained as part of our acquisition of Apellis in May 2026.

(2) In the fourth quarter of 2025 we completed the sale of our rights to BYOOVIZ.

(3) Other includes FUMADERM.

(1) Effective January 1, 2025, our collaboration and license agreement for FAMPYRA global commercialization rights was terminated.

(2) EMPAVELI and SYFOVRE were obtained as part of our acquisition of Apellis in May 2026.

(3) In 2025 we completed the sale of our rights to TOFIDENCE and BYOOVIZ.

(4) Other includes FUMADERM and ADUHELM.

We recognized revenue from three wholesalers accounting for 29.9%, 16.5% and 10.9%, respectively of gross product revenue for the three months ended June 30, 2026, and 28.7%,15.7% and 9.8%, respectively of gross product revenue for the six months ended June 30, 2026.

We recognized revenue fromtwo wholesalers accounting for 28.2% and 15.8% of gross product revenue for the three months ended June 30, 2025, and 27.1% and 15.0% of gross product revenue for the six months ended June 30, 2025.

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

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

Revenue from Anti-CD20 Therapeutic Programs

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

For additional information on our collaboration arrangements with Genentech, please read Note 18, Collaborative and Other Relationships, to these condensed consolidated financial statements.

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 and six months ended June 30, 2026, we recognized Alzheimer's collaboration revenue of approximately $63.7 million and $123.2 million, respectively, compared to $54.9 million and $87.9 million, respectively, in the prior year comparative periods.

For additional information on our collaboration arrangements with Eisai, please read Note 18, Collaborative and Other Relationships, to these condensed consolidated financial statements.

Contract Manufacturing, Royalty and Other Revenue

Contract manufacturing, royalty and other revenue is summarized as follows:

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.

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, including arrangements with Sobi that we inherited through our acquisition of Apellis.

For additional information on our arrangements with Samsung Bioepis, Eisai and Sobi, please read Note 18, Collaborative and Other Relationships, to these condensed consolidated financial statements.

The components of inventory are summarized as follows:

Long-term inventory is included in investments and other assets within our condensed consolidated balance sheets.

As a result of our acquisition of Apellis in May 2026, we recorded approximately $712.0 million of acquired inventory related to SYFOVRE and EMPAVELI, inclusive of fair value step-up adjustments related to the acquired inventory of SYFOVRE and EMPAVELI totaling approximately $567.5 million. We expect these amounts to be fully amortized by the end of 2029. For the three and six months ended June 30, 2026, amortization from the fair value step-up adjustments, which was recorded as a component of cost of sales within our condensed consolidated statements of income, was approximately $69.7 million. For additional information on our acquisition of Apellis, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

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 of approximately $1.3 billion. We expect this amount to be fully amortized by the end of 2028. For the three and six months ended June 30, 2026, amortization from the fair value step-up adjustment was approximately $133.1 million and $240.7 million, respectively, compared to $52.5 million and $103.9 million, respectively, in the prior year comparative periods. For the three and six months ended June 30, 2026, amortization from the fair value step-up adjustment includes approximately $37.5 million and $94.3 million, respectively, of inventory used for clinical purposes, which is reflected in research and development expense within our condensed consolidated statements of income. 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.

These fair value step-up adjustments are being amortized to cost of sales as the inventory is sold or to research and development expense as the inventory is used for clinical purposes within our condensed consolidated statements of income.

Intangible Assets

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

Amortization and Impairments

For the threeand six months ended June 30, 2026, amortization and impairment of acquired intangible assets totaled $168.2 million and $304.7 million, compared to $130.9 million and $242.7 million, respectively, in the prior year comparative periods.

For the threeand six months ended June 30, 2026, amortization of acquired intangible assets, excluding impairment charges, totaled $168.2 million and $304.7 million, respectively, compared to $127.4 million and $239.2 million, respectively in the prior year comparative periods. The increases were primarily due to higher rates of amortization for the acquired intangible assets associated with SKYCLARYS. Additionally, we recorded$22.6 million of amortization for the acquired intangible assets as part of our acquisition of Apellis forthe three andsix months ended June 30, 2026.

For thethree andsix months ended June 30, 2026, we hadno impairment charges. For thethree andsix months ended June 30, 2025, amortization and impairment of acquired intangible assets reflect the impact of a $3.5 million impairment charge related to a compound acquired from HI-Bio.

Completed Technology

Completed technology primarily relates to our other marketed products and programs acquired through asset acquisitions, licenses and business combinations. In connection with our acquisition of Apellis we acquired completed technology with an estimated fair value of approximately $4.6 billion, comprised of $2.4 billion related to EMPAVELI commercialization rights in the U.S., $1.9 billion related to SYFOVRE commercialization rights and $380.0 million related to royalty rights associated with Sobi sales of EMPAVELI outside the U.S. under the brand name ASPAVELI.

Completed technology intangible assets are amortized over their estimated useful lives, which range between approximately 1 to 30 years, with a remaining weighted average useful life of 13 years as of June 30, 2026.

Estimated Future Amortization of Intangible Assets

The estimated future amortization of finite-lived intangible assets for the next five years is expected to be as follows:

Goodwill

The following table provides a rollforward of the changes in our goodwill balance:

(1) Other includes adjustments related to foreign currency exchange rate fluctuations.

For additional information on our acquisition of Apellis, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

As of June 30, 2026, we hadno impairment losses related to goodwill.

The tables below present information about our assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques we utilized to determine such fair value:

(1)Convertible notes includes a $30.0 million convertible note we invested in City Therapeutics as part of our strategic research arrangement with the company during 2025, as well as a $5.0 million convertible note we invested into Neela Therapeutics, Inc. during 2025. We elected the fair value option for both convertible notes. For additional information on the arrangement with City Therapeutics, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2025 Form 10-K.

(1)Convertible notes includes a $30.0 million convertible note we invested in City Therapeutics as part of our strategic research arrangement with the company during 2025, as well as a $5.0 million convertible note we invested into Neela Therapeutics, Inc. during 2025. We elected the fair value option for both convertible notes. For additional information on the arrangement with City Therapeutics, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2025 Form 10-K.

Our marketable equity securities represent investments in publicly traded equity securities. Our ability to liquidate our investment in Denali may be limited by the size of our interest, the volume of market-related activity, our concentrated level of ownership and potential restrictions resulting from our status as a collaborator. Therefore, we may realize significantly less than the current value of such investments. For additional information on our investment in Denali common stock, please read Note 9, Financial Instruments, and Note 17, Other Consolidated Financial Statement Detail, to these condensed consolidated financial statements.

There have beenno material impairments of our assets measured and carried at fair value nor changes to our valuation techniques as of June 30, 2026 and December 31, 2025.

For a description of our validation procedures related to prices provided by third-party pricing services and our option pricing valuation model, please read Note 1, Summary of Significant Accounting Policies - Fair Value Measurements, to our consolidated financial statements included in our 2025 Form 10-K.

