Table of Contents
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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, 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.
`
`(Exact name of registrant as specified in its charter)
`
`
`
`
`
`Delaware
`(State or other jurisdiction of
`incorporation or organization)
`
`33-0112644
`(I.R.S. Employer
`Identification No.)
`
`14 Cambridge Center, Cambridge, Massachusetts 02142
`
`(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)
`
` 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. 
`
` Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes  No o
`
` 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 fiscal quarter was $4,762,181.085.
`
` As of February 20, 2004, the Registrant had 331,996,625 shares of Common Stock, $0.0005 par value, issued and outstanding.
`
`MYLAN PHARMS. INC. EXHIBIT 1076 PAGE 1
`
`

`

` Portions of the definitive Proxy Statement for our 2004 Annual Meeting of Stockholders are incorporated by reference into Part III of this
`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
`
`
`
`
`
` PART I
`
`
` Business
`
` Overview
`
` Our Products and Primary Product Candidates — Table
`
` Our Products
`
` Our Primary Product Candidates
`
` 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
`
` Forward-Looking Information and Risk Factors That May Affect Future Results
` Properties
`
` Legal Proceedings
`
` Submission of Matters to a Vote of Security Holders
`
` PART II
`
` Market for Registrant’s Common Equity and Related Stockholder Matters
`
` 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
` PART III
` Directors and Executive Officers of the Registrant
` Executive Compensation
` Security Ownership of Certain Beneficial Owners and Management and
`Related Stockholder Matters
` Certain Relationships and Related Transactions
` Principal Accounting Fees and Services
` PART IV
` Exhibits, Financial Statement Schedules, and Reports on Form 8-K
`
`
`
`Page
`
`
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`1
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` 60
` 60
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` 62
` 68
` F-1
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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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` Item 15.
` Signatures
` Consolidated Financial Statements and Schedule
` 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
`
`MYLAN PHARMS. INC. EXHIBIT 1076 PAGE 2
`
`

`

` 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 PricewaterhouseCoopers 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
`
`i
`
`MYLAN PHARMS. INC. EXHIBIT 1076 PAGE 3
`
`

