Morningstar® Document Research℠
`FORM 10-K
`BIOGEN INC. - BIIB
`Filed: March 10, 2004 (period: December 31, 2003)
`
`
`
`Annual report with a comprehensive overview of the company
`
`The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user
`assumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot be
`limited or excluded by applicable law. Past financial performance is no guarantee of future results.
`
`Page 1 of 321
`
`Biogen Exhibit 2088
`Coalition v. Biogen
`IPR2015-01993
`
`

`

`UNITED STATES SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`Form 10-K
`
`
`
`ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
`1934
`
`For the fiscal year ended December 31, 2003
`
`or
`
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
`1934
`
`For the transition period from to
`
`Commission file number: 0-19311
`
`Biogen Idec Inc.
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`(Exact name of registrant as specified in its charter)
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`
`
`
`
`Delaware
`(State or other jurisdiction of
`incorporation or organization)
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`33-0112644
`(I R S Employer
`Identification No )
`
`Table of Contents
`
`(Mark One)
`
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`o
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`14 Cambridge Center, Cambridge, Massachusetts 02142
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`(Address of principal executive offices) (Zip code)
`
`(617) 679-2000
`
`(Registrant’s telephone number including area code)
`
`Securities registered pursuant to Section 12(b) of the Act:
`
`None
`
`Securities registered pursuant to Section 12(g) of the Act:
`
`Common Stock, $0.0005 par value
`
`Series X Junior Participating Preferred Stock Purchase Rights
`
`(Title of class)
`
` Ind cate by check mark whether the Reg strant (1) has f ed a reports requ red to be f ed by Sect on 13 or 15(d) of the Secur t es Exchange
`Act of 1934 dur ng the preced ng 12 months (or for such shorter per od that the Reg strant was requ red to f e such reports), and (2) has been
`subject to such f ng requ rements for the past 90 days. Yes  No o
`
` Ind cate by check mark f d sc osure of de nquent f ers pursuant to Item 405 of Regu at on S-K s not conta ned here n, and w not be
`conta ned, to the best of the Reg strant’s know edge, n def n t ve proxy or nformat on statements ncorporated by reference n Part III of th s
`Form 10-K or any amendment to th s Form 10 K. 
`
` Ind cate by check mark whether the Reg strant s an acce erated f er (as def ned n Exchange Act Ru e 12b 2). Yes  No o
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` The aggregate market va ue of the Reg strant s Common Stock he d by non-aff ates of the Reg strant (w thout adm tt ng that any person
`whose shares are not nc uded n such ca cu at on s an aff ate) computed by reference to the pr ce at wh ch the common stock was ast so d
`as of the ast bus ness day of the Reg strant’s most recent y comp eted f sca quarter was $4,762,181.085.
`
` As of February 20, 2004, the Reg strant had 331,996,625 shares of Common Stock, $0.0005 par va ue, ssued and outstand ng.
`
`Powered by Mornings ar® Documen Research℠
`Source BIOGEN INC , 10 K, March 10, 2004
`The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
`except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
`
`Page 2 of 321
`
`

`

` Port ons of the def n t ve Proxy Statement for our 2004 Annua Meet ng of Stockho ders are ncorporated by reference nto Part III of th s
`Report.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`
`BIOGEN IDEC INC.
`
`ANNUAL REPORT ON FORM 10-K
`
`For the Fiscal Year Ended December 31, 2003
`
`TABLE OF CONTENTS
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` PART I
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` Tab e
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` Item 1.
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` Item 2.
` Item 3.
` Item 4.
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` Item 5.
` Item 6.
` Item 7.
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` Item 7A.
` Item 8.
` Item 9.
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` Item 9A.
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` Item 10.
` Item 11.
` Item 12.
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` Item 13.
` Item 14.