Level 3 Assets and Liabilities Held at Fair Value

The following tables present quantitative information, as of the dates indicated, about the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 financial assets and liabilities measured at fair value on a recurring basis:

The weighted average discount rates were calculated based on the relative fair values of each distinct contingent consideration obligation related to our acquisition of HI-Bio in July 2024. In addition, we apply various probabilities of technological and regulatory success to the valuation models to estimate the fair values of these contingent consideration obligations, which ranged from approximately 75.0% to approximately 95.0% as of June 30, 2026.

There were no transfers of assets or liabilities into or out of Level 3 as of June 30, 2026 and December 31, 2025.

Contingent Consideration Obligations

In connection with our acquisition of HI-Bio in July 2024 and our acquisition of Apellis in May 2026 we agreed to make additional payments based upon the achievement of certain milestone events. The following table provides a roll forward of the fair value of our contingent consideration obligations, which were classified as Level 3 measurements:

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. The fair values of the contingent consideration liabilities were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs. For additional information on the valuation techniques and inputs utilized in the valuation of our financial assets and liabilities, please read Note 1, Summary of Significant Accounting Policies, to our consolidated financial statements included in our 2025 Form 10-K.

As of June 30, 2026 and December 31, 2025, contingent consideration liabilities of $273.5 million and $246.4 million, respectively, were classified as long-term and reflected as a component of other long-term liabilities in our condensed consolidated balance sheets.

For the three andsix months ended June 30, 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 related to our acquisition of HI-Bio, and the recognition of a $4.1 million obligation related to the acquisition of Apellis.

During the second quarter of 2025 the first milestone related to the fourth patient dosed in a phase 3 clinical trial of felzartamab for AMR was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio, which was paid during the third quarter of 2025. In October 2025 the second milestone related to the fourth patient dosed in a phase 3 clinical trial of felzartamab for IgAN was achieved, resulting in a $150.0 million milestone payment made to the former shareholders of HI-Bio during the fourth quarter of 2025.

Financial Instruments Not Carried at Fair Value

Other Financial Instruments

Due to the short-term nature of certain financial instruments, the carrying value reflected in our condensed consolidated balance sheets for current accounts receivable, due from anti-CD20 therapeutic programs, other current assets, accounts payable and accrued expense and other, approximates fair value.

Debt Instruments

The fair and carrying values of our debt instruments, which are Level 2 liabilities, are summarized as follows:

(1)In connection with our acquisition of Apellis we drew$2.0 billion from the 2026 Term Loan, comprised of a $1.0 billion floating rate 364-day tranche and a $1.0 billion floating rate two-year tranche. For additional information on our 2026 Term Loan, please read Note 12, Indebtedness, to these condensed consolidated financial statements.

The fair values of each of our series of Senior Notes were determined through market, observable and corroborated sources. The changes in the fair values of our Senior Notes as of June 30, 2026, compared to December 31, 2025, are primarily related to increases in U.S. treasury yields, partially offset by lower credit spreads used to value our Senior Notes since December 31, 2025. For additional information related to our Senior Notes, please read Note 13, Indebtedness, to our consolidated financial statements included in our 2025 Form 10-K.

The following table summarizes our financial assets with maturities of less than 90 days from the date of purchase included in cash and cash equivalents in our condensed consolidated balance sheets:

The carrying values of our money market funds, overnight reverse repurchase agreements, short-term debt securities and commercial paper, including accrued interest, approximate fair value due to their short-term maturities.

Our marketable equity securities gains (losses) are recorded in other (income) expense, net in our condensed consolidated statements of income. The following tables summarize our marketable debt and equity securities, classified as available-for-sale:

Summary of Contractual Maturities: Available-for-Sale Debt Securities

The estimated fair value and amortized cost of our marketable debt securities classified as available-for-sale by contractual maturity are summarized as follows:

We funded our Apellis acquisition through available cash, cash equivalents and marketable securities. As of June 30, 2026, we have sold all of our marketable debt securities. For additional information on our acquisition of Apellis, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

Proceeds from Marketable Debt Securities

The proceeds from maturities and sales of marketable debt securities and any resulting realized gains and losses are summarized as follows:

Realized losses for the three andsix months ended June 30, 2026, primarily relate to sales of corporate bonds.

Strategic Investments

Our strategic investment portfolio includes investments in equity securities of certain biotechnology companies, which are reflected within our disclosures included in Note 8, Fair Value Measurements, to these condensed consolidated financial statements, as well as venture capital funds where the underlying investments are in equity securities of certain biotechnology companies and non-marketable equity securities.

As of June 30, 2026 and December 31, 2025, our strategic investment portfolio was comprised of investments totaling $248.7 million and $186.6 million, respectively, which are included in investments and other assets within our condensed consolidated balance sheets.

The increase in our strategic investment portfolio as of June 30, 2026, compared to December 31, 2025, was primarily due to the increase in the fair value of our investment in Denali common stock.

For additional information on our investments in Denali common stock, please read Note 8, Fair Value Measurements, and Note 17, Other Consolidated Financial Statement Detail, to these condensed consolidated financial statements.

Foreign Currency Forward Contracts - Hedging Instruments

Due to the global nature of our operations, portions of our revenue and operating expense are recorded in currencies other than the U.S. dollar. The value of revenue and operating expense measured in U.S. dollars is therefore subject to changes in foreign currency exchange rates. We enter into foreign currency forward contracts and foreign currency options with financial institutions with the primary objective to mitigate the impact of foreign currency exchange rate fluctuations on our international revenue and operating expense.

Foreign currency forward contracts and foreign currency options in effect as of June 30, 2026 and December 31, 2025, had durations of 1 to 18 months and 1 to 21 months, respectively. These contracts have been designated as cash flow hedges and unrealized gains and losses on the portion of these foreign currency forward contracts and foreign currency options that are included in the effectiveness test are reported in AOCI. Realized gains and losses of such contracts and options are recognized in revenue when the sale of product in the currency being hedged is recognized and in operating expense when the expense in the currency being hedged is recorded. We recognize all cash flow hedge reclassifications from AOCI and fair value changes of excluded portions in the same line item in our condensed consolidated statements of income that have been impacted by the hedged item.

The notional amount of foreign currency forward contracts and foreign currency options that were entered into to hedge forecasted revenue and operating expense is summarized as follows:

The pre-tax portion of the fair value of these foreign currency forward contracts and foreign currency options that were included in AOCI in total equity is summarized as follows:

We expect net unrealized gains of approximately$3.1 million to be settled over the next 18 months, of which approximately$1.7 millionof net unrealized losses are expected to be settled over the next 12 months, with any amounts in AOCI to be reported as an adjustment to revenue or operating expense. 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 contractual obligations. As of June 30, 2026 and December 31, 2025, credit risk did not materially change the fair value of our foreign currency forward contracts and forward currency options.

