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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2013
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The tables below present information about our assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques we utilized to determine such fair value:
(In millions) | As of December 31, 2013 |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 424.7 |  |  | $ | — |  |  | $ | 424.7 |  |  | $ | — |
Marketable debt securities: |  |  |  |  |  |  |
Corporate debt securities | 439.8 |  |  | — |  |  | 439.8 |  |  | — |
Government securities | 674.7 |  |  | — |  |  | 674.7 |  |  | — |
Mortgage and other asset backed securities | 131.4 |  |  | — |  |  | 131.4 |  |  | — |
Marketable equity securities | 11.2 |  |  | 11.2 |  |  | — |  |  | — |
Venture capital investments | 21.9 |  |  | — |  |  | — |  |  | 21.9 |
Derivative contracts | 3.8 |  |  | — |  |  | 3.8 |  |  | — |
Plan assets for deferred compensation | 22.7 |  |  | — |  |  | 22.7 |  |  | — |
Total | $ | 1,730.2 |  |  | $ | 11.2 |  |  | $ | 1,697.1 |  |  | $ | 21.9 |
Liabilities: |  |  |  |  |  |  |
Derivative contracts | $ | 23.5 |  |  | $ | — |  |  | $ | 23.5 |  |  | $ | — |
Contingent consideration obligations | 280.9 |  |  | — |  |  | — |  |  | 280.9 |
Total | $ | 304.4 |  |  | $ | — |  |  | $ | 23.5 |  |  | $ | 280.9 |
(In millions) | As of December 31, 2012 |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 439.4 |  |  | $ | — |  |  | $ | 439.4 |  |  | $ | — |
Marketable debt securities: |  |  |  |  |  |  |
Corporate debt securities | 1,001.0 |  |  | — |  |  | 1,001.0 |  |  | — |
Government securities | 1,657.8 |  |  | — |  |  | 1,657.8 |  |  | — |
Mortgage and other asset backed securities | 512.9 |  |  | — |  |  | 512.9 |  |  | — |
Marketable equity securities | 9.0 |  |  | 9.0 |  |  | — |  |  | — |
Venture capital investments | 20.3 |  |  | — |  |  | — |  |  | 20.3 |
Derivative contracts | 1.8 |  |  | — |  |  | 1.8 |  |  | — |
Plan assets for deferred compensation | 14.3 |  |  | — |  |  | 14.3 |  |  | — |
Total | $ | 3,656.5 |  |  | $ | 9.0 |  |  | $ | 3,627.2 |  |  | $ | 20.3 |
Liabilities: |  |  |  |  |  |  |
Derivative contracts | $ | 14.4 |  |  | $ | — |  |  | $ | 14.4 |  |  | $ | — |
Contingent consideration obligations | 293.9 |  |  | — |  |  | — |  |  | 293.9 |
Total | $ | 308.3 |  |  | $ | — |  |  | $ | 14.4 |  |  | $ | 293.9 |
The fair value of Level 2 instruments classified as cash equivalents and marketable debt securities were determined through third party pricing services. For a description of our validation procedures related to prices provided by third party pricing services, refer to Note 1, Summary of Significant Accounting Policies: Fair Value Measurements, to these consolidated financial statements. Marketable Equity Securities and Venture Capital Investments Our marketable equity securities represent investments in publicly traded equity securities. Our venture capital investments, which are all Level 3 measurements, include investments in certain venture capital funds, accounted for at fair value, that primarily invest in small privately-owned, venture-backed biotechnology companies. These venture capital investments represented approximately 0.2% of total assets of December 31, 2013 and 2012, respectively. The following table provides a roll forward of the fair value of our venture capital investments, which includes Level 3 measurements:
| As of December 31,
(In millions) | 2013 |  | 2012
Fair value, beginning of year | $ | 20.3 |  |  | $ | 23.5 |
Unrealized gains included in earnings | 10.5 |  |  | 5.4 |
Unrealized losses included in earnings | (6.3 | ) |  | (9.2 | )
Purchases | 0.7 |  |  | 0.6 |
Settlements | (3.3 | ) |  | — |
Fair value, end of year | $ | 21.9 |  |  | $ | 20.3 |
Debt Instruments The fair values of our debt instruments, which are Level 2 liabilities, are summarized as follows:
| As of December 31,
(In millions) | 2013 |  | 2012
Notes payable to Fumedica | $ | 17.5 |  |  | $ | 20.0 |
Credit Facility | — |  |  | — |
6.0% Senior Notes due March 1, 2013 | — |  |  | 453.7 |
6.875% Senior Notes due March 1, 2018 | 647.9 |  |  | 681.6 |
Total | $ | 665.4 |  |  | $ | 1,155.3 |
The fair value of our notes payable to Fumedica was estimated using market observable inputs, including current interest and foreign currency exchange rates. The fair value of our 6.875% Senior Notes was determined through market, observable, and corroborated sources. For additional information related to our debt instruments, please read Note 12, Indebtedness to these consolidated financial statements. Contingent Consideration Obligations The following table provides a roll forward of the fair values of our contingent consideration obligations which includes Level 3 measurements:
| As of December 31,
(In millions) | 2013 |  | 2012
Fair value, beginning of year | $ | 293.9 |  |  | $ | 151.0 |
Additions | — |  |  | 122.2 |
Changes in fair value | (0.5 | ) |  | 27.2 |