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` Bus ness
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` Overv ew
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` Our Products and Pr mary Product Cand dates
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` Our Products
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` Our Pr mary Product Cand dates
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` Other Research and Deve opment Programs
`
` Research and Deve opment Costs
`
` Pr nc pa L censed Products
`
` Patents and Other Propr etary R ghts
`
` Sa es, Market ng and D str but on
`
` Compet t on
`
` Regu atory
`
` Manufactur ng and Raw Mater a s
`
` Our Emp oyees
`
` Our Execut ve Off cers
`
` Forward-Look ng Informat on and R sk Factors That May Affect Future Resu ts
` Propert es
`
` Lega Proceed ngs
`
` Subm ss on of Matters to a Vote of Secur ty Ho ders
`
` PART II
`
` Market for Reg strant’s Common Equ ty and Re ated Stockho der Matters
`
` Se ected Conso dated F nanc a Data
`
` Management’s D scuss on and Ana ys s of F nanc a Cond t on and Resu ts of
`
`Operat ons
` Quant tat ve and Qua tat ve D sc osures About Market R sk
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` Conso dated F nanc a Statements and Supp ementary Data
`
` Changes n and D sagreements w th Accountants on Account ng and
`F nanc a D sc osure
` Contro s and Procedures
` PART III
` D rectors and Execut ve Off cers of the Reg strant
` Execut ve Compensat on
` Secur ty Ownersh p of Certa n Benef c a Owners and Management and
`Re ated Stockho der Matters
` Certa n Re at onsh ps and Re ated Transact ons
` Pr nc pa Account ng Fees and Serv ces
` PART IV
` Exh b ts, F nanc a Statement Schedu es, and Reports on Form 8-K
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`Page
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` Item 15.
` S gnatures
` Conso dated F nanc a Statements and Schedu e
` EX-3.1 AMENDED AND RESTATED CERTIFICATE OF INCORP
` EX-3.2 CERTIFICATE OF AMENDMENT
` EX-3.3 CERTIFICATE INCREASING THE NUMBER OF SHARES
` EX-3.4 CERTIFICATE OF AMENDMENT
` EX-3.5 BYLAWS
` EX-3.6 AMENDMENT TO BYLAWS DATED AS OF 12-21-2001
` EX-3.7 AMENDMENT TO BYLAWS DATED AS OF 11-12-2003
` EX-4.2 SPECIMEN COMMON STOCK CERTIFICATE
` EX-10.13 VOLUNTARY EXECUTIVE SUP. SAVINGS PLAN
` EX-10.28 VOLUNTARY BOARD OF DIR SAVINGS PLAN
`
`Powered by Mornings ar® Documen Research℠
`Source BIOGEN INC , 10 K, March 10, 2004
`The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
`except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
`
`Page 3 of 321
`
`

`

` EX-10.29 EXECUTIVE SEVERANCE POLICY
` EX-10.34 FOURTH AMENDMENT TO AGREEMENT
` EX-10.35 FIFTH AMENDMENT TO AGREEMENT
` EX-10.36 FIRST AMENDMENT TO LEASE DATED 10-1-1999
` EX-10.37 SECOND AMENDMENT TO LEASE DATED 6-16-2000
` EX-10.38 THIRD AMENDMENT TO LEASE DATED 10-13-2000
` EX-10.39 FIRST AMENDMENT TO LEASE DATED 11-9-1992
` EX-10.40 LEASE AMENDMENT DATED 12-30-1994
` EX-10.41 LEASE AGREEMENT
` EX-10.42 FIRST AMENDMENT TO LEASE DATED 9-12-2000
` EX-10.43 SECOND AMENDMENT TO LEASE DATED 11-1-2000
` EX-10.44 SINGLE-TENANT FULLY-NET LEASE AGREEMENT
` EX-10.45 FORM OF LETTER AGREEMENT
` EX-12.1 COMPUTATION OF RATIO OF EARNINGS
` EX-21.1 SUBSIDIARIES
` Consent of Pr cewaterhouseCoopers LLP
` EX-23.2 CONSENT OF KPMG LLP.
` EX-31.1 CEO CERTIFICATION
` EX-31.2 CFO CERTIFICATION
` EX-32.1 CERTIFICATION PERSUANT TO SECTION 906
`
`Powered by Mornings ar® Documen Research℠
`Source BIOGEN INC , 10 K, March 10, 2004
`The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
`except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
`
`Page 4 of 321
`
`

`

`Table of Contents
`
`
`Item 1.
`
`Overview
`
`Business.