The following tables summarize the effect of foreign currency forward contracts and forward currency options designated as hedging instruments in our condensed consolidated statements of income:

Foreign Currency Forward Contracts - Other Derivative Instruments

We also enter into other foreign currency forward contracts, usually with durations of one month or less, to mitigate the foreign currency risk related to certain balance sheet positions. We have not elected hedge accounting for these transactions.

The aggregate notional amount of these outstanding foreign currency forward contracts was $1,193.3 million and $1,193.7 million as of June 30, 2026 and December 31, 2025, respectively. Net losses of $11.2 million and $30.0 million related to these contracts were recorded as a component of other (income) expense, net for the three and six months ended June 30, 2026, compared to net gains of $27.7 million and $35.4 million, respectively, in the prior year comparative periods.

Summary of Derivative Instruments

While certain of our derivative instruments are subject to netting arrangements with our counterparties, we do not offset derivative assets and liabilities in our condensed consolidated balance sheets. The amounts in the table below would not be substantially different if the derivative assets and liabilities were offset.

The following table summarizes the fair value and presentation in our condensed consolidated balance sheets of our outstanding derivative instruments, including those designated as hedging instruments:

Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. Accumulated depreciation on property, plant and equipment was $3.1 billion and $2.9 billion as of June 30, 2026 and December 31, 2025, respectively. For the three and six months ended June 30, 2026, depreciation expense totaled approximately $67.9 million and $135.8 million, respectively, compared to $66.9 million and $138.3 million, respectively, in the prior year comparative periods.

2026 Term Loan Credit Agreement

In connection with our acquisition of Apellis we entered into a $2.0 billion term loan credit agreement. On the closing date of the Apellis acquisition we drew $2.0 billion from the 2026 Term Loan, comprised of a $1.0 billion floating rate 364-day tranche and a $1.0 billion floating rate two-year tranche. As of June 30, 2026, we had $1.8 billion outstanding under the term loan credit agreement, of which $800.0 million was outstanding under the 364-day tranche and $1.0 billion outstanding under the two-year tranche.

2025 Senior Notes

On May 12, 2025, we issued senior unsecured notes for an aggregate principal amount of $1.75 billion, consisting of the following:

•$400.0 million of 5.050% Senior Notes due January 15, 2031, valued at 99.981% of par;

•$650.0 million of 5.750% Senior Notes due May 15, 2035, valued at 99.924% of par; and

•$700.0 million of 6.450% Senior Notes due May 15, 2055, valued at 99.657% of par.

Our 2025 Senior Notes are senior unsecured obligations and may be redeemed at our option at any time at 100% of the principal amount plus accrued interest and, until a specified period before maturity, a specified make-whole amount. Our 2025 Senior Notes contain a change-of-control provision that, under certain circumstances, may require us to purchase our 2025 Senior Notes at a price equal to 101% of the principal amount plus accrued and unpaid interest to the date of repurchase.

We incurred approximately $13.9 million of costs associated with this offering which have been recorded as a reduction to the carrying amount of the debt on our condensed consolidated balance sheets. These costs will be amortized as additional interest expense using the effective interest rate method over the period from issuance through maturity. The discounts will be amortized as additional interest expense over the period from issuance through maturity using the effective interest rate method.

Interest on our 2031 Senior Notes is payable January 15 and July 15 of each year, commencing January 15, 2026. Interest on our 2035 Senior Notes and 2055 Senior Notes is payable May 15 and November 15 of each year, commencing on November 15, 2025.

4.050% Senior Notes due September 15, 2025

On September 15, 2015, we issued $1.75 billion aggregate principal amount of 4.050% Senior Notes due September 15, 2025, at 99.764% of par. In June 2025 we used the net proceeds from the sale of our 2025 Senior Notes to redeem our 4.050% Senior Notes due September 15, 2025, prior to maturity. No gain or loss was recognized upon redemption.

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. We borrowed $400.0 million under our revolving credit facility during the second quarter of 2026 and this borrowing was repaid in full in June 2026. As of June 30, 2026 and December 31, 2025, we hadno outstanding borrowings and were in compliance with all covenants under this facility.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in AOCI, net of tax by component:

The following table summarizes the amounts reclassified from AOCI:

Basic and diluted shares outstanding used in our earnings per share calculation are calculated as follows:

Amounts excluded from the calculation of net income per diluted share because their effects were anti-dilutive were insignificant.

Share-based Compensation Expense

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

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

Tax Rate

For the three and six months ended June 30, 2026, our effective tax rate was 26.4% and 18.3%, respectively, compared to 14.7% and 17.0%, respectively, in the prior year comparative periods. The increase in our effective tax rate for the three months ended June 30, 2026 was primarily driven by non-deductible expenses related to our Apellis acquisition and, to a lesser extent, the favorable deferred tax impacts of decreases in foreign withholding taxes recorded in the second quarter of 2025. The six months ended June 30, 2026, compared to the same period in 2025, also reflects favorable impacts of a current year settlement of a foreign tax audit and the vesting of certain share-based awards.

Accounting for Uncertainty in Income Taxes

We and our subsidiaries are routinely examined by various taxing authorities. We file income tax returns in various U.S. states and in U.S. federal and other foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal tax examination for years before 2022 or state, local or non-U.S. income tax examinations for years before 2013.

It is reasonably possible that we will adjust the value of our uncertain tax positions related to certain transfer pricing, collaboration matters, withholding taxes and other issues as we receive additional information from various taxing authorities, including reaching settlements with such authorities.

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.

Other (Income) Expense, Net

Components of other (income) expense, net, are summarized as follows:

The (gains) losses on investments, net, as reflected in the table above, relate to debt securities, equity securities of certain biotechnology companies, venture capital funds where the underlying investments are in equity securities of certain biotechnology companies and non-marketable equity securities.

The following table summarizes our (gains) losses on investments, net that relate to our equity securities held during the following periods:

The net unrealized gains recognized during the three months ended June 30, 2026, primarily reflect an increase in the aggregate fair value of our investment in Denali common stock of approximately $46.7 million.

The net unrealized gains recognized during the three months ended June 30, 2025, primarily reflect an increase in the aggregate fair value of our investments in Sage and Denali common stock of approximately $10.1 million. Sage was later disposed of during the third quarter of 2025.

The net unrealized gains recognized during the six months ended June 30, 2026, primarily reflect an increase in the aggregate fair value of our investment in Denali common stock of approximately $65.9 million.

The net unrealized losses recognized during the six months ended June 30, 2025, primarily reflect a decrease in the aggregate fair value of our investments in Denali common stock of approximately $45.7 million, partially offset by an increase in the fair value of Sage common stock of approximately $23.0 million. Sage was later disposed of during the third quarter of 2025.

Other Current Assets

Other current assets includes prepaid taxes of $648.9 million and $693.6 million as of June 30, 2026 and December 31, 2025, respectively.

