Table of Contents
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`(Mark One)
`
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`o
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`
`
`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, 2007
`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.
`
`(Exact name of registrant as specified in its charter)
`
`
`Delaware
`(State or other jurisdiction of
`incorporation or organization)
`14 Cambridge Center,
`Cambridge, Massachusetts
`
`(Address of principal executive offices)
`(Registrant’s telephone number, including area code)
`(617) 679-2000
`Securities registered pursuant to Section 12(b) of the Act:
`
`
`
`33-0112644
`(I.R.S. Employer
`Identification No.)
`02142
`(Zip code)
`
`
`
`N a m e o f E a c h E x c h a n g e o n W h i c h R e g i s t e r e d
`
`Title of Each Class
`
`
`Common Stock, $0.0005 par value
`
`The Nasdaq Global Select Market
`Series X Junior Participating Preferred Stock Purchase Rights
`Securities registered pursuant to Section 12(g) of the Act:
`None
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No o
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.. Yes o No 
`Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
`of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to
`such filing requirements for the past 90 days. Yes  No o
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
`contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
`Form 10-K or any amendment to this Form 10-K. o
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
`company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
`one):
`
`Non-accelerated filer o
` Smaller reporting company o
` Accelerated filer o
`(Do not check if a smaller reporting company)
`Large accelerated filer 
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of
`1934). Yes o No 
`The aggregate market value of the Registrant’s Common Stock held by non-affiliates of the Registrant (without admitting that any person whose
`shares are not included in such calculation is an affiliate) computed by reference to the price at which the common stock was last sold as of the last
`business day of the Registrant’s most recently completed second fiscal quarter was $18,378,524,103.
`As of February 8, 2008, the Registrant had 297,750,601 shares of Common Stock, $0.0005 par value, issued and outstanding.
`DOCUMENTS INCORPORATED BY REFERENCE
`Portions of the definitive Proxy Statement for our 2008 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.
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`MYLAN PHARMS. INC. EXHIBIT 1079 PAGE 1
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`MYLAN PHARMS. INC. EXHIBIT 1079 PAGE 1
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`BIOGEN IDEC INC.
`ANNUAL REPORT ON FORM 10-K
`For the Year Ended December 31, 2007
`TABLE OF CONTENTS
`
`
`PART I
`
` Business
` Overview
` Our Products and Late-Stage Product Candidates
` Products We No Longer Sell
` Our Other Research and Development Programs
` Research and Development Costs
` Principal Licensed Products
` Patents and Other Proprietary Rights
` Sales, Marketing and Distribution
` Competition
` Regulatory
` Manufacturing and Raw Materials
` Our Employees
` Our Executive Officers
` Risk Factors
` Unresolved Staff Comments
` Properties
` Legal Proceedings
` Submission of Matters to a Vote of Security Holders
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` F-1
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`Item 1.
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`Item 1A.
`Item 1B.
`Item 2.
`Item 3.
`Item 4.
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`Item 5.
`Item 6.
`Item 7.
`Item 7A.
`Item 8.
`Item 9.
`Item 9A.
`Item 9B.
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`Item 10.
`Item 11.
`Item 12.
`Item 13.
`Item 14.
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`
`PART II
` Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
` Selected Consolidated Financial Data
`
` Management’s Discussion and Analysis of Financial Condition and Results of Operations
`
` Quantitative and Qualitative Disclosures About Market Risk
`
` Consolidated Financial Statements and Supplementary Data
`
` Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`
` Controls and Procedures
`
` Other Information
`
`
`PART III
` Directors, Executive Officers and Corporate Governance
` Executive Compensation
` Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
` Certain Relationships and Related Transactions, and Director Independence
` Principal Accountant Fees and Services
`
`PART IV
`
` Exhibits, Financial Statement Schedules
`
`Item 15.
`Signatures
`Consolidated Financial Statements
`In this report, “Biogen Idec,” “we,” “us” and “our” refer to Biogen Idec Inc.