`
`PART I
`
` In November 2003, B ogen, Inc. and IDEC Pharmaceut ca s Corporat on merged under the name B ogen Idec Inc., br ng ng together the
`comp ementary strengths of each company. B ogen Idec creates new standards of care n onco ogy and mmuno ogy. As a g oba eader n the
`deve opment, manufactur ng, and commerc a zat on of nove therap es, we transform sc ent f c d scover es nto advances n human
`hea thcare. We current y have four commerc a products: AVONEX® (Interferon beta-1a) for the treatment of re aps ng mu t p e sc eros s, a so
`known as MS, RITUXAN® (r tux mab) and ZEVALIN® ( br tumomab t uxetan), both of wh ch treat certa n B-ce non-Hodgk n s ymphomas,
`a so referred to as B-ce NHLs, and AMEVIVE® (a efacept) for the treatment of adu t pat ents w th moderate to severe chron c p aque
`psor as s who are cand dates for system c therapy or phototherapy. We a so rece ve revenues from roya t es on sa es by our censees of a
`number of products covered under patents that we contro nc ud ng sa es of RITUXAN outs de the U.S. In add t on, we have a p pe ne of
`deve opment stage products and a number of research programs n our core therapeut c areas and n other areas of nterest.
`
` AVONEX s the most prescr bed therapeut c product n MS wor dw de. G oba y over 125,000 pat ents have chosen AVONEX as the r
`treatment of cho ce. In 2003, sa es of AVONEX generated wor dw de revenues of $1.16 b on as compared to revenues of $1.03 b on from
`sa es of AVONEX n 2002.
`
` RITUXAN, the f rst monoc ona ant body approved by the U.S. Food and Drug Adm n strat on for a cancer therapy nd cat on, s current y
`marketed and so d wor dw de for the treatment of var ous B-ce NHLs. We market RITUXAN n the U.S. n co aborat on w th Genentech,
`Inc. A U.S. sa es of RITUXAN are recogn zed by Genentech and we record our share of the pretax copromot on prof ts on a quarter y bas s.
`In 2003, RITUXAN generated U.S. net sa es of $1.36 b on of wh ch we recorded $419.2 m on as our share of copromot on prof ts as
`compared to U.S. net sa es of $1.08 b on n 2002 of wh ch we recorded $324.5 m on as our share of copromot on prof ts. F. Hoffmann-
`La Roche Ltd. se s r tux mab outs de the U.S., except n Japan where t copromotes RITUXAN n co aborat on w th Zenyaku Kogyo Co. Ltd.
`We rece ved roya t es on sa es of r tux mab outs de of the U.S. of $67.9 m on n 2003 as compared to $45.4 m on n 2002. RITUXAN s
`the trade name used for r tux mab n the U.S., Canada and Japan, and MabThera s the trade name n the European Un on, or EU. In th s
`Form 10-K, we refer to r tux mab, RITUXAN and MabThera co ect ve y as RITUXAN, except where we have otherw se nd cated.
`
` In February 2002, ZEVALIN became the f rst rad o mmunotherapy approved by the FDA for the treatment of cancer. ZEVALIN s approved
`as a treatment for re apsed or refractory ow-grade, fo cu ar, or transformed B-ce NHL nc ud ng pat ents w th RITUXAN refractory fo cu ar
`NHL. We aunched ZEVALIN n the U.S. n Apr 2002. In 2003, sa es of ZEVALIN n the U.S. generated revenues of $19.6 m on as
`compared to revenues of $13.7 m on n 2002. Outs de the U.S., we have censed our market ng r ghts n ZEVALIN to Scher ng AG. In
`January 2004, the European Agency for the Eva uat on of Med c na Products, or EMEA, the regu atory author ty n the EU, granted
`market ng approva of ZEVALIN n the EU for the treatment of adu t pat ents w th CD20+ fo cu ar B-ce NHL who are refractory to or have
`re apsed fo ow ng RITUXAN therapy.
`
` AMEVIVE was approved n the U.S. n January 2003 for the treatment of adu t pat ents w th moderate-to-severe chron c p aque psor as s
`who are cand dates for system c therapy or phototherapy. In 2003, sa es of AMEVIVE generated revenues of $40.4 m on. In February 2003,
`the European Comm ttee for Propr etary Med c na Products, the sc ent f c adv sory board of the EMEA, determ ned that more nformat on
`was requ red to approve AMEVIVE n the EU. We w thdrew our app cat on for approva . We p an to deve op the add t ona nformat on
`necessary to obta n approva of AMEVIVE for the treatment of psor as s n the EU. Deve op ng the data and re-f ng the app cat on may take
`severa years.
