A Company Aligned. a Mission Defined
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2012 ANNUAL REPORT BIOGENIDEC.COM/AR2012 LISA SINDONI Mother, Dog Lover, Inspiration A Company Aligned. A Mission Defined. 43080.indd A 4/17/13 12:06 PM Revenues $ in millions $4,089 $4,377 $4,716 $5,049 $5,516 08 09 10 11 12 Non-GAAP Diluted EPS* $ $3.66 $4.12 $5.15 $5.90 $6.53** 08 09 10 11 12 Free Cash Flow* $ in millions $1,286 $909 $1,452 $1,520 $1,625 08 09 10 11 12 *Non-GAAP diluted EPS and free cash fl ow are non-GAAP fi nancial measures. A reconciliation of GAAP to non-GAAP diluted EPS and free cash fl ow amounts are set forth on pages 14 and 15 of this annual report. **2012 Non-GAAP diluted EPS was impacted by a tax correction which increased tax expense by $29 million and reduced EPS by approximately 12 cents 443080.indd3080.indd B 44/17/13/17/13 112:062:06 PM GEORGE A. SCANGOS, PH.D. Chief Executive Offi cer Dear Fellow Shareholders: For everyone who counts Our core business has grown, on Biogen Idec, 2012 was an we are preparing for several extraordinary year – a period potential product launches in of significant transformation and the near future, and we have remarkable accomplishments made real progress in enhancing across the organization. our early stage research and development (R&D) pipeline. Since our last annual report, Biogen Idec has matured as a vibrant organization. biogenidec.com/AR2012 1 43080.indd 1 4/17/13 12:06 PM Since the beginning of 2012, we reported AVONEX®, one of the most prescribed results from fi ve pivotal clinical trials – four of treatments for relapsing forms of multiple which met their endpoints, and all of which were sclerosis worldwide, gained global market share scientifi cally valuable. within the class of injectable front-line therapies, thanks to strong commercial execution and the We substantially improved our R&D platform introduction of two improvements: the AVONEX while developing a new approach to the way in PEN® auto-injector, and the AVOSTARTGRIP® which innovation is generated and nurtured in the titration kit, which helps reduce the frequency biopharmaceutical sector. We have strengthened and severity of fl u-like symptoms. For the fi rst our production capabilities and continued our time in many years, there were more patients internal cultural transformation. taking AVONEX at the end of the year than at the beginning of the year. Today we are fully aligned behind a crisply defi ned mission and business strategy. We also made considerable investments in TYSABRI®, our highly effective treatment for As we enter Biogen Idec’s 35th year, we relapsing forms of multiple sclerosis. In January have positioned our company squarely at the 2012, the U.S. Food and Drug Administration intersection of science, medicine and economics. (FDA) approved a product label change that identifi es anti-JCV antibody status as a risk Our goal is to discover, develop and deliver factor for developing an infrequent but serious new therapeutics that lead to a meaningful brain infection known as progressive multifocal improvement in the lives of patients, and to leukoencephalopathy (PML). This label change demonstrate the real-world economic impact was the foundation of our application to the FDA of those therapies in order to gain appropriate and European Medicines Agency (EMA) in early reimbursement from payors around the world. 2013 requesting updates to the TYSABRI label In so doing, we will defi ne our future. for an expanded indication that would include fi rst-line use in patients who test negative for Our efforts in 2012 generated JC virus antibodies. It is our hope that TYSABRI strong fi nancial results. Revenue will be approved for this patient population. We for the year was $5.5 billion, a 9 continue to conduct research, both internal percent increase over 2011, and we and external, intended to identify further enjoyed growth in both EPS and risk-stratifi cation tools. free cash fl ow. Also last year, we began a global Phase 3b study, ASCEND, to evaluate the effectiveness Biogen Idec delivered real rewards to you, of TYSABRI as a treatment for secondary our shareholders, and entered 2013 on solid progressive multiple sclerosis (SPMS). fi nancial footing with signifi cant momentum. Approximately 35 percent of MS patients have Advancing the secondary progressive form of the disease, and currently there is no effective therapy Commercial Success to treat them. Preliminary data from small Biogen Idec’s leadership in multiple sclerosis observational studies suggest that TYSABRI (MS) treatment continues to be the foundation may provide a benefi t to these patients, and we of our commercial strength; in 2012 this core are testing that hypothesis in the ASCEND trial. franchise performed exceptionally well, delivering full-year revenue growth of 9 percent over 2011. 