`

`Table of Contents
`
`
`Item 1.
`
`Overview
`
`Business.
`
`PART I
`
` In November 2003, Biogen, Inc. and IDEC Pharmaceuticals Corporation merged under the name Biogen Idec Inc., bringing together the
`complementary strengths of each company. Biogen Idec creates new standards of care in oncology and immunology. As a global leader in the
`development, manufacturing, and commercialization of novel therapies, we transform scientific discoveries into advances in human
`healthcare. We currently have four commercial products: AVONEX® (Interferon beta-1a) for the treatment of relapsing multiple sclerosis, also
`known as MS, RITUXAN® (rituximab) and ZEVALIN® (ibritumomab tiuxetan), both of which treat certain B-cell non-Hodgkin’s lymphomas,
`also referred to as B-cell NHLs, and AMEVIVE® (alefacept) for the treatment of adult patients with moderate-to-severe chronic plaque
`psoriasis who are candidates for systemic therapy or phototherapy. We also receive revenues from royalties on sales by our licensees of a
`number of products covered under patents that we control including sales of RITUXAN outside the U.S. In addition, we have a pipeline of
`development stage products and a number of research programs in our core therapeutic areas and in other areas of interest.
`
` AVONEX is the most prescribed therapeutic product in MS worldwide. Globally over 125,000 patients have chosen AVONEX as their
`treatment of choice. In 2003, sales of AVONEX generated worldwide revenues of $1.16 billion as compared to revenues of $1.03 billion from
`sales of AVONEX in 2002.
`
` RITUXAN, the first monoclonal antibody approved by the U.S. Food and Drug Administration for a cancer therapy indication, is currently
`marketed and sold worldwide for the treatment of various B-cell NHLs. We market RITUXAN in the U.S. in collaboration with Genentech,
`Inc. 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 2003, RITUXAN generated U.S. net sales of $1.36 billion of which we recorded $419.2 million as our share of copromotion profits as
`compared to U.S. net sales of $1.08 billion in 2002 of which we recorded $324.5 million as our share of copromotion profits. F. Hoffmann-
`La Roche Ltd. sells rituximab outside the U.S., except in Japan where it copromotes RITUXAN in collaboration with Zenyaku Kogyo Co. Ltd.
`We received royalties on sales of rituximab outside of the U.S. of $67.9 million in 2003 as compared to $45.4 million in 2002. RITUXAN is
`the trade name used for rituximab in the U.S., Canada and Japan, and MabThera is the trade name in the European Union, or EU. In this
`Form 10-K, we refer to rituximab, RITUXAN and MabThera collectively as RITUXAN, except where we have otherwise indicated.
`
` In February 2002, ZEVALIN became the first radioimmunotherapy approved by the FDA for the treatment of cancer. ZEVALIN is approved
`as a treatment for relapsed or refractory low-grade, follicular, or transformed B-cell NHL including patients with RITUXAN refractory follicular
`NHL. We launched ZEVALIN in the U.S. in April 2002. In 2003, sales of ZEVALIN in the U.S. generated revenues of $19.6 million as
`compared to revenues of $13.7 million in 2002. Outside the U.S., we have licensed our marketing rights in ZEVALIN to Schering AG. In
`January 2004, the European Agency for the Evaluation of Medicinal Products, or EMEA, the regulatory authority in the EU, granted
`marketing approval of ZEVALIN in the EU for the treatment of adult patients with CD20+ follicular B-cell NHL who are refractory to or have
`relapsed following RITUXAN therapy.
`
` AMEVIVE was approved in the U.S. in January 2003 for the treatment of adult patients with moderate-to-severe chronic plaque psoriasis
`who are candidates for systemic therapy or phototherapy. In 2003, sales of AMEVIVE generated revenues of $40.4 million. In February 2003,
`the European Committee for Proprietary Medicinal Products, the scientific advisory board of the EMEA, determined that more information
`was required to approve AMEVIVE in the EU. We withdrew our application for approval. We plan to develop the additional information
`necessary to obtain approval of AMEVIVE for the treatment of psoriasis in the EU. Developing the data and re-filing the application may take
`several years.
`
` In addition to ongoing development work with our marketed products, including studies of RITUXAN in rheumatoid arthritis, we continue
`to devote significant resources to other ongoing development efforts. These
`
`1
`
`MYLAN PHARMS. INC. EXHIBIT 1076 PAGE 4
`
`

`

`Table of Contents
`
`efforts include our collaboration with Elan Corporation plc on the development of ANTEGREN® (natalizumab), as a potential treatment for
`MS, Crohn’s disease and rheumatoid arthritis, our collaboration with Fumapharm AG on development of an oral therapy as a potential
`treatment for psoriasis and MS, our development of Anti-CD80 (Anti-B7.1) as a potential treatment for non-Hodgkin’s lymphomas, also
`referred to as NHLs, and autoimmune diseases, and our development of Anti-CD23 as a potential treatment for allergic rhinitis, allergic
`asthma and chronic lymphocytic leukemia, also referred to as CLL.
`
` We also have a number of preclinical and earlier-stage research programs. Our research strategy is to direct our primary effort toward
`finding therapeutics in our focus areas: oncology, neurology, dermatology and rheumatology. We supplement our internal research efforts to
`find novel therapeutics in these areas and in other areas of interest with genomics tools and other innovative technologies. We also seek to
`advance our research efforts through collaborations. We believe that our biologically-focused research strength, along with expertise in protein
`and bio-organic chemistry, will allow us to be in a position to capitalize on the potential of the post-genomics era.
`
` Merger. On November 12, 2003, Bridges Merger Corporation, a wholly owned subsidiary of IDEC Pharmaceuticals Corporation, was
`merged with and into Biogen, Inc. with Biogen, Inc. continuing as the surviving corporation and a wholly owned subsidiary of IDEC
`Pharmaceuticals Corporation. At the same time, IDEC Pharmaceuticals Corporation changed its name to Biogen Idec Inc. The merger and
`name change were made under an Agreement and Plan of Merger dated as of June 20, 2003. As a result of the merger, each issued and
`outstanding share of Biogen, Inc. common stock was converted into the right to receive 1.15 shares of Biogen Idec common stock. Our stock
`trades on the Nasdaq National Market under the symbol BIIB. The results of Biogen, Inc.’s operations from November 13, 2003, the day after
`the effective date of the merger, to December 31, 2003 have been included in the consolidated financial statements filed in this Annual Report
`on Form 10-K.
`
` 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 web site address is www.biogenidec.com. We make available free
`of charge through the Investor Relations section of our web site 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 web site 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 web site.
`
`2
`
`MYLAN PHARMS. INC. EXHIBIT 1076 PAGE 5
`
`