` Ex-10.22 1985 Non-Qualified Stock Option Plan
` Ex-10.33 Board of Directors - Annual Retainer Summary Sheet
` Ex-10.45 Amend. No.1 to 2006 Non-employee Directors Equity Plan
` Ex-10.49 Letter regarding employement arrangement of Paul J. Clancy
` Ex-10.50 Letter regarding employement arrangement of Robert Hamm
` Ex-10.51 Consulting Agreement, dated December 18, 2007
` Ex-10.52 Executive Severance Policy - Executive Vice President
` Ex-10.53 Executive Severance Policy - International Executive Vice President
` Ex-10.54 Executive Severance Policy - Senior Vice President
` Ex-10.55 Supplemental Savings Plan as amended and restated
` Ex-10.56 Voluntary Board of Directors Savings Plan
` Ex-21.1 Subsidiaries
` Ex-23.1 Consent of PricewaterhouseCoopers LLP
` Ex-31.1 Section 302 Certification of CEO
` Ex-31.2 Section 302 Certification of CFO
` Ex-32-1 Section 906 Certification of CEO & CFO
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`MYLAN PHARMS. INC. EXHIBIT 1079 PAGE 2
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`Table of Contents
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`PART I
`
`Item 1. Business
`Overview
`Biogen Idec creates new standards of care in therapeutic areas with high unmet medical needs. Biogen Idec is a global leader in the
`development, manufacturing, and commercialization of innovative therapies. Patients in more than 90 countries benefit from Biogen
`Idec’s significant products that address diseases such as multiple sclerosis, lymphoma and rheumatoid arthritis. We currently have four
`products:
`
`AVONEX® (interferon beta-1a)
`AVONEX is approved worldwide for the treatment of relapsing forms of multiple sclerosis, or MS, and is the most prescribed
`therapeutic product in MS worldwide. Globally over 135,000 patients use AVONEX.
`
`RITUXAN® (rituximab)
`RITUXAN is approved worldwide for the treatment of relapsed or refractory low-grade or follicular, CD20-positive, B-cell non-
`Hodgkin’s lymphomas, or B-cell NHLs. The U.S. Food and Drug Administration, or FDA, has also approved RITUXAN for (1) the
`treatment of patients with previously untreated diffuse, large B-cell NHL in combination with anthracycline-based chemotherapy
`regimens, (2) treatment of patients with previously-untreated follicular NHL in combination with CVP (cyclophosphamide, vincristine
`and prednisone) chemotherapy, and (3) the treatment of patients with non-progressing (including stable disease) low grade B-cell NHL
`following first-line treatment with CVP chemotherapy. We believe that RITUXAN is the second highest-selling oncology therapeutic in the
`United States and has had more than 1,000,000 patient exposures worldwide across all indications. In addition, RITUXAN, in
`combination with methotrexate, is also approved for reducing signs and symptoms and to slow the progression of structural damage in
`adult patients with moderately-to-severely active rheumatoid arthritis, or RA, who have had an inadequate response to one or more tumor
`necrosis factor, or TNF, antagonist therapies. We are working with Genentech and Roche on the development of RITUXAN in additional
`oncology, neurology and immunology indications.
`RITUXAN is the trade name for the compound rituximab in the U.S., Canada and Japan. MabThera is the trade name for
`rituximab in the European Union, or EU. In this Annual Report, we refer to rituximab, RITUXAN, and MabThera collectively as
`RITUXAN, except where we have otherwise indicated.
`
`TYSABRI® (natalizumab)
`TYSABRI is approved for the treatment of relapsing forms of MS in the U.S. and other countries, and in the U.S. for inducing and
`maintaining clinical response and remission in adult patients with moderately to severely active Crohn’s disease, or CD, with evidence of
`inflammation who have had an inadequate response to, or are unable to tolerate, conventional CD therapies and inhibitors of TNF-alpha.
`Under the terms of a collaboration agreement with Elan Corporation plc, or Elan, we are solely responsible for the manufacture of
`TYSABRI, and we collaborate with Elan on the product’s marketing, commercial distribution and on-going development activities. The
`collaboration agreement with Elan is designed to effect an equal sharing of profits and losses generated by the activities of the collaboration
`between Elan and us.