`
` In add t on to ongo ng deve opment work w th our marketed products, nc ud ng stud es of RITUXAN n rheumato d arthr t s, we cont nue
`to devote s gn f cant resources to other ongo ng deve opment efforts. These
`
`1
`
`Powered by Mornings ar® Documen Research℠
`Source BIOGEN INC , 10 K, March 10, 2004
`The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
`except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
`
`Page 5 of 321
`
`

`

`Table of Contents
`
`efforts nc ude our co aborat on w th E an Corporat on p c on the deve opment of ANTEGREN® (nata zumab), as a potent a treatment for
`MS, Crohn’s d sease and rheumato d arthr t s, our co aborat on w th Fumapharm AG on deve opment of an ora therapy as a potent a
`treatment for psor as s and MS, our deve opment of Ant -CD80 (Ant -B7.1) as a potent a treatment for non-Hodgk n’s ymphomas, a so
`referred to as NHLs, and auto mmune d seases, and our deve opment of Ant -CD23 as a potent a treatment for a erg c rh n t s, a erg c
`asthma and chron c ymphocyt c eukem a, a so referred to as CLL.
`
` We a so have a number of prec n ca and ear er-stage research programs. Our research strategy s to d rect our pr mary effort toward
`f nd ng therapeut cs n our focus areas: onco ogy, neuro ogy, dermato ogy and rheumato ogy. We supp ement our nterna research efforts to
`f nd nove therapeut cs n these areas and n other areas of nterest w th genom cs too s and other nnovat ve techno og es. We a so seek to
`advance our research efforts through co aborat ons. We be eve that our b o og ca y-focused research strength, a ong w th expert se n prote n
`and b o-organ c chem stry, w a ow us to be n a pos t on to cap ta ze on the potent a of the post genom cs era.
`
` Merger On November 12, 2003, Br dges Merger Corporat on, a who y owned subs d ary of IDEC Pharmaceut ca s Corporat on, was
`merged w th and nto B ogen, Inc. w th B ogen, Inc. cont nu ng as the surv v ng corporat on and a who y owned subs d ary of IDEC
`Pharmaceut ca s Corporat on. At the same t me, IDEC Pharmaceut ca s Corporat on changed ts name to B ogen Idec Inc. The merger and
`name change were made under an Agreement and P an of Merger dated as of June 20, 2003. As a resu t of the merger, each ssued and
`outstand ng share of B ogen, Inc. common stock was converted nto the r ght to rece ve 1.15 shares of B ogen Idec common stock. Our stock
`trades on the Nasdaq Nat ona Market under the symbo BIIB. The resu ts of B ogen, Inc.’s operat ons from November 13, 2003, the day after
`the effect ve date of the merger, to December 31, 2003 have been nc uded n the conso dated f nanc a statements f ed n th s Annua Report
`on Form 10-K.
`
` Available Information We are a De aware corporat on w th pr nc pa execut ve off ces ocated at 14 Cambr dge Center, Cambr dge,
`Massachusetts 02142. Our te ephone number s (617) 679-2000 and our web s te address s www.b ogen dec.com. We make ava ab e free
`of charge through the Investor Re at ons sect on of our web s te our Annua Reports on Form 10-K, Quarter y Reports on Form 10-Q, Current
`Reports on Form 8-K and a amendments to those reports as soon as reasonab y pract cab e after such mater a s e ectron ca y f ed w th or
`furn shed to the Secur t es and Exchange Comm ss on, or the SEC. We nc ude our web s te address n th s Annua Report on Form 10-K
`on y as an nact ve textua reference and do not ntend t to be an act ve nk to our web s te.
`
`2
`
`Powered by Mornings ar® Documen Research℠
`Source BIOGEN INC , 10 K, March 10, 2004
`The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
`except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
`
`Page 6 of 321
`
`

`

`Table of Contents
`
`Our Products and Primary Product Candidates — Table
`
` Our products and our pr mary product cand dates are targeted to address a var ety of key med ca needs n the areas of onco ogy,
`neuro ogy, dermato ogy and rheumato ogy. These products and product cand dates and our deve opment and/or market ng partners, f any,
`are descr bed n the fo ow ng tab e.