`

`Table of Contents
`
`Our Products and Primary Product Candidates — Table
`
` Our products and our primary product candidates are targeted to address a variety of key medical needs in the areas of oncology,
`neurology, dermatology and rheumatology. These products and product candidates and our development and/or marketing partners, if any,
`are described in the following table.
`
`
`
` AVONEX
`
` RITUXAN
`
` Candidate
`
`
`
`
`
`
`
`
` ZEVALIN
`
` AMEVIVE
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Product/Product
`Indication(s)
`
`Certain forms of MS
`
`Certain B-cell NHLs
`
`Rheumatoid arthritis
`
`CLL
`
`Certain B-cell NHLs
`(radioimmunotherapy)
`
`Moderate-to-severe chronic
`plaque psoriasis
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Status
`
`Approved — Worldwide
`
`Approved — Worldwide
`
`Phase 3
`
`Phase 3
`
`Approved — U.S. and EU
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`None
`
`Development and/or
`Marketing Partners
`
`Genentech (U.S.) Roche outside
`U.S. and Japan)
`Zenyaku and Roche (Japan)
`
`Genentech (U.S.) Roche (outside
`U.S. and Japan)
`
`Genentech (U.S.) Roche (outside
`U.S. and Japan)
`
`Schering AG (outside U.S.)
`
`None
`
` ANTEGREN
`
`
`
`
`
`
`
`
` Oral Fumarate
`
`
`
`
`
` Anti-CD80 (Anti-B7.1)
`
` Anti-CD23
`
` MS
`
`
`Crohn’s disease
`
`
`
`
`
`
`
`
`
`
`Rheumatoid arthritis
`
`Psoriasis
`
`
` MS
`
`NHL
`
`Allergic rhinitis, allergic
`asthma and CLL
`
`
`
`
`
`Approved — U.S.
`Withdrawn — EU; Under
`regulatory review — Australia,
`Canada, Israel, New Zealand,
`and Switzerland
`
`Phase 3; expect to file BLA
`with FDA mid-year 2004
`
`
`
`
`
`Phase 3; additional Phase 3
`trial expected to begin in 2004
`
`Phase 2 expected to begin in
`first half of 2004
`
`Phase 3 in EU; Second
`Phase 3 expected to begin in
`first half of 2005
`
`Phase 2 expected to begin in
`second half of 2004
`
`Completed Phase 1/2 in
`relapsed or refractory follicular
`lymphoma
`
`Phase 1/2 in allergic asthma;
`Phase 2 pilot in seasonal
`allergic rhinitis; Phase 1 in
`CLL
`
`
`
`
`
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`
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`
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`
`3
`
`Elan
`
`Elan
`
`Elan
`
`Fumapharm (development in
`EU; marketing in Germany)
`
`None
`
`None
`
`None
`
`MYLAN PHARMS. INC. EXHIBIT 1076 PAGE 6
`
`