`
`FUMADERM® (dimethylfumarate and monoethylfumarate salts)
`FUMADERM was acquired with the purchase of Fumapharm AG, or Fumapharm, in June 2006. In December 2006, we acquired
`the right to distribute FUMADERM in Germany from Fumedica effective May 1, 2007. FUMADERM acts as an immunomodulator and
`has been approved in Germany for the treatment of severe psoriasis since 1994.
`
`Other Revenue and Programs
`In 2007, we recorded product revenues from sales of ZEVALIN® (ibritumomab tiuxetan) prior to our sale of U.S. rights to this
`product line in December 2007.
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`1
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`Table of Contents
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`We also receive royalty revenues on sales by our licensees of a number of products covered under patents that we control. In
`addition, we have a pipeline of research and development products in our core therapeutic areas and in other areas of interest.
`We devote significant resources to research and development programs and external business and corporate development efforts. We
`intend to focus our research and development efforts on finding novel therapeutics in areas of high unmet medical need, both within our
`current focus areas of oncology, neurology, immunology and cardiology as well as in new therapeutic areas. Our current late stage efforts
`include our work with Genentech and Roche on the development of RITUXAN in additional oncology indications, RA, MS and lupus
`and the co-development of additional anti-CD20 antibody products including the humanized anti-CD20 antibody (ocrelizumab), which is
`in Phase 3 studies in rheumatoid arthritis and systemic lupus erythematosus; BG-12 for relapsing forms of MS in Phase 3; galiximab for
`NHL in Phase 3; and lumiliximab for chronic lymphocytic leukemia, or CLL, in Phase 2/3; and lixivaptan for acute hyponatremia,
`currently initiating Phase 3 clinical studies.
`
`Available Information
`We are a Delaware corporation with principal executive offices located at 14 Cambridge Center, Cambridge, Massachusetts 02142.
`Our telephone number is (617) 679-2000 and our website address is www.biogenidec.com. We make available free of charge through the
`Investor Relations section of our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
`Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or
`furnished to the Securities and Exchange Commission, or the SEC. We include our website address in this Annual Report on Form 10-K
`only as an inactive textual reference and do not intend it to be an active link to our website. You may read and copy materials we file with
`the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may get information on the
`operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports,
`proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
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`2
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`Table of Contents
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`Our Products and Late-Stage Product Candidates
`Our products are targeted to address a variety of key medical needs in the areas of oncology, neurology, immunology and cardiology.
`Our marketed products and late stage product candidates are as follows:
`
`
`Product
`AVONEX
`
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`RITUXAN
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`Product Indications
`Relapsing forms of MS
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`Certain B-cell NHLs
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`Rheumatoid arthritis
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` Relapsed CLL
` Lupus
`MS
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`TYSABRI
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`Relapsing forms of MS
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`Status
`Approved — numerous countries
`worldwide
`Approved — numerous countries
`worldwide
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`Approved — U.S. for anti-TNF-
`inadequate responders
`Phase 3 — DMARD inadequate
`
`responders
` Phase 3
` Phase 2/3
`Phase 2/3
`
`
`
`Approved — U.S., EU Switzerland,
`Canada, Australia, New Zealand and
`
`Israel
` Approved — U.S.
` Approved — Germany
` Phase 3
`Phase 3
`
`
`
`Development and/or
`Marketing Collaborators
`
`None
`
`All RITUXAN Indications:
`U.S. — Genentech
`Japan — Roche and Zenyaku
`Outside U.S. and Japan — Roche
`See above
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`
`See above
`
`
` See above
` Genentech
`See above, except for PPMS
`indication which is only Genentech
`Elan
`
`
`
`
` See above
` Almirall
` None
`None
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`
`None
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`U.S. — Genentech Japan — Roche
`and Zenyaku Outside U.S. and
`
`Japan — Roche
` See above
` Cardiokine Biopharma LLC
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`FUMADERM
`BG-12
`Anti-CD80 MAb/
`galiximab
`Anti-CD23 MAb/
`lumiliximab
`Humanized Anti-CD20
`MAb/Ocrelizumab
`
`
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`
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`Lixivaptan
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` Crohn’s disease
` Severe psoriasis
` MS
`Relapsed or refractory NHL
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`Relapsed or refractory chronic
`lymphocytic leukemia
`Rheumatoid Arthritis
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`Phase 2/3
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`Phase 3
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` Systemic Lupus Erythematosus
` Acute Hyponatremia
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` Phase 3
` Phase 3 — planned
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`Approved Indications and Ongoing Development
`AVONEX
`We currently market and sell AVONEX worldwide for the treatment of relapsing forms of MS. In 2007, sales of AVONEX generated
`worldwide revenues of $1,867.8 million as compared to worldwide revenues of $1,706.7 million in 2006.