Accrued Expense and Other

Accrued expense and other consists of the following:

For additional information on our acquisition of Apellis, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

Other Long-term Liabilities

Other long-term liabilities were $820.9 million and $748.5 million as of June 30, 2026 and December 31, 2025, respectively, and included accrued income taxes totaling $177.5 million and $166.4 million, respectively.

Genentech, Inc. (Roche Group)

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. For purposes of this footnote, we refer to RITUXAN and RITUXAN HYCELA collectively as RITUXAN.

RITUXAN

Under our collaboration with Genentech, we are entitled to a tiered share of co-promotion operating profits and losses of RITUXAN in the U.S., as summarized in the table below. Genentech and its affiliates are responsible for the worldwide manufacture of RITUXAN as well as all development and commercialization activities as follows:

•U.S.: We have co-exclusively licensed our rights to develop, commercialize and market RITUXAN in the U.S.

•Canada: We have co-exclusively licensed our rights to develop, commercialize and market RITUXAN in Canada.

GAZYVA

The Roche Group and its sub-licensees maintain sole responsibility for the development, manufacture and commercialization of GAZYVA and we are entitled to a tiered share of co-promotion operating profits and losses of GAZYVA in the U.S. The level of gross sales of GAZYVA in the U.S. has impacted our percentage of the co-promotion profits for RITUXAN and LUNSUMIO, as summarized in the table below.

OCREVUS

Pursuant to the terms of our collaboration arrangements with Genentech, we receive a tiered royalty on U.S. net sales from 13.5% and increasing up to 24.0% if annual net sales exceed $900.0 million. There will be a 50.0% reduction to these royalties upon the first entry of an FDA-approved biosimilar to OCREVUS.

In addition, we receive a gross 3.0% royalty on net sales of OCREVUS outside the U.S., with the royalty period lasting 11 years from the first commercial sale of OCREVUS on a country-by-country basis.

The commercialization of OCREVUS does not impact the percentage of the co-promotion profits we receive for RITUXAN, LUNSUMIO or GAZYVA. Genentech is solely responsible for development and commercialization of OCREVUS and funding future costs. Genentech cannot develop OCREVUS in CLL, non-Hodgkin's lymphoma or rheumatoid arthritis.

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.

LUNSUMIO

Under our collaboration with Genentech, we are entitled to a tiered share of co-promotion operating profits and losses in the U.S., as summarized in the table below. In addition, we receive low-single digit royalties on sales of LUNSUMIO outside the U.S.

COLUMVI

Genentech has sole decision-making rights on the commercialization of COLUMVI within the U.S. and we receive tiered royalties in the mid-single digit range on net sales of COLUMVI in the U.S. The commercialization of COLUMVI does not impact the percentage of the co-promotion profits we receive for RITUXAN, LUNSUMIO or GAZYVA.

Profit-sharing Formulas

RITUXAN and LUNSUMIO Profit Share

Our current pre-tax co-promotion profit-sharing formula for RITUXAN and LUNSUMIO in the U.S. provides for a 30.0% share on the first $50.0 million of combined co-promotion operating profits earned each calendar year. Our share of the combined annual co-promotion profits for RITUXAN and LUNSUMIO in excess of $50.0 million varies upon the following events, as summarized in the table below:

In March 2023 the First Threshold Date was achieved when U.S. gross sales of GAZYVA within a consecutive 12-month period reached $500.0 million. As a result, beginning in April 2023 the pre-tax profit share for RITUXAN and LUNSUMIO has been 35.0%. The Second Threshold Date would be achieved on the first date in any calendar year in which U.S. gross sales of LUNSUMIO have reached $350.0 million.

GAZYVA Profit Share

Our current pre-tax profit-sharing formula for GAZYVA provides for a 35.0% share of operating profits earned in the U.S. in each calendar year.

For additional information on our collaboration arrangements with Genentech, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2025 Form 10-K.

Ionis Pharmaceuticals, Inc.

2018 Ionis Agreement

In the second quarter of 2026 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize a pre-clinical therapy under this agreement. In connection with the option exercise, we made a payment of $15.0 million to Ionis, which was recorded in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for thethree and six months ended June 30, 2026.

2017 SMA Collaboration Agreement

In December 2017 we entered into a collaboration agreement with Ionis to identify new ASO drug candidates for the potential treatment of SMA. Under this agreement, we have options to license therapies arising out of this collaboration and will be responsible for the development and commercialization of such therapies.

In December 2021 we exercised our option with Ionis and obtained a worldwide, exclusive, royalty-bearing license to develop and commercialize salanersen (BIIB115), an investigational ASO in development for SMA.

In the second quarter of 2026 we recognized and paid a $45.0 million milestone payment due upon the initiation of a Phase 3 trial in salanersen, which was recorded in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for thethree and six months ended June 30, 2026. Additionally, we may pay Ionis up to $110.0 million in additional development and regulatory milestone payments related to this program. Upon commercialization, we may also pay Ionis up to $400.0 million in additional performance-based milestone payments and tiered royalties on potential net sales of such therapies ranging from the mid-teens to high-twenties percentages.

For additional information on our collaboration arrangements with Ionis, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2025 Form 10-K.

Eisai Co., Ltd.

LEQEMBI (lecanemab) Collaboration

We have a collaboration agreement with Eisai to jointly develop and commercialize LEQEMBI (lecanemab), an anti-amyloid antibody for the treatment of Alzheimer's disease. The FDA granted traditional approval of LEQEMBI in July 2023. Prior to receiving traditional approval, LEQEMBI had been granted accelerated approval by the FDA in January 2023, at which time it became commercially available in the U.S. Outside of the U.S., LEQEMBI is now approved in the E.U. (April 2025), Australia (September 2025), China (January 2024), Japan (September 2023) and other international markets. LEQEMBI monthly IV maintenance dosing for the treatment of early Alzheimer's disease was approved in the U.S. and China in January 2025 and September 2025, respectively, and LEQEMBI subcutaneous autoinjector (IQLIK) for weekly maintenance dosing and initiation dosing was approved in the U.S. in August 2025 and July 2026, respectively.

All costs, including research, development, sales and marketing expense, are shared equally between us and Eisai. We also share profits and losses equally. We currently have a supply agreement with Eisai to manufacture LEQEMBI drug substance and drug product through the end of 2031.

Subject to the limitations in the LEQEMBI Collaboration Agreement, Eisai has final decision-making authority on all matters relating to the collaboration and serves as the lead of LEQEMBI development and regulatory submissions globally. We co-commercialize and co-promote LEQEMBI with Eisai. The LEQEMBI Collaboration Agreement provides that each commercialization plan shall allocate the responsibilities for the activities under the plan in an equitable fashion taking into account Biogen's and Eisai's respective capabilities and provide a meaningful role for each party.

Upon commercialization of LEQEMBI in the U.S., we began recognizing our 50.0% share of LEQEMBI product revenue, net and cost of sales, including royalties, within Alzheimer's collaboration revenue in our condensed consolidated statements of income, as we are not the principal.