Payments | (12.5 | ) |  | (6.5 | )
Fair value, end of year | $ | 280.9 |  |  | $ | 293.9 |
As of December 31, 2013 and 2012, approximately $251.9 million and $271.5 million, respectively, of the fair value of our total contingent consideration obligations were reflected as components of other long-term liabilities within our consolidated balance sheets with the remaining balances reflected as a component of accrued expenses and other. In connection with our acquisition of Stromedix in March 2012, we recorded a contingent consideration obligation of $122.2 million. This valuation was based on probability weighted net cash outflow projections of $487.5 million, discounted using a rate of 4.4%, which is a measure of the credit risk associated with settling the liability. As of December 31, 2013 and 2012, the fair value of this contingent consideration obligation was $140.7 million and $135.3 million, respectively. Our most recent valuation was determined based upon probability weighted net cash outflow projections discounted using a rate of 3.8%. For 2013 compared to 2012, the net increase in the fair value of this obligation was primarily due to changes in the discount rate and in the probability and expected timing related to the achievement of certain developmental milestones. Upon completion of our purchase of the noncontrolling interest in our joint venture investments in Biogen Dompé SRL and Biogen Dompé Switzerland GmbH in September 2011, we recorded a contingent consideration obligation of $38.8 million. As of December 31, 2013 and 2012, the fair value of this contingent consideration obligation was $31.6 million and $29.8 million, respectively. Our most recent valuation was determined based upon probability weighted net cash outflow projections of $38.5 million, discounted using a rate of 1.5%, which is a measure of the credit risk associated with settling the liability. For 2013 compared to 2012, the net increase in the fair value of this obligation was primarily due to changes in the probability and expected timing related to the achievement of certain cumulative sales-based and developmental milestones and in the discount rate. For 2012 compared to 2011, the net decrease in the fair value of this obligation was primarily due to changes in the probability and expected timing related to the achievement of certain cumulative sales-based and developmental milestones and in the discount rate as well as the payment of a $4.0 million regulatory approval milestone. In connection with our acquisition of Biogen Idec International Neuroscience GmbH (BIN), formerly Panima Pharmaceuticals AG (Panima), in December 2010, we recorded a contingent consideration obligation of $81.2 million. As of December 31, 2013 and 2012, the fair value of this contingent consideration obligation was $108.6 million and $128.8 million, respectively. Our most recent valuation was determined based upon probability weighted net cash outflow projections of $375.0 million, discounted using a rate of 3.8%, which is a measure of the credit risk associated with settling the liability. For 2013 compared to 2012, the net decrease in the fair value of this obligation was primarily due to changes in the probability and expected timing related to the achievement of certain remaining developmental milestones and in the discount rate as well as payments of $12.5 million developmental milestones. For 2012 compared to 2011, the net increase in the fair value of this obligation was primarily due to changes in the discount rate and in the probability and expected timing related to the achievement of certain remaining developmental milestones, offset by a payment of a $2.5 million developmental milestone. Acquired IPR&D In connection with our acquisition of Stromedix, we allocated $219.2 million of the total purchase price to acquired IPR&D, which was capitalized as an intangible asset. The amount allocated to acquired IPR&D was based on significant inputs not observable in the market and thus represented a Level 3 fair value measurement. These assets are tested for impairment annually, and whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable, until commercialization, after which time the IPR&D is amortized over its estimated economic life. For a more detailed description of this transaction, please read Note 2, Acquisitions to these consolidated financial statements. There were no changes in valuation techniques or inputs utilized or transfers between fair value measurement levels during the years ended December 31, 2013 and 2012. For additional information related to the valuation techniques and inputs utilized in valuation of our financial assets and liabilities, please read Note 1, Summary of Significant Accounting Policies to these consolidated financial statements.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13504-108611 + Details
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