`MS is a progressive neurological disease in which the body loses the ability to transmit messages along nerve cells, leading to a loss
`of muscle control, paralysis and, in some cases, death. Patients with active relapsing MS experience an uneven pattern of disease
`progression characterized by periods of stability that are interrupted by flare-ups of the disease after which the patient returns to a new
`baseline of functioning. AVONEX is a recombinant form of a protein produced in the body by fibroblast cells in response to viral
`infection. AVONEX has been shown in clinical trials in relapsing forms of MS both to slow the accumulation of disability and to reduce
`the frequency of flare-ups. AVONEX is approved to treat relapsing forms of MS, including patients with a first clinical episode and MRI
`features consistent with MS. We began selling AVONEX in the U.S. in 1996, and in the EU in 1997. AVONEX is on the market in over
`70 countries. Based on data from an independent third party research organization, information from our distributors and internal
`analysis, we believe that AVONEX is the most prescribed therapeutic product for the treatment of MS worldwide. Globally over
`135,000 patients use AVONEX.
`We continue to work to expand the data available about AVONEX and MS treatments. In October 2007, we presented at the Congress
`of the European Committee for Treatment and Research of Multiple Sclerosis, or ECTRIMS, in Prague, Czech Republic, on the final
`results from a worldwide comparative study (QUASIMS) of the efficacy and tolerability of interferon-beta products for the treatment of
`relapsing multiple sclerosis. This retrospective, observational study presented at ECTRIMS involved 7,542 MS patients. This
`geographically diverse
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`group from a range of clinical practice settings is the largest cohort of patients with relapsing remitting MS, or RRMS, that has been
`studied to evaluate and compare patient outcomes with interferon beta. The effects of all currently available interferon beta treatments were
`similar over 2 years in patients with RRMS. Even in patients with higher baseline annualized relapse rates or expanded disability status
`scale scores, there was no clear benefit of one interferon over another. This is in contrast to two earlier studies suggesting there were
`differences in efficacy between certain interferon beta formulations and dosing regimens (the Independent Comparison of Interferon
`(INCOMIN) and Evidence of Interferon Dose-Response and European — North American Comparative Efficacy (EVIDENCE) trials).
`Of the treatments studied, however, AVONEX requires the least frequent administration.
`We have also extended the Controlled High Risk AVONEX Multiple Sclerosis Prevention Study In Ongoing Neurological
`Surveillance, or CHAMPIONS. CHAMPIONS was originally designed to determine whether the effect of early treatment with AVONEX
`in delaying relapses and reducing the accumulation of MS brain lesions could be sustained for up to five years. The study results showed
`that AVONEX altered the long-term course of MS in patients who began treatment immediately after their initial MS attack compared to
`initiation of treatment more than two years after onset of symptoms. The five-year study extension is intended to determine if the effects of
`early treatment with AVONEX can be sustained for up to ten years. We also continue to support Phase 4 investigator-run studies
`evaluating AVONEX in combination with other therapies.
`
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`RITUXAN
`RITUXAN is approved worldwide for the treatment of relapsed or refractory low-grade or follicular, CD20-positive, B-cell NHLs,
`which comprise approximately half of the B-cell NHLs diagnosed in the U.S. In the U.S., RITUXAN is approved for NHL with the
`following label indications:
`
`• The treatment of patients with relapsed or refractory, low-grade or follicular, CD20-positive, B-cell NHL as a single agent;
`
`• The treatment of patients with previously untreated diffuse large B-cell, CD20-positive, NHL, or DLBCL, in combination with
`CHOP (cyclophosphamide, doxorubicin, vincristine and prednisone) or other anthracycline-based chemotherapy regimens;
`• The treatment of patients with previously untreated follicular, CD20-positive, B-cell NHL in combination with CVP
`(cyclophosphamide, vincristine and prednisone) chemotherapy; and
`• The treatment of patients with non-progressing (including stable disease), low grade CD20-positive, B-cell NHL, as a single
`agent, after first line CVP chemotherapy.