`
`
`
` AVONEX
`
` RITUXAN
`
` Candidate
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` ZEVALIN
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` Product/Product
`Indication(s)
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`Certa n forms of MS
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`Certa n B-ce NHLs
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`Rheumato d arthr t s
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`CLL
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`Certa n B-ce NHLs
`(rad o mmunotherapy)
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`Status
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`Approved
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` Wor dw de
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`Approved
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` Wor dw de
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`Phase 3
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`Phase 3
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`Approved
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` U.S. and EU
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`None
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`Development and/or
`Marketing Partners
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`Genentech (U.S.) Roche outs de
`U.S. and Japan)
`Zenyaku and Roche (Japan)
`
`Genentech (U.S.) Roche (outs de
`U.S. and Japan)
`
`Genentech (U.S.) Roche (outs de
`U.S. and Japan)
`
`Scher ng AG (outs de U.S.)
`
`None
`
` AMEVIVE
`
` ANTEGREN
`
`
`
`
`
`
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` Ora Fumarate
`
`
`
`
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` Ant -CD80 (Ant -B7.1)
`
` Ant -CD23
`
`Moderate to severe chron c
`p aque psor as s
`
`
`
` MS
`
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`Crohn s d sease
`
`
`
`
`
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`
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`Rheumato d arthr t s
`
`Psor as s
`
`
` MS
`
`NHL
`
`A erg c rh n t s, a erg c
`asthma and CLL
`
`
`
`
`
` U.S.
`Approved
`W thdrawn — EU; Under
`regu atory rev ew
` Austra a,
`Canada, Israe , New Zea and,
`and Sw tzer and
`
`Phase 3; expect to f e BLA
`w th FDA m d-year 2004
`
`
`
`
`
`Phase 3; add t ona Phase 3
`tr a expected to beg n n 2004
`
`Phase 2 expected to beg n n
`f rst ha f of 2004
`
`Phase 3 n EU; Second
`Phase 3 expected to beg n n
`f rst ha f of 2005
`
`Phase 2 expected to beg n n
`second ha f of 2004
`
`Comp eted Phase 1/2 n
`re apsed or refractory fo cu ar
`ymphoma
`
`Phase 1/2 n a erg c asthma;
`Phase 2 p ot n seasona
`a erg c rh n t s; Phase 1 n
`CLL
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`3
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`E an
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`E an
`
`E an
`
`Fumapharm (deve opment n
`EU; market ng n Germany)
`
`None
`
`None
`
`None
`
`Powered by Mornings ar® Documen Research℠
`Source BIOGEN INC , 10 K, March 10, 2004
`The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
`except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
`
`Page 7 of 321
`
`

`

`Table of Contents
`
`Our Products
`
`
`
`AVONEX
`
` We current y market and se AVONEX wor dw de for the treatment of re aps ng MS. In 2003, sa es of AVONEX generated wor dw de
`revenues of $1.17 b on as compared to revenues of $1.03 b on n 2002. Pr or to the merger, AVONEX was so d by B ogen, Inc. Our 2003
`conso dated f nanc a statements nc ude on y those operat ons of B ogen, Inc. that occurred dur ng the per od between November 13, 2003,
`the day after the effect ve date of the merger, and December 31, 2003. Our revenues from AVONEX dur ng th s post merger per od were
`$142.6 m on.
`
` MS s a progress ve neuro og ca d sease n wh ch the body oses the ab ty to transm t messages a ong nerve ce s, ead ng to a oss of
`musc e contro , para ys s and, n some cases, death. Pat ents w th act ve re aps ng MS exper ence an uneven pattern of d sease progress on
`character zed by per ods of stab ty nterrupted by f are ups of the d sease after wh ch the pat ent returns to a new base ne of funct on ng.
`AVONEX s a recomb nant form of a prote n produced n the body by f brob ast ce s n response to v ra nfect on. AVONEX has been shown
`n c n ca tr a s n re aps ng forms of the d sease both to s ow the accumu at on of d sab ty and to reduce the frequency of f are ups. B ogen,
`Inc. began se ng AVONEX n the U.S. n 1996, and n the EU n 1997. Current y AVONEX s on the market n more than 60 countr es.