Our share of LEQEMBI sales and marketing expense and development expense are recorded within selling, general and administrative expense and research and development expense, respectively, within our condensed consolidated statements of income.

A summary of development and sales and marketing expense related to the LEQEMBI Collaboration is as follows:

Amounts receivable from Eisai related to the agreements discussed above were approximately $134.1 million and $90.2 million as of June 30, 2026 and December 31, 2025, respectively. Amounts payable to Eisai related to the agreements discussed above were approximately$92.5 million and $95.5 million as of June 30, 2026 and December 31, 2025, respectively.

For additional information on our collaboration arra ngements with Eisai, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2025 Form 10-K.

UCB

We have a collaboration agreement with UCB, effective November 2003, to jointly develop and commercialize dapirolizumab pegol, an anti-CD40L pegylated Fab, for the potential treatment of SLE and other future agreed indications. Either we or UCB may propose development of dapirolizumab pegol in additional indications. If the parties do not agree to add an indication as an agreed indication to the collaboration, we or UCB may, at the sole expense of the applicable party, pursue development in such excluded indication(s), subject to an opt-in right of the non-pursuing party after proof of clinical activity.

All costs incurred for agreed indications, including research, development, sales and marketing expense, are shared equally between us and UCB. If marketing approval is obtained, both companies will jointly commercialize dapirolizumab pegol and share profits and losses equally.

A summary of development expense related to the UCB collaboration agreement is as follows:

Supernus Pharmaceuticals, Inc. (previously Sage Therapeutics, Inc.)

In November 2020 we entered into a global collaboration and license agreement with Sage to jointly develop and commercialize ZURZUVAE (zuranolone) for the treatment of PPD. In July 2025 Sage was acquired by Supernus. ZURZUVAE was approved in the U.S. in August 2023 and in the E.U. in September 2025.

Under this collaboration, both companies will share equal responsibility and costs for development as well as profits and losses for commercialization in the U.S. Outside of the U.S., we are responsible for development and commercialization, excluding Japan, Taiwan and South Korea, with respect to zuranolone and may pay Supernus potential tiered royalties in the high-teens to low-twenties percentages.

We share 50.0% of the net collaboration results in the U.S. with Supernus, which are recognized in collaboration profit sharing/(loss reimbursement) in our condensed consolidated statements of income. For the three and six months ended June 30, 2026, we recognized net profit-sharing expense of approximately $23.9 million and $40.9 million, respectively, to reflect Supernus'50.0% share of the net collaboration results, compared to net profit-sharing expense of approximately $17.8 million and $27.9 million, respectively, in the prior year comparative periods.

A summary of development and sales and marketing expense related to the Supernus collaboration is as follows:

Denali Therapeutics Inc.

In August 2020 we entered into a collaboration and license agreement with Denali to co-develop and co-commercialize BIIB122, a small molecule inhibitor of LRRK2 for Parkinson's disease (LRRK2 Collaboration).

Under the LRRK2 Collaboration, both companies share responsibility and costs for global development based on specified percentages as well as profits and losses for commercialization in the U.S. and China. Outside the U.S. and China we are responsible for commercialization and may pay Denali potential tiered royalties.

In May 2026 Biogen and Denali announced topline results from the Phase 2b LUMA study evaluating BIIB122, which showed that BIIB122 did not meet its primary and secondary endpoints. Based on these results we and Denali will discontinue development of BIIB122 in idiopathic Parkinson's disease.

A summary of development expense related to the Denali collaboration is as follows:

Stoke Therapeutics, Inc.

In February 2025 we entered into a collaboration and license agreement with Stoke to co-develop and commercialize zorevunersen, an investigational ASO that targets the SCN1A gene for the potential treatment of Dravet syndrome, a rare form of genetic epilepsy associated with refractory seizures and neurodevelopmental impairments. Zorevunersen dosed its first patient in August 2025, advancing zorevunersen to a global Phase 3 trial.

Under the terms of this agreement, Stoke will continue to lead global development and retain exclusive development and commercialization rights for zorevunersen in the U.S., Canada and Mexico and we will have exclusive rights to commercialize zorevunersen in the rest of the world. Both companies will share responsibility for external clinical development costs, where Stoke is responsible for 70.0% of these development costs and we are responsible for the remaining 30.0% of these development costs.

In connection with the closing of this transaction we made an upfront payment of $165.0 million to Stoke, which was recognized in acquired in-process research and development, upfront and milestone expense within our condensed consolidated statements of income for the six months ended June 30, 2025. We may also pay Stoke potential development and commercial milestone payments of up to $50.0 million and $335.0 million, respectively, if all the specified milestones set forth in this collaboration are achieved. In addition, we may pay Stoke tiered royalties on potential net sales of any products developed under this collaboration in the low-double digit to high-teen percentages.

We also have an exclusive option to license certain future follow-on ASO products targeting the SCN1A gene in all territories worldwide other than the U.S., Canada and Mexico, in exchange for separate milestone, cost sharing and royalty considerations.

A summary of development expense related to the Stoke collaboration agreement is as follows:

Samsung Bioepis Co., Ltd.

2019 Development and Commercialization Agreement

In December 2019 we completed a transaction with Samsung Bioepis and secured the exclusive rights to commercializetwo potential ophthalmology biosimilar products, BYOOVIZ, a ranibizumab biosimilar referencing LUCENTIS, and OPUVIZ, an aflibercept biosimilar referencing EYLEA, in major markets worldwide, including the U.S., Canada, Europe, Japan and Australia. The agreement established that Samsung Bioepis will be responsible for development and will supply both products to us at a pre-specified gross margin of approximately 45.0%.

In October 2024 we notified Samsung Bioepis of our decision to terminate our 2019 Development and Commercialization Agreement (the DCA Agreement) solely within the U.S. and Canada. The transfer of commercialization rights for BYOOVIZ and OPUVIZ in the U.S. and Canada back to Samsung Bioepis was completed as of December 31, 2025.

In October 2025 we completed the sale of our remaining commercial rights to BYOOVIZ and OPUVIZ in Europe. Samsung Bioepis has full responsibility for commercialization of BYOOVIZ upon the transfer of commercial rights from Biogen back to Samsung Bioepis, which became effective as of January 2026.

We reflected revenue on sales of BYOOVIZ to third parties in product revenue, net in our condensed consolidated statements of income and recorded the related cost of revenue and sales and marketing expense in our condensed consolidated statements of income to their respective line items when these costs are incurred.

2013 Commercial Agreement

In December 2013 we entered into an agreement with Samsung Bioepis to commercialize, over a 10-year term, three anti-TNF biosimilar product candidates which includes IMRALDI, an adalimumab biosimilar referencing HUMIRA, FLIXABI, an infliximab biosimilar referencing REMICADE, and BENEPALI, an etanercept biosimilar referencing ENBREL, in Europe. In July 2024 we exercised an option to extend this agreement by an additional five years.