2 biogenidec.com/AR2012 43080.indd 2 4/17/13 12:06 PPMM In February 2013, we reached an agreement In Europe, the European Patent Offi ce determined with our partner Elan to acquire full ownership that our application for a patent covering the same of TYSABRI. This transaction, which closed in 480 mg daily dosing regimen of TECFIDERA April 2013, is a pivotal event in our stewardship is allowable. Once granted, this patent will also of TYSABRI that began even before launch expire in 2028. The European Patent Offi ce has in 2004. This acquisition provides us with a already issued a patent that covers the TECFIDERA greater share of TYSABRI profi ts, operational formulation and the method of treating MS and and strategic control, and eliminates the change other autoimmune diseases. This patent will expire of control provision that was part of the original in 2019 but may be eligible for term extensions in agreement. We believe full ownership also some countries. improves our ability to optimally position TYSABRI within our MS portfolio. TECFIDERA offers the MS community a treatment with strong effi cacy and a favorable safety profi le in the convenience of a pill – a combination we believe From Pipeline to Patients will have a signifi cant, positive impact on the way The excellent performance of our marketed products people live with this chronic disease. TECFIDERA portfolio was mirrored by the success of our R&D raises expectations for what patients can achieve and regulatory organizations. 2012 was a year with their therapy, and Biogen Idec is committed of signifi cant achievements, spanning the entire to setting a new standard for the next generation pipeline, from early research to clinical support for of medicines. marketed therapies. We also continued to advance our late- ™ I’ll start with our most recent accomplishment: stage development program for PLEGRIDY TECFIDERA™ (dimethyl fumarate), a new fi rst-line (peginterferon beta-1a) for the treatment of oral treatment for people with relapsing forms of relapsing forms of MS. We reported positive top- multiple sclerosis, including relapsing-remitting line data from the Phase 3 registrational study in multiple sclerosis (RRMS), which is the most January 2013, and expect to fi le our Biologics common form of this disease. In March 2013, the License Application (BLA) with the FDA in mid- FDA approved TECFIDERA, and the Committee for 2013. If approved, PLEGRIDY is expected to Medicinal Products for Human Use issued a positive represent an innovation that offers patients solid opinion recommending a marketing authorization be effi cacy, with a dosing schedule that compares granted for TECFIDERA in the European Union. favorably to the more frequent injection schedules with other drugs in the injectable class of treatment. Results of our Phase 3 DEFINE and CONFIRM We believe that convenience will be an increasingly studies – which form the foundation for important differentiator in this segment of the MS TECFIDERA’s regulatory fi lings around the world market, and that the less frequent dosing schedule – were published in The New England Journal of of PLEGRIDY, with a convenient auto-injector, Medicine in September, 2012. will allow us to capture an increasing share of this market segment. Additionally, in March 2013, the U.S. Patent and Trademark Offi ce issued us a patent for the We also advanced daclizumab high-yield process TECFIDERA dosing regimen of 480 mg daily. This (DAC HYP), an investigational, once-monthly patent, which expires in 2028, adds to our growing subcutaneous therapy in the treatment of RRMS. portfolio of patents covering TECFIDERA, which We reported data from our Phase 2b SELECT trial includes patents claiming formulations of its active at the American Academy of Neurology in April ingredient, dimethyl fumarate, to treat multiple 2012 and the full data set was recently published in sclerosis and methods for treating multiple sclerosis an online article in The Lancet. In addition, we fully using dimethyl fumarate. Those patents will expire in enrolled our Phase 3 DECIDE registrational clinical 2019 and 2020, respectively, but could be eligible trial in mid-2012. We expect a read-out from this for additional extension. trial in 2014. biogenidec.com/AR2012 3 43080.indd 3 4/17/13 12:06 PPMM As we intensify our commitment to MS, we are In addition to these milestones, Biogen Idec leading what we believe will be a transformation signed three development agreements with Isis in the standard of care in hemophilia. In 2012, Pharmaceuticals (Isis), a leader in antisense, or we reported positive clinical data from Phase RNA-targeted, drug discovery and development. 3 trials for long-lasting recombinant factor VIII Through these agreements we will: Fc fusion protein (rFVIIIFc) for the treatment of hemophilia A and long-lasting recombinant factor • Jointly develop and commercialize Isis’ IX Fc fusion protein (rFIXFc) for the treatment of antisense investigational drug, Isis-SMNRx, for hemophilia B.