`

`Table of Contents
`
`Our Products
`
`
`
`AVONEX
`
` We currently market and sell AVONEX worldwide for the treatment of relapsing MS. In 2003, sales of AVONEX generated worldwide
`revenues of $1.17 billion as compared to revenues of $1.03 billion in 2002. Prior to the merger, AVONEX was sold by Biogen, Inc. Our 2003
`consolidated financial statements include only those operations of Biogen, Inc. that occurred during the period between November 13, 2003,
`the day after the effective date of the merger, and December 31, 2003. Our revenues from AVONEX during this post-merger period were
`$142.6 million.
`
` 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 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 the disease both to slow the accumulation of disability and to reduce the frequency of flare-ups. Biogen,
`Inc. began selling AVONEX in the U.S. in 1996, and in the EU in 1997. Currently AVONEX is on the market in more than 60 countries.
`Based on data from an independent third party research organization, our distributors and internal analysis, we believe that AVONEX is the
`most prescribed therapeutic product for the treatment of MS worldwide. Globally, over 125,000 patients have selected AVONEX as their
`treatment of choice. AVONEX is also the only product in the MS market that is currently covered by Medicare.
`
` As part of our commitment to AVONEX, we work to make treatment more convenient. In May 2003, the FDA approved a new pre-filled
`syringe formulation which became available in the U.S. in August 2003 and replaced the dry powder form. We plan to reintroduce the dry
`powder form as an additional alternative in the U.S. in 2004. The new formulation was approved by the EMEA in July 2003 and is being
`made available in the EU on a country-by-country basis. We continue to explore other ways to improve the delivery and convenience of
`AVONEX.
`
` We also continue to work to expand the quantity and quality of data available about AVONEX. The AVONEX label was amended in
`January 2003 to include in the indication section MS patients with a first clinical episode and MRI features consistent with MS. This label
`change is based on the data from our Controlled High Risk AVONEX Multiple Sclerosis Prevention Study, or CHAMPS. In CHAMPS,
`AVONEX was shown to have a highly statistically significant beneficial effect on delaying the onset of a second exacerbation in patients who
`had experienced a single neurological event consistent with MS. Based on the CHAMPS data, the regulatory authorities in the EU made a
`similar change to the AVONEX label in 2002. Given the chronic nature of MS, we continue to study the long-term use of AVONEX. In May
`2003, we announced that data presented at the Consortium of Multiple Sclerosis Centers’ annual meeting demonstrated that AVONEX was
`generally well tolerated and produced low levels of neutralizing antibodies in patients treated for up to eight years
`
` An important component of our activities related to AVONEX is our ongoing clinical trial work. In September 2003, we announced the
`results of our Controlled High Risk AVONEX Multiple Sclerosis Prevention Study In Ongoing Neurological Surveillance, or CHAMPIONS,
`an extension of CHAMPS, which was 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. We decided to extend CHAMPIONS for an additional five years in order to determine if the effects of
`early treatment can be sustained for up to 10 years. We also recently completed a long-term, safety extension study of AVONEX in patients
`with relapsing MS and continue to support Phase 4 investigator-run studies evaluating AVONEX in combination with other therapies.
`
`4
`
`MYLAN PHARMS. INC. EXHIBIT 1076 PAGE 7
`
`