`In addition, RITUXAN, in combination with methotrexate, is also approved for reducing signs and symptoms and to slow the
`progression of structural damage in adult patients with moderately-to-severely active rheumatoid arthritis, or RA, who have had an
`inadequate response to one or more TNF antagonist therapies.
`Our interest in RITUXAN is recognized as revenue from unconsolidated joint business, and is made up of three components:
`• We copromote RITUXAN in the U.S. in collaboration with Genentech. All U.S. sales of RITUXAN are recognized by
`Genentech, and we record our share of the pretax copromotion profits on a quarterly basis. In 2007, RITUXAN generated
`U.S. net sales of $2.3 billion, of which we recorded $616.8 million as our share of copromotion profits, as compared to
`U.S. net sales of $2.1 billion in 2006, of which we recorded $555.8 million as our share of copromotion profits;
`• Roche sells RITUXAN outside the U.S., except in Japan where it co-markets RITUXAN in collaboration with Zenyaku Kogyo
`Co. Ltd., or Zenyaku. We received royalties through Genentech on sales of RITUXAN outside of the U.S. of $250.8 million in
`2007 as compared to $194.0 million in 2006; and
`• Finally, we receive reimbursement from Genentech for our selling and development expenses.
`In the U.S., we share responsibility with Genentech for continued development. Such continued development includes conducting
`supportive research and post-approval clinical studies and seeking potential approval for additional indications. Genentech provides the
`support functions for the commercialization of RITUXAN in the U.S. and has worldwide manufacturing responsibilities. See “Sales,
`Marketing and Distribution — RITUXAN” and “Manufacturing and Raw Materials.” We also have the right to collaborate with
`Genentech on the development of
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`other humanized anti-CD20 antibodies targeting B-cell disorders for a broad range of indications, and to copromote with Genentech any
`new products resulting from such development in the U.S. The most advanced such humanized anti-CD20 antibody under development,
`ocrelizumab, is in Phase 3 trials in rheumatoid arthritis and systemic lupus erythematosus. We are currently in arbitration with
`Genentech as to whether Genentech has the right to develop collaboration products, including the second-generation humanized anti-CD20
`molecule, without our approval. See “Item 3 — Legal Proceedings” for a description of that arbitration. Our agreement with Genentech
`provides that the successful development and commercialization of new anti-CD20 product candidates in our collaboration (which also
`includes RITUXAN) will decrease our participation in the operating profits from the collaboration (including as to RITUXAN). See
`Consolidated Financial Statements Note 16, Unconsolidated Joint Business Arrangement.
`
`RITUXAN in Oncology
`We believe that RITUXAN is the second-highest-selling oncology therapeutic in the United States and has had more than
`1,000,000 patient exposures worldwide across all indications. RITUXAN is generally administered as outpatient therapy by personnel
`trained in administering chemotherapies or biologics. RITUXAN is unique in the treatment of B-cell NHLs due to its specificity for the
`antigen CD20, which is expressed only on the surface of normal B-cells and malignant B-cells. Stem cells (including B-cell progenitors or
`precursor B-cells) in bone marrow lack the CD20 antigen. This allows healthy B-cells to regenerate after treatment with RITUXAN and to
`return to normal levels within several months. RITUXAN’s mechanism of action, in part, utilizes the body’s own immune system as
`compared to conventional lymphoma therapies.