We reflect revenue on sales of BENEPALI, IMRALDI and FLIXABI to third parties in product revenue, net in our condensed consolidated statements of income and record the related cost of revenue and sales and marketing expense in our condensed consolidated statements of income to their respective line items when these costs are incurred. Royalty payments to AbbVie on sales of IMRALDI are recognized in cost of sales within our condensed consolidated statements of income.

We share 50.0% of the profit or loss related to our 2013 commercial agreement with Samsung Bioepis, which is recognized in collaboration profit sharing/(loss reimbursement) in our condensed consolidated statements of income. For thethree and six months ended June 30, 2026, we recognized net profit-sharing expense of approximately $44.9 million and $102.1 million, respectively, to reflect Samsung Bioepis'50.0% sharing of the net collaboration profits, compared to net profit-sharing expense of approximately $57.2 million and $105.2 million, respectively, in the prior year comparative periods.

Other Services

Simultaneous with the formation of Samsung Bioepis, we also entered into a license agreement with Samsung Bioepis. Under this license agreement, we granted Samsung Bioepis an exclusive license to use, develop, manufacture and commercialize biosimilar products created by Samsung Bioepis using Biogen product-specific technology. In exchange, we receive single-digit royalties on biosimilar products developed and commercialized by Samsung Bioepis. Royalty revenue under the license agreement is recognized as a component of contract manufa cturing, royalty and other revenue in our condensed consolidated statements of income.

Amounts receivable from Samsung Bioepis related to the agreements discussed above were approximately $3.5 million and $4.4 million as of June 30, 2026 and December 31, 2025, respectively. Amounts payable to

Samsung Bioepis related to the agreements discussed above were zero and approximately$42.7 million as of June 30, 2026 and December 31, 2025, respectively.

For additional information on our collaboration arrangements with Samsung Bioepis and our other significant collaboration arrangements, please read Note 19, Collaborative and Other Relationships, to our consolidated financial statements included in our 2025 Form 10-K.

Sobi

As part of our acquisition of Apellis, we have a collaboration and license agreement with Sobi to jointly develop and commercialize pegcetacoplan for use systemically or for local non-ophthalmological administration. Under the agreement, we have commercialization rights for EMPAVELI in the U.S. and Sobi has exclusive rights to commercialize pegcetacoplan as ASPAVELI in the rest of the world.

We supply pegcetacoplan to Sobi for development and for commercialization outside of the United States in accordance with a supply agreement between the parties.

Pursuant to the terms of our collaboration and license arrangement, as amended by a buy-down agreement entered into in July 2025 which reduces Sobi's royalty obligations by 90% subject to a defined cap, we are eligible to receive tiered royalties in the low single digits on net sales of ASPAVELI outside of the United States. If the defined cap is exceeded in a future period, the royalty terms in the original agreement will be reinstated, and we will earn royalties ranging from the high teens to high twenties on such net sales.

For the three and six months ended June 30, 2026, we recognized approximately $13.3 million in revenues from Sobi related to the agreements above, which are reflected as a component of contract manufacturing, royalty and other revenue in our condensed consolidated statements of income.

Other Research and Discovery Arrangements and Funding Arrangements

These arrangements may include the potential for future milestone payments based on the achievement of certain clinical and commercial development payable over a period of several years.

Alteogen Inc.

In March 2026 we entered into an exclusive license agreement with Alteogen Inc. to enable the development of a subcutaneous formulation of two biologics 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 six months ended June 30, 2026 and was paid during the second quarter of 2026.

Alteogen will also be eligible to receive a $10.0 million option payment if a second program is selected for development, as well as potential development, regulatory and commercial milestone payments and tiered royalties in the mid-single digit percentages on net sales of any combination products resulting from the collaboration.

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 plan to 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 six months ended June 30, 2026 and was 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.

Royalty Pharma Funding Arrangement

In February 2025 we entered into a funding agreement with Royalty Pharma under which we received $200.0 million in 2025 and $50.0 million in 2026 to co-fund our development costs for the litifilimab program. As there is a substantive transfer of risk to the financial partner for the amount invested, the development funding will be recognized by us as an obligation to perform contractual services. This funding was recognized as a reduction to research and development expense within our condensed consolidated statements of income, proportionate to the related expense. For the three and six months ended June 30, 2026, we received $25.0 million and $50.0 million, respectively, from Royalty Pharma, compared to $50.0 million and $100.0 million, respectively, in the prior year comparative periods. All funding has been received and the funding period has concluded as of June 30, 2026.

If the litifilimab clinical trials are successful for the indications based on the applicable clinical trials, upon regulatory approval in the U.S. or certain major markets in the world, Royalty Pharma will be eligible to receive approval-based fixed milestone payments of up to $250.0 million. The milestone payments due upon approval will be recorded as a component of other (income) expense, net within our condensed consolidated statements of income, when incurred.

If litifilimab receives regulatory approval, Royalty Pharma will be eligible to receive royalties of a mid-single digit percentage of the applicable net sales, which will be recorded as cost of sales within our condensed consolidated statements of income.

MorphoSys AG

As part of our acquisition of HI-Bio in July 2024, weacquired HI-Bio's pre-existing in-license commitments under third-party agreements with MorphoSys (a wholly-owned subsidiary of Novartis), which included tiered royalties on potential future net sales ranging from high-single digit to mid-teen percentages, as well as potential development, regulatory and commercial milestone payments of up to $130.0 million, $230.0 million and $640.0 million, respectively. These amounts included milestone payments due upon the first patient dosed in a Phase 3 clinical trial of felzartamab in a first and second indication of $35.0 million and $30.0 million, respectively, which were earned during the first and second quarters of 2025 and recorded within acquired in-process research and development, upfront and milestone expense.

In April 2026 we entered into a definitive agreement with TJ Bio, where 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.

Other

For thethree and six months ended June 30, 2026, we recorded approximately $4.0 million and $6.0 million, respectively, as acquired in-process research and development, upfront and milestone expense in our condensed consolidated statements of income related to other research and discovery related arrangements, compared to $16.6 million and $17.3 million, respectively, in the prior year comparative periods.

Unconsolidated Variable Interest Entities

We have relationships with various variable interest entities that we do not consolidate as we lack the power to direct the activities that significantly impact the economic success of these entities. These relationships include investments in certain biotechnology companies and research collaboration agreements.

As of June 30, 2026 and December 31, 2025, the carrying value of our investments in certain biotechnology companies representing potential unconsolidated variable interest entities totaled $48.4 million and $49.8 million, respectively. Our maximum exposure to loss related to these variable interest entities is limited to the carrying value of our investments.

We have also entered into research collaboration agreements with certain variable interest entities where we are required to fund certain development activities. These development activities are included in research and development expense in our condensed consolidated statements of income as they are incurred. We have provided no financing to these variable interest entities other than previous contractually required amounts.