`

`Table of Contents
`
`
`
`RITUXAN
`
` RITUXAN, the first monoclonal antibody approved in the U.S. for a cancer therapy indication, is currently marketed and sold worldwide
`for the treatment of various B-cell NHLs. We market RITUXAN in the U.S. in collaboration with Genentech. In 2003, RITUXAN generated
`U.S. net sales of $1.36 billion of which we recorded $419.2 million as our share of copromotion profits as compared to U.S. net sales of
`$1.08 billion in 2002 of which we recorded $324.5 million as our share of copromotion profits. Roche sells RITUXAN outside the U.S.,
`except in Japan where it copromotes RITUXAN in collaboration with Zenyaku. We received royalties on sales of RITUXAN outside of the
`U.S. of $67.9 million in 2003 as compared to $45.4 million in 2002.
`
` In the U.S., we copromote RITUXAN with Genentech and 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., including marketing,
`customer service, order entry, distribution, shipping and billing, and has worldwide manufacturing responsibilities. The original collaboration
`agreement with Genentech was entered into in 1995. In June 2003, we amended and restated the collaboration agreement to include the
`development and commercialization of other humanized anti-CD20 antibodies targeting B-cell disorders for a broad range of indications. We
`will share responsibility with Genentech for development in the U.S. of any new products developed under the agreement, and we will also
`copromote with Genentech any such new products in the U.S.
`
` RITUXAN is approved in the U.S. for single agent use in relapsed or refractory, low grade or follicular CD20-positive B-cell NHL, which
`comprise approximately half of the B-cell NHLs diagnosed in the U.S. RITUXAN is administered as outpatient therapy by personnel trained
`in administering chemotherapies or biologics. A standard course of RITUXAN therapy consists of four intravenous infusions given on days
`one, eight, 15 and 22, unlike chemotherapy which is given typically in repeating cycles for up to four to eight months. RITUXAN is also
`approved to be administered as an 8-dose regimen, for retreatment of patients with B-cell NHL who have previously responded to RITUXAN
`and for use in patients who have bulky tumors. 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 return to normal
`levels within several months. RITUXAN’s mechanism of action utilizes the body’s own immune system as compared to conventional
`lymphoma therapies.
`
` RITUXAN in Oncology. In an effort to identify expanded applications for RITUXAN, we, in conjunction with Genentech and Roche,
`continue to support RITUXAN post-marketing studies. Ongoing and completed Phase 2 and 3 studies suggest that RITUXAN may have
`promise as a front-line therapy in combination with various chemotherapies in indolent and aggressive B-cell NHLs, as a single agent in the
`treatment of aggressive B-cell NHLs and CLL, and as maintenance therapy in indolent B-cell NHLs. These studies include:
`
`
`
`
`
`
`• A randomized Phase 3 study of the addition of RITUXAN to a chemotherapy regimen of cyclophosphamide, vincristine and
`prednisone, also known as CVP, in previously untreated, or front line patients with indolent NHL. In this investigator-run study, 321
`patients who had not received previous treatment for CD20 positive follicular or indolent NHL were randomized to receive either CVP
`alone or CVP with RITUXAN. The initial results of the study indicated that the addition of RITUXAN to CVP prolonged time to
`treatment failure, the primary endpoint of the study, to 26 months compared to seven months for patients treated with CVP alone.
`Based on this study, in January 2004, Roche filed an application with the EMEA for a change to the MabThera label to expand the
`indication to include front-line treatment of indolent non-Hodgkin’s lymphoma in combination with conventional chemotherapy.
`
`• A randomized Phase 3 study, known as E4494, of patients age 60 or older with newly diagnosed, diffuse, large B-cell, or aggressive
`NHL, comparing a chemotherapy regimen consisting of cyclophosphamide, doxorubin, vincristine and prednisone, also known as
`CHOP, alone to a regimen of
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`RITUXAN plus CHOP, also known as R-CHOP, as a front-line or induction therapy followed by RITUXAN maintenance therapy or
`observation for those patients who responded positively to either R-CHOP or CHOP alone. The study is a U.S. Intergroup study led by
`the Eastern Cooperative Oncology Group (ECOG). The primary endpoint of the induction and maintenance phases of the study was
`time to treatment failure. Due to the observed interaction between RITUXAN maintenance and induction therapy, additional analyses
`were performed to compare induction therapy with R-CHOP versus CHOP alone, removing the effects of subsequent RITUXAN
`maintenance therapy. Based on these additional analyses, the investigators concluded that patients who received R-CHOP induction
`therapy experienced prolonged time to treatment failure and overall survival compared to patients who received induction therapy with
`CHOP alone. In the maintenance phase of the study, patients treated with RITUXAN maintenance for up to an additional two years
`after completing induction therapy had a statistically significant delay in time to treatment failure compared to patients who did not
`receive RITUXAN maintenance therapy following induction. At the time of the interim analysis, this advantage appears predominantly
`confined to patients who received CHOP alone during the induction phase. There appears to be no difference in overall survival
`between the RITUXAN maintenance and observation arms, though the investigators believe additional follow up is necessary.
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`• A multi-center, randomized Phase 2 study of 114 patients with relapsed indolent NHL designed to compare the efficacy of RITUXAN
`maintenance therapy to retreatment with RITUXAN. Maintenance therapy was defined as treatment with RITUXAN every six months
`for two years with the objective of keeping lymphoma from returning or progressing. Retreatment was defined as waiting until the
`disease progressed prior to administering another course of RITUXAN. The initial results of this investigator-run study showed that