`Based on data from an ndependent th rd party research organ zat on, our d str butors and nterna ana ys s, we be eve that AVONEX s the
`most prescr bed therapeut c product for the treatment of MS wor dw de. G oba y, over 125,000 pat ents have se ected AVONEX as the r
`treatment of cho ce. AVONEX s a so the on y product n the MS market that s current y covered by Med care.
`
` As part of our comm tment to AVONEX, we work to make treatment more conven ent. In May 2003, the FDA approved a new pre-f ed
`syr nge formu at on wh ch became ava ab e n the U.S. n August 2003 and rep aced the dry powder form. We p an to re ntroduce the dry
`powder form as an add t ona a ternat ve n the U.S. n 2004. The new formu at on was approved by the EMEA n Ju y 2003 and s be ng
`made ava ab e n the EU on a country-by-country bas s. We cont nue to exp ore other ways to mprove the de very and conven ence of
`AVONEX.
`
` We a so cont nue to work to expand the quant ty and qua ty of data ava ab e about AVONEX. The AVONEX abe was amended n
`January 2003 to nc ude n the nd cat on sect on MS pat ents w th a f rst c n ca ep sode and MRI features cons stent w th MS. Th s abe
`change s based on the data from our Contro ed H gh R sk AVONEX Mu t p e Sc eros s Prevent on Study, or CHAMPS. In CHAMPS,
`AVONEX was shown to have a h gh y stat st ca y s gn f cant benef c a effect on de ay ng the onset of a second exacerbat on n pat ents who
`had exper enced a s ng e neuro og ca event cons stent w th MS. Based on the CHAMPS data, the regu atory author t es n the EU made a
`s m ar change to the AVONEX abe n 2002. G ven the chron c nature of MS, we cont nue to study the ong-term use of AVONEX. In May
`2003, we announced that data presented at the Consort um of Mu t p e Sc eros s Centers annua meet ng demonstrated that AVONEX was
`genera y we to erated and produced ow eve s of neutra z ng ant bod es n pat ents treated for up to e ght years
`
` An mportant component of our act v t es re ated to AVONEX s our ongo ng c n ca tr a work. In September 2003, we announced the
`resu ts of our Contro ed H gh R sk AVONEX Mu t p e Sc eros s Prevent on Study In Ongo ng Neuro og ca Surve ance, or CHAMPIONS,
`an extens on of CHAMPS, wh ch was des gned to determ ne whether the effect of ear y treatment w th AVONEX n de ay ng re apses and
`reduc ng the accumu at on of MS bra n es ons cou d be susta ned for up to f ve years. The study resu ts showed that AVONEX a tered the
`ong-term course of MS n pat ents who began treatment mmed ate y after the r n t a MS attack compared to n t at on of treatment more
`than two years after onset of symptoms. We dec ded to extend CHAMPIONS for an add t ona f ve years n order to determ ne f the effects of
`ear y treatment can be susta ned for up to 10 years. We a so recent y comp eted a ong-term, safety extens on study of AVONEX n pat ents
`w th re aps ng MS and cont nue to support Phase 4 nvest gator-run stud es eva uat ng AVONEX n comb nat on w th other therap es.
`
`4
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`RITUXAN
`
` RITUXAN, the f rst monoc ona ant body approved n the U.S. for a cancer therapy nd cat on, s current y marketed and so d wor dw de
`for the treatment of var ous B-ce NHLs. We market RITUXAN n the U.S. n co aborat on w th Genentech. In 2003, RITUXAN generated
`U.S. net sa es of $1.36 b on of wh ch we recorded $419.2 m on as our share of copromot on prof ts as compared to U.S. net sa es of
`$1.08 b on n 2002 of wh ch we recorded $324.5 m on as our share of copromot on prof ts. Roche se s RITUXAN outs de the U.S.,
`except n Japan where t copromotes RITUXAN n co aborat on w th Zenyaku. We rece ved roya t es on sa es of RITUXAN outs de of the
`U.S. of $67.9 m on n 2003 as compared to $45.4 m on n 2002.