For additional information on our investments in variable interest entities, please read Note 20, Investments in Variable Interest Entities, to our consolidated financial statements included in our 2025 Form 10-K.

We are currently involved in various claims, investigations and legal proceedings, including the matters described below. For information as to our accounting policies relating to claims and legal proceedings, including use of estimates and contingencies, please read Note 1, Summary of Significant Accounting Policies, to our consolidated financial statements included in our 2025 Form 10-K.

With respect to some loss contingencies, an estimate of the possible loss or range of loss cannot be made until management has further information, including, for example, (i) which claims, if any, will survive dispositive motion practice; (ii) information to be obtained through discovery; (iii) information as to the parties' damages claims and supporting evidence; (iv) the parties’ legal theories; and (v) the parties' settlement positions. If an estimate of the possible loss or range of loss can be made at this time, it is included in the potential loss contingency description below.

The claims and legal proceedings in which we are involved also include challenges to the scope, validity or enforceability of the patents relating to our products, pipeline or processes and challenges to the scope, validity or enforceability of the patents held by others. These include claims by third parties that we infringe their patents. An adverse outcome in any of these proceedings could result in one or more of the following and have a material impact on our business or consolidated results of operations and financial position: (i) loss of patent protection; (ii) inability to continue to engage in certain activities; and (iii) payment of significant damages, royalties, penalties and/or license fees to third parties.

Loss Contingencies

Securities Litigation

We and certain current and former officers are defendants infour securities actions pending in the District Court, one filed in November 2020 (Nadia Shash was named lead plaintiff and named in an amended complaint along with named plaintiff Amjad Khan in April 2021), which relates to statements about ADUHELM, one filed by the Oklahoma Firefighters Pension and Retirement System in February 2022, which relates to statements about ADUHELM, one filed in May 2024 (Francis Clarity Stokes was named lead plaintiff and named along with Thomas Allen Gray in an amended complaint filed in December 2024), which relates to statements about LEQEMBI, TECFIDERA and VUMERITY, and one filed in August 2023 (Ray Peleckas and the Michigan Laborers’ Pension Fund were appointed lead plaintiffs and named in an amended complaint filed in October 2023), which relates to statements made by Apellis Pharmaceuticals, Inc. about SYFOVRE. All allege violations of federal securities laws under 15 U.S.C. §78j(b) and §78t(a) and 17 C.F.R. §240.10b-5c and seek declarations of the actions as class actions and monetary relief. In March 2026 the District Court dismissed the action brought by Thomas Allen Gray and Frances Clarity Stokes and they appealed. In June 2026 Thomas Allen Gray requested voluntary dismissal of his appeal but the appeal by lead plaintiff Frances Clarity Stokes continues. In April 2026 the parties in the action brought by the Oklahoma Firefighters Pension and Retirement System reached an agreement in principle to settle the action and the District Court preliminarily approved the settlement in June 2026 and set a hearing on final approval for September 29, 2026. In March 2025 the District Court dismissed the action brought by Michigan Laborers' Pension Fund and Ray Peleckas. They appealed and the appeal is pending.

Derivative Actions

We and members of the Board of Directors are named as defendants infive derivative actions pending in the District Court, one filed by The Booth Family Trust (Booth) in February 2022, one filed by Elaine Wang (Wang) in July 2022, one filed by Jonathan Blaufarb (Blaufarb I) in July 2024, one filed by Lawrence Hollin (Hollin) in October 2024 and one filed by Jonathan Blaufarb (Blaufarb II) in October 2024. The Booth, Wang and Blaufarb II actions relate to ADUHELM and other matters, and the Blaufarb I and Hollin actions relate to statements about LEQEMBI, our compliance controls, 2023 earnings guidance and other matters. The actions allege breach of fiduciary duty, waste of corporate assets and other common law claims, and violations of the Securities Exchange Act of 1934, 15 U.S.C. §78a et seq. The actions seek declaratory and injunctive relief, monetary relief payable to Biogen and attorneys’ fees and costs payable to the plaintiffs. All derivative actions are stayed.

IMRALDI Patent Litigation

IMRALDI is an adalimumab biosimilar manufactured by Samsung Bioepis that Biogen commercializes in Europe.

Fresenius Kabi has alleged infringement of national counterparts of its EP '3 145 488 Patent (the EP '488 Patent), including in Spain, Italy, France and Germany, and has also threatened litigation in Switzerland. In June 2022, Fresenius Kabi filed a claim for damages and injunctive relief against Biogen France SAS in the Tribunal de Grande Instance de Paris alleging infringement of the French counterpart of the EP '488 Patent by a formulation of IMRALDI no longer commercialized in France and alleging damages of approximately €19.1 million plus interest and costs. Biogen disputes infringement and challenges the validity of the patent. Trial was held in June 2026 and a decision is pending.

In May 2025 the Higher Regional Court of Düsseldorf, Germany held that a formulation of IMRALDI we no longer commercialize in Germany infringed the German counterpart of the EP '488 Patent, enjoined infringement and declared Fresenius Kabi's right to seek damages. Biogen has requested review of the decision by Germany's Federal Court of Justice and has challenged the validity of the patent in a separate proceeding, and a hearing on validity is set for February 2027.

Humana Patient Assistance Litigation

In February 2025 Humana filed suit against Biogen Inc., Biogen U.S. Corp. and Advanced Care Scripts, Inc. in Jefferson Circuit Court in Kentucky alleging damages related to providing MS patients with free medications and making charitable contributions to non-profit organizations that provide financial assistance to MS patients. Humana alleges breach of contract, fraud and other claims under various state laws and seeks damages, attorneys' fees and costs.

Genentech Litigation

In February 2023 Genentech Inc. filed suit in the U.S. District Court for the Northern District of California claiming that it was owed royalties on sales of TYSABRI that occurred after the expiration of a patent licensed by Genentech to Biogen. In November 2025 the court entered judgment against us for approximately $124.3 million. We appealed and the appeal is pending.

Antitrust Litigation

In October 2025 Local No. 1 Health Fund, the Mayor and City Council of Baltimore, Teamsters Local 237 Welfare Fund, Teamsters Local 237 Retirees' Benefit Fund, UFCW Local 1500 Welfare Fund and Jacksonville Police Officers and Fire Fighters Health Insurance Trust filed an amended complaint against us in now consolidated proceedings in the U.S. District Court for the Northern District of Illinois (the Illinois federal court). The first complaint was filed in August 2024. The plaintiffs allege violations of federal antitrust laws including 15 U.S.C. §§ 1, 2 and 13(c), the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1962(c) and of various state laws, based on allegations about our contracts with pharmacy benefit managers related to TECFIDERA and VUMERITY and other allegations. Plaintiffs seek declarations of the actions as class actions, monetary, declaratory and equitable relief and attorneys' fees and costs.