`In an effort to identify additional applications for RITUXAN, we, in conjunction with Genentech and Roche, continue to support
`RITUXAN post-marketing studies. We, along with Genentech and Roche, are conducting a multi-center global Phase 3 registrational
`study known as REACH in patients with relapsed chronic lymphocytic leukemia, or CLL, comparing the use of fludarabine,
`cyclophosphamide and RITUXAN together, known as FCR, versus fludarabine and cyclophosphamide alone. Enrollment for this study
`was completed in the third quarter of 2007. We, along with Genentech and Roche, are also conducting a trial known as PRIMA that is
`evaluating the added efficacy of RITUXAN maintenance therapy after previously untreated follicular non-Hodgkin’s lymphoma patients
`are given a combination of chemotherapy and RITUXAN. To date, the added benefit of RITUXAN has only been evaluated in relapsed
`patients. PRIMA completed enrollment in 2007. Additional clinical studies are ongoing in other B-cell malignancies such as
`lymphoproliferative disorders associated with solid organ transplant therapies, relapsed aggressive non-Hodgkin’s lymphoma and mantle
`cell non-Hodgkin’s lymphoma.
`
`RITUXAN in RA
`RITUXAN, in combination with methotrexate, is approved for reducing signs and symptoms and to slow the progression of
`structural damage in adult patients with moderately-to-severely active rheumatoid arthritis who have had an inadequate response to one or
`more TNF antagonist therapies. We, along with Genentech and Roche, initiated a Phase 3 clinical study of RITUXAN in RA patients who
`are inadequate responders to disease-modifying anti-rheumatic drugs, or DMARDs, in 2006. In January 2008 we announced that the
`study, known as SERENE, met its primary endpoint of a significantly greater proportion of RITUXAN-treated patients achieving an
`American College of Rheumatology (ACR) 20 response (the proportion of patients who achieve at least 20% improvement) at week 24,
`compared to placebo. In this study patients who received either 500 mg or 1000 mg of RITUXAN as a single treatment course of two
`infusions in combination with a stable dose of methotrexate displayed a statistically significant improvement in symptoms compared to
`patients who received placebo in combination with methotrexate. Although the study was not designed to compare the RITUXAN doses,
`the efficacy of the two doses appeared to be similiar. Further analyses of the data are ongoing and will be submitted for presentation at an
`upcoming medical meeting. In 2007 we received positive results from the Phase 3 study known as SUNRISE, investigating the controlled
`re-treatment of patients who are inadequate responders to TNF therapies. Patients who were not in remission at 24 weeks following
`administration of a course of RITUXAN were randomized to receive either a second course of RITUXAN or placebo. The primary
`endpoint, the proportion of retreated patients with an ACR 20 response at Week 48 relative to baseline, was achieved with significantly
`more patients achieving an ACR 20 with RITUXAN retreatment compared to placebo. Genentech and Biogen Idec will continue to analyze
`the study results and we anticipate presenting the results at an upcoming meeting in 2008.
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`RITUXAN in Other Immunology Indications
`Based primarily on results from the studies of RITUXAN in RA, as well as other small investigator-sponsored studies in various
`autoimmune-mediated diseases, we, along with Genentech, are conducting a Phase 3 clinical study of RITUXAN in primary progressive
`MS, or PPMS, and a registrational program in systemic lupus erythematosus, or SLE, comprised of a Phase 3 study in lupus nephritis
`and a Phase 2/3 study in a general SLE population. We anticipate reporting results from the PPMS and SLE studies in the first half of
`2008. Enrollment in the Lupus Nephritis study is still ongoing. In August 2006, we and Genentech announced that a Phase 2 study of
`RITUXAN in relapsing-remitting MS met its primary endpoint. Results were presented at the American Academy of Neurology annual
`meeting in May 2007. The study of 104 patients showed a statistically significant reduction in the total number of gadolinium enhancing
`T1 lesions observed on serial MRI scans of the brain at weeks 12, 16, 20 and 24 in the RITUXAN-treated group compared to placebo. At
`week 24, the total cumulative mean number of gadolinium lesions per patient was reduced by 91%, to 0.5 in the RITUXAN-treated group
`from 5.5 in the placebo group (p0.001). In addition, the proportion of patients with relapses over 24 weeks in the RITUXAN-treated arm
`was 14.5% compared to 34.3% in the placebo arm (58% relative reduction) (p=0.02). The result of statistical testing is often defined in
`terms of a “p-value,” with a level of 0.05 or less considered to be a statistically significant difference, which means the result is unlikely
`due to chance.