`
` In the U.S., we copromote RITUXAN w th Genentech and share respons b ty w th Genentech for cont nued deve opment. Such
`cont nued deve opment nc udes conduct ng support ve research and post approva c n ca stud es and seek ng potent a approva for
`add t ona nd cat ons. Genentech prov des the support funct ons for the commerc a zat on of RITUXAN n the U.S., nc ud ng market ng,
`customer serv ce, order entry, d str but on, sh pp ng and b ng, and has wor dw de manufactur ng respons b t es. The or g na co aborat on
`agreement w th Genentech was entered nto n 1995. In June 2003, we amended and restated the co aborat on agreement to nc ude the
`deve opment and commerc a zat on of other human zed ant -CD20 ant bod es target ng B-ce d sorders for a broad range of nd cat ons. We
`w share respons b ty w th Genentech for deve opment n the U.S. of any new products deve oped under the agreement, and we w a so
`copromote w th Genentech any such new products n the U.S.
`
` RITUXAN s approved n the U.S. for s ng e agent use n re apsed or refractory, ow grade or fo cu ar CD20-pos t ve B-ce NHL, wh ch
`compr se approx mate y ha f of the B-ce NHLs d agnosed n the U.S. RITUXAN s adm n stered as outpat ent therapy by personne tra ned
`n adm n ster ng chemotherap es or b o og cs. A standard course of RITUXAN therapy cons sts of four ntravenous nfus ons g ven on days
`one, e ght, 15 and 22, un ke chemotherapy wh ch s g ven typ ca y n repeat ng cyc es for up to four to e ght months. RITUXAN s a so
`approved to be adm n stered as an 8 dose reg men, for retreatment of pat ents w th B-ce NHL who have prev ous y responded to RITUXAN
`and for use n pat ents who have bu ky tumors. RITUXAN s un que n the treatment of B-ce NHLs due to ts spec f c ty for the ant gen
`CD20, wh ch s expressed on y on the surface of norma B ce s and ma gnant B ce s. Stem ce s ( nc ud ng B-ce progen tors or precursor
`B ce s) n bone marrow ack the CD20 ant gen. Th s a ows hea thy B-ce s to regenerate after treatment w th RITUXAN and return to norma
`eve s w th n severa months. RITUXAN’s mechan sm of act on ut zes the body s own mmune system as compared to convent ona
`ymphoma therap es.
`
` RITUXAN in Oncology In an effort to dent fy expanded app cat ons for RITUXAN, we, n conjunct on w th Genentech and Roche,
`cont nue to support RITUXAN post-market ng stud es. Ongo ng and comp eted Phase 2 and 3 stud es suggest that RITUXAN may have
`prom se as a front- ne therapy n comb nat on w th var ous chemotherap es n ndo ent and aggress ve B-ce NHLs, as a s ng e agent n the
`treatment of aggress ve B-ce NHLs and CLL, and as ma ntenance therapy n ndo ent B-ce NHLs. These stud es nc ude:
`
`• A random zed Phase 3 study of the add t on of RITUXAN to a chemotherapy reg men of cyc ophospham de, v ncr st ne and
`predn sone, a so known as CVP, n prev ous y untreated, or front ne pat ents w th ndo ent NHL. In th s nvest gator-run study, 321
`pat ents who had not rece ved prev ous treatment for CD20 pos t ve fo cu ar or ndo ent NHL were random zed to rece ve e ther CVP
`a one or CVP w th RITUXAN. The n t a resu ts of the study nd cated that the add t on of RITUXAN to CVP pro onged t me to
`treatment fa ure, the pr mary endpo nt of the study, to 26 months compared to seven months for pat ents treated w th CVP a one.
`Based on th s study, n January 2004, Roche f ed an app cat on w th the EMEA for a change to the MabThera abe to expand the
`nd cat on to nc ude front- ne treatment of ndo ent non-Hodgk n s ymphoma n comb nat on w th convent ona chemotherapy.