`patients who received RITUXAN maintenance therapy experienced 31 months of progression-free survival as compared to eight
`months of progression-free survival for those patients who received retreatment.
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`• A large Phase 3 randomized study of 800 patients, known as MinT, designed to evaluate RITUXAN in combination with chemotherapy
`as a front-line treatment for aggressive large, B-cell NHL in patients age 18 to 60. This study, which was conducted by an international
`cooperative group and sponsored by Roche, met its pre-specified primary efficacy endpoint early. A pre-planned analysis of the study
`data by an independent data monitoring committee demonstrated a statistically significant improvement in time to treatment failure for
`patients receiving RITUXAN and chemotherapy compared to chemotherapy alone.
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`• A Phase 3 study, known as E1496, designed to compare RITUXAN maintenance therapy versus observation in patients with
`previously untreated indolent NHL who achieved stable disease or better after induction therapy with CVP. The study, which was led by
`ECOG, met its pre-specified primary efficacy endpoint early. A pre-planned analysis of the study data by an independent ECOG Data
`Monitoring Committee demonstrated a statistically significant improvement in time to treatment failure for patients receiving RITUXAN
`maintenance therapy. At the time the study was stopped, 322 patients who responded or had stable disease following induction CVP
`chemotherapy had been randomized to receive either RITUXAN maintenance therapy or no further treatment. Data from this study are
`expected to be presented at a medical meeting in 2004.
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` We, along with Genentech and Roche, also recently initiated a multicenter global Phase 3 registrational study in patients with relapsed
`CLL comparing the use of fludarabine, cyclophosphamide and RITUXAN together, known as FCR, versus fludarabine and
`cyclophosphamide alone. This study is open at multiple sites worldwide and recently began patient recruitment. Additional clinical studies are
`ongoing in other B-cell malignancies such as lymphoproliferative disorders associated with solid organ transplant therapies, relapsed
`aggressive NHL and mantle cell NHL.
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` RITUXAN in Immunology. We are also studying the use of RITUXAN in autoimmune diseases. Along with Genentech and Roche, we
`are conducting Phase 3 studies of RITUXAN in rheumatoid arthritis, or RA. In October 2003, we, along with Genentech and Roche,
`announced positive results from an extended Phase 2 study of 161 patients with active, long-standing RA who had not responded or had
`inadequate
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`response to other therapies. The study showed that a single, short course of treatment with RITUXAN significantly improved symptoms in
`patients with severe RA for up to 48 weeks. The study was four arm, placebo controlled trial in which patients were randomized to receive
`RITUXAN alone, RITUXAN in combination with cyclophosphamide, RITUXAN in combination with methotrexate or methotrexate alone.
`Investigators followed-up with patients at 48 weeks in order to assess duration of response beyond the initial endpoint of 24 weeks. At
`48 weeks, investigators found that patients receiving the combination of RITUXAN and methotrexate had the greatest improvement in
`symptoms: 65% patients showed at least a 20% improvement, 35% showed at least a 50% improvement and 15% showed at least a 70%
`improvement.
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`ZEVALIN
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` In 2002, we began marketing and selling ZEVALIN in the U.S. ZEVALIN, as part of the ZEVALIN therapeutic regimen, is indicated for the
`treatment of patients with relapsed or refractory low-grade, follicular, or transformed B-cell non-Hodgkin’s lymphoma, including patients with
`RITUXAN relapsed or refractory non-Hodgkin’s lymphoma. In 2003, sales of ZEVALIN in the U.S. generated revenues of $19.6 million as
`compared to revenues of $13.7 million in 2002. In January 2004, the EMEA granted marketing approval of ZEVALIN in the EU for the
`treatment of adult patients with CD20+ follicular B-cell NHL who are refractory to or have relapsed following RITUXAN therapy.
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` Radiation therapy plays an important role in the management of B-cell lymphomas due to the sensitivity of B-cell tumors to radiation.
`Traditional radiation therapy consists of an external beam of radiation focused on isolated areas of the body or areas with high tumor burden.
`The ZEVALIN therapeutic regimen combines a monoclonal antibody with a radioisotope. Following intravenous infusion, the monoclonal
`antibody recognizes and attaches to the CD20 antigen. This allows ZEVALIN to specifically target B-cells, destroying the malignant NHL B-
`cells and also normal B-cells.
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` ZEVALIN therapy consists of two kits: an imaging kit for use with indium-111 and a therapeutic kit for use with yttrium-90. The ZEVALIN
`therapeutic regimen can be completed on an outpatient basis in approximately one week and includes:
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`• administration of one dose of RITUXAN to deplete peripheral blood B cells and improve ZEVALIN biodistribution;
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`• imaging with the ZEVALIN imaging kit using indium-111, followed by gamma camera images at two to 24 hours, 48 to 72 hours, and
`an optional image at 90 to 120 hours, to confirm biodistribution of ZEVALIN;
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`• if acceptable biodistribution of ZEVALIN is demonstrated, another dose of RITUXAN is administered; and
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`• infusion of the ZEVALIN therapeutic kit using yttrium-90.
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` We are working with third party investigators to expand the quality and q