`
`In December 2006, we and Genentech issued a dear healthcare provider letter informing healthcare providers that two cases of
`progressive multifocal leukoencephalopathy, or PML, a rare and frequently fatal demyelinating disease of the central nervous system,
`resulting in death were reported in patients receiving RITUXAN for treatment of SLE, an indication where RITUXAN is not approved for
`treatment. The prescribing information for RITUXAN has been updated to reflect these reports.
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`TYSABRI
`TYSABRI is approved for the treatment of relapsing forms of MS. On June 5, 2006, we and Elan announced the FDA’s approval
`of the supplemental Biologics License Application, or sBLA, for the reintroduction of TYSABRI as a monotherapy treatment for
`relapsing forms of MS to slow the progression of disability and reduce the frequency of clinical relapses. On June 29, 2006, we and Elan
`announced that the European Medicines Agency, or EMEA, had approved TYSABRI as a similar treatment. TYSABRI is also approved
`for MS in Switzerland, Canada, Australia, New Zealand and Israel.
`TYSABRI was initially approved by the FDA in November 2004 to treat relapsing forms of MS to reduce the frequency of clinical
`relapses. In February 2005, in consultation with the FDA, we and Elan voluntarily suspended the marketing and commercial distribution
`of TYSABRI based on reports of cases of PML in patients treated with TYSABRI in clinical studies. In consideration of these events,
`TYSABRI is marketed under risk management or minimization plans as agreed with local regulatory authorities. In the U.S., TYSABRI
`was reintroduced with a risk minimization action plan, or RiskMAP, known as the TYSABRI Outreach: Unified Commitment to
`Health, or TOUCH, Prescribing Program, a rigorous system intended to educate physicians and patients about the risks involved and
`assure appropriate use of the product.
`As of late December 2007, more than 21,000 patients were on commercial and clinical TYSABRI therapy worldwide. As of mid-
`December 2007, up to 30,900 patients had been treated with TYSABRI cumulatively in the combined clinical trial and post-marketing
`settings. There have been no new cases of PML since relaunch in the U.S. and launch internationally in July 2006.
`On January 14, 2008, we and Elan announced the FDA’s approval of the sBLA for use of TYSABRI for inducing and maintaining
`clinical response and remission in adult patients with moderately to severely active Crohn’s disease, or CD, with evidence of
`inflammation who have had an inadequate response to, or are unable to tolerate, conventional CD therapies and inhibitors of TNF-alpha.
`TYSABRI will be available for the treatment of CD upon the completion of key implementation activities related to the approved risk
`management plan. We anticipate TYSABRI will be available to Crohn’s patients by the end of the first quarter of 2008.
`The FDA granted approval based on its review of overall safety data and the results of three randomized, double-blind, placebo-
`controlled, multi-center trials of TYSABRI assessing the safety and efficacy as both an induction and maintenance therapy — ENCORE
`(Efficacy of Natalizumab in Crohn’s Disease Response and Remission), ENACT-1 (Efficacy of Natalizumab as Active Crohn’s
`Therapy) and ENACT-2 (Evaluation of
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`Natalizumab As Continuous Therapy). The approval contains labeling and a risk management plan, both of which are similar to those
`approved for the MS indication. One of the confirmed cases of PML was in a patient who was in a clinical study of TYSABRI in
`Crohn’s disease.
`In September 2004, Elan submitted a Marketing Authorisation Application, or MAA, to the EMEA for approval of TYSABRI as a
`treatment for Crohn’s disease. A committee of the EMEA adopted a negative recommendation in November 2007. The European
`Commission affirmed the committee’s decision in the first quarter of 2008, which means that Crohn’s disease will not be included in our
`label for TYSABRI in the EU.
`TYSABRI binds to adhesion molecules on the immune cell surface known as alpha-4 integrin. Adhesion molecules on the surface of
`the immune cells play an important role in the migration of the immune cells in the inflammatory process. Research suggests that by
`binding to alpha-4 integrin, TYSABRI prevents immune cells from migrating from the bl