In addition, in September 2025 Walgreen Co. and The Kroger Co. sued us in the Illinois federal court, alleging violations of 15 U.S.C. §§ 1 and 2 based on allegations about our contracts with pharmacy benefit managers related to TECFIDERA and VUMERITY and other allegations. They seek monetary, declaratory and equitable relief and attorneys' fees and costs.

Neurimmune Litigation

In May 2025 we sued Neurimmune Holding AG and Neurimmune Subone AG (collectively, "Neurimmune") in the District Court seeking declaratory judgment and permanent injunctive relief regarding our rights under a terminated collaboration agreement related to aducanumab. In September 2025 Neurimmune counterclaimed for declaratory judgment, breach of contract and unfair competition under Massachusetts G.L. 93A and seeks monetary, declaratory and equitable relief and attorneys' fees and costs.

TECFIDERA E.U. Litigation

We have sued certain generic companies for damages for sales of generic versions of TECFIDERA in violation of our regulatory market protection, including Neuraxpharm Pharmaceuticals S.L., Neuraxpharm Netherlands B.V., Zaklady Farmaceutyczne Polpharma S.A., Sandoz B.V., Mylan Ireland Ltd. and Mylan B.V. in the District Court of Amsterdam Netherlands in November 2023; Sandoz A/S in the Danish Maritime and Commercial High Court in June 2024; and STADA Arzneimittel AG, STADA Nordic ApS, Sandoz A/S, Sandoz (Denmark) and Sandoz A/S (Finland), Glenmark Arzneimittel AG and Glenmark Pharmaceuticals Nordic AB in the Finnish Market Court in July 2024. All of these parties have counterclaimed for damages based on our actions to enforce TECFIDERA's regulatory marketing protection.

In September 2025 the European General Court annulled the May 2023 European Commission decision granting TECFIDERA an additional year of regulatory marketing protection extending until February 2025. We and the European Commission appealed and the appeal is pending.

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. Certain generic companies have filed claims for damages based on injunctions we obtained prior to patent revocation. Such claims have been filed in the Danish Maritime and Commercial High Court by Viatris ApS in January 2024, Glenmark Pharmaceuticals Nordic AB in July 2025, Sandoz A/S in October 2025, Neuraxpharm Sweden AB and Neuraxpharm Pharmaceuticals S.L. in February 2026 and in the Prague Municipal Court, Czechia, by Glenmark Pharmaceuticals s.r.o., Glenmark Pharmaceuticals Distribution s.r.o. and Zakłady Farmaceutyczne Polpharma S.A. in May 2026.

Germany Tax Matter

In December 2025 and January 2026 a German tax authority issued assessments against us of approximately €209.8 million including interest, which continues to accrue. We are challenging the assessments.

Other Matters

Government Investigations

In May 2024 the Italian Competition Authority informed us that it is investigating Biogen and other companies in relation to our biosimilar product BYOOVIZ.

In September 2025 we received a Civil Investigative Demand from the Louisiana Department of Justice for information regarding our policies relating to the purchase of drugs by healthcare organizations that are covered entities under Section 340B of the Public Health Service Act.

In January 2026 we received a request for information regarding TECFIDERA from the European Commission Directorate-General for Competition. In July 2026 the Commission informed us that it has closed the matter.

In May 2026 the Italian Competition Authority announced that it is investigating Biogen in relation to our STRATIFY JCV assay.

TYSABRI Biosimilar Patent Matter

In September 2022 we filed an action in the U.S. District Court for the District of Delaware against Sandoz Inc., other Sandoz entities and Polpharma Biologics S.A. under the Biologics Price Competition and Innovation Act, 42 U.S.C. §262, seeking a declaratory judgment of patent infringement. In January 2026 we filed an amended complaint against Sandoz Inc. alleging infringement of U.S. Patent Nos. 10,233,245 and U.S. 11,292,845 and seeking damages. Trial against Sandoz Inc. is scheduled for April 2027.

Hatch-Waxman Act Litigation relating to SPINRAZA

In May and June 2026, Biogen filed patent infringement proceedings relating to SPINRAZA Orange-Book listed patents (U.S. Patent Nos. 9,926,559, 10,436,802 and 12,013,403) pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act) in the U.S. District Court for the District of Delaware against Somerset Therapeutics, LLC, Somerset Pharma, LLC, Somerset Therapeutics Private Limited f/k/a Somerset Therapeutics Limited and Odin Pharmaceuticals, LLC (collectively, Somerset) and Cipla Ltd. and Cipla USA, Inc.

In June 2026, Biogen, Cold Spring Harbor Laboratory and Ionis Pharmaceuticals, Inc. filed patent infringement proceedings relating to additional SPINRAZA Orange-Book listed patents (U.S. Patent Nos. 8,361,977, 8,980,853 and 9,717,750) pursuant to the Hatch-Waxman Act in the U.S. District Court for the District of Delaware against Somerset.

Eisai Matter

In June 2025 we filed a request for arbitration in the International Court of Arbitration of the International Chamber of Commerce seeking adoption of a budget and commercialization plan for the European Territory that allocates commercialization activities to Biogen and Eisai in an equitable fashion taking into account our respective capabilities and provides a meaningful role for each party. A hearing is set for May 2027.

Product Liability and Other Legal Proceedings

We are also involved in product liability claims and other legal proceedings 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 condition.

We operate and are managed asone operating segment, and derive revenue from activities related to the discovery, development and delivery of innovative therapies for people living with serious and complex diseases.

Our research and development organization is responsible for the research and discovery of new product candidates and supports development and registration efforts for potential future products. Our pharmaceutical, operations and technology organization manages the development of the manufacturing processes, clinical trial supply, commercial product supply, distribution, buildings and facilities. Our commercial organization is responsible for U.S. and international development of our commercial products. We are also supported by corporate staff functions.

Our CEO, as the CODM, manages and allocates resources to the operations of our company on a total company basis by assessing the overall level of resources available and deciding how to best deploy these resources across functions, therapeutic areas and research and development projects that are in line with our long-term company-wide strategic goals. In making these decisions, our CEO is provided with and uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. The CODM performs this assessment based on the segment’s net income. Through this analysis, which includes a comparison to budgeted results, the CODM assesses performance and how to allocate resources across the functions discussed above. The measure of segment assets used in determining how to manage and allocate resources is reported within our condensed consolidated balance sheets as total assets.

The table presented below, which was prepared in accordance with the accounting policies discussed in Note 1, Summary of Significant Accounting Policies, to our consolidated financial statements included in our 2025 Form 10-K, contains additional information on our segment’s revenue and profits, including significant segment expense and other segment items.

Additional Segment Information

The following table includes additional information about reported segment revenue, significant segment expense and segment measure of profitability:

(1) Other research and development costs primarily 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 and are not allocated to a specific program or stage.

(2) Other segment expense includes: amortization and impairment of acquired intangible assets; collaboration profit sharing/(loss reimbursement); (gain) loss on fair value remeasurement of contingent consideration; restructuring charges; other (income) expense, net; and income tax (benefit) expense.