`
`• A random zed Phase 3 study, known as E4494, of pat ents age 60 or o der w th new y d agnosed, d ffuse, arge B ce , or aggress ve
`NHL, compar ng a chemotherapy reg men cons st ng of cyc ophospham de, doxorub n, v ncr st ne and predn sone, a so known as
`CHOP, a one to a reg men of
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`5
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`The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
`except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
`
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`RITUXAN p us CHOP, a so known as R-CHOP, as a front- ne or nduct on therapy fo owed by RITUXAN ma ntenance therapy or
`observat on for those pat ents who responded pos t ve y to e ther R-CHOP or CHOP a one. The study s a U.S. Intergroup study ed by
`the Eastern Cooperat ve Onco ogy Group (ECOG). The pr mary endpo nt of the nduct on and ma ntenance phases of the study was
`t me to treatment fa ure. Due to the observed nteract on between RITUXAN ma ntenance and nduct on therapy, add t ona ana yses
`were performed to compare nduct on therapy w th R-CHOP versus CHOP a one, remov ng the effects of subsequent RITUXAN
`ma ntenance therapy. Based on these add t ona ana yses, the nvest gators conc uded that pat ents who rece ved R-CHOP nduct on
`therapy exper enced pro onged t me to treatment fa ure and overa surv va compared to pat ents who rece ved nduct on therapy w th
`CHOP a one. In the ma ntenance phase of the study, pat ents treated w th RITUXAN ma ntenance for up to an add t ona two years
`after comp et ng nduct on therapy had a stat st ca y s gn f cant de ay n t me to treatment fa ure compared to pat ents who d d not
`rece ve RITUXAN ma ntenance therapy fo ow ng nduct on. At the t me of the nter m ana ys s, th s advantage appears predom nant y
`conf ned to pat ents who rece ved CHOP a one dur ng the nduct on phase. There appears to be no d fference n overa surv va
`between the RITUXAN ma ntenance and observat on arms, though the nvest gators be eve add t ona fo ow up s necessary.
`
`• A mu t -center, random zed Phase 2 study of 114 pat ents w th re apsed ndo ent NHL des gned to compare the eff cacy of RITUXAN
`ma ntenance therapy to retreatment w th RITUXAN. Ma ntenance therapy was def ned as treatment w th RITUXAN every s x months
`for two years w th the object ve of keep ng ymphoma from return ng or progress ng. Retreatment was def ned as wa t ng unt the
`d sease progressed pr or to adm n ster ng another course of RITUXAN. The n t a resu ts of th s nvest gator-run study showed that
`pat ents who rece ved RITUXAN ma ntenance therapy exper enced 31 months of progress on-free surv va as compared to e ght
`months of progress on-free surv va for those pat ents who rece ved retreatment.
`
`• A arge Phase 3 random zed study of 800 pat ents, known as M nT, des gned to eva uate RITUXAN n comb nat on w th chemotherapy
`as a front- ne treatment for aggress ve arge, B-ce NHL n pat ents age 18 to 60. Th s study, wh ch was conducted by an nternat ona
`cooperat ve group and sponsored by Roche, met ts pre-spec f ed pr mary eff cacy endpo nt ear y. A pre-p anned ana ys s of the study
`data by an ndependent data mon tor ng comm ttee demonstrated a stat st ca y s gn f cant mprovement n t me to treatment fa ure for
`pat ents rece v ng RITUXAN and chemotherapy compared to chemotherapy a one.
`
`• A Phase 3 study, known as E1496, des gned to compare RITUXAN ma ntenance therapy versus observat on n pat ents w th
`prev ous y untreated ndo ent NHL who ach eved stab e d sease or better after nduct on therapy w th CVP. The study, wh ch was ed by
`ECOG, met ts pre-spec f ed pr mary eff cacy endpo nt ear y. A pre p anned ana ys s of the study data by an ndependent ECOG Data
`Mon tor ng Comm ttee demonstrated a stat st ca y s gn f cant mprovement n t me to treatment fa ure for pat ents rece v ng RITUXAN
`ma ntenance therapy. At the t me the study was stopped, 322 pat ents who responded or had stab e d sease fo ow ng nduct on CVP
`chemotherapy had been random zed to rece ve e ther RITUXAN ma ntenance therapy or no further treatment. Data from th s study are
`expected to be presented at a med ca meet ng n 2004.
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` We, a ong w th Genentech and Roche, a so recent y n t ated a mu t center g oba Phase 3 reg strat ona study n pat ents w th re apsed
`CLL compar ng the use of f udarab ne, cyc ophospham de and RITUXAN together, known as FCR, versus f udarab ne and
`cyc ophospham de a one. Th s study s o