<SEC-DOCUMENT>0000875045-18-000014.txt : 20180820
<SEC-HEADER>0000875045-18-000014.hdr.sgml : 20180820
<ACCEPTANCE-DATETIME>20180628101004
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000875045-18-000014
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20180628

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BIOGEN INC.
		CENTRAL INDEX KEY:			0000875045
		STANDARD INDUSTRIAL CLASSIFICATION:	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
		IRS NUMBER:				330112644
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		225 BINNEY STREET
		CITY:			CAMBRIDGE
		STATE:			MA
		ZIP:			02142
		BUSINESS PHONE:		7814642000

	MAIL ADDRESS:	
		STREET 1:		225 BINNEY STREET
		CITY:			CAMBRIDGE
		STATE:			MA
		ZIP:			02142

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BIOGEN IDEC INC.
		DATE OF NAME CHANGE:	20070427

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BIOGEN IDEC INC
		DATE OF NAME CHANGE:	20031112

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	IDEC PHARMACEUTICALS CORP / DE
		DATE OF NAME CHANGE:	19970530
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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<div><a name="s05f69d7732574fb5920d095e2c3787e4"></a></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">June&#160;28, 2018</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">By EDGAR Submission</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Division of Corporation Finance</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">United States Securities and Exchange Commission</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">100 F Street, N.E.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Washington, D.C. 20549</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Attention:&#160;&#160;&#160;&#160;Mark Brunhofer</font></div><div style="line-height:120%;text-align:left;text-indent:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Senior Accounting Examiner</font></div><div style="line-height:120%;text-align:left;text-indent:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Division of Corporation Finance </font></div><div style="line-height:120%;text-align:left;text-indent:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Office of Healthcare &amp; Insurance </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Re: &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Biogen Inc. </font></div><div style="line-height:120%;text-align:left;text-indent:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Form 10-K for the Fiscal Year Ended December 31, 2017 </font></div><div style="line-height:120%;text-align:left;text-indent:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Filed February 1, 2018</font></div><div style="line-height:120%;text-align:left;text-indent:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Form 10-Q for the Quarterly Period Ended March 31, 2018</font></div><div style="line-height:120%;text-align:left;text-indent:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">Filed April 24, 2018 </font></div><div style="line-height:120%;text-align:left;text-indent:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">File No. 000-19311 </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Dear Mr. Brunhofer,</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">On behalf of Biogen Inc. (the "Company"), I am writing in response to the comment letter dated June 18, 2018, submitted to the Company from the staff (the "Staff") of the Division of Corporation Finance of the United States Securities and Exchange Commission (the "Commission") regarding the Company&#8217;s Annual Report on Form 10-K for the fiscal year ended December&#160;31, 2017, which was filed with the Commission on February 1, 2018 ("2017 Form 10-K"), and the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018, which was filed with the Commission on April 24, 2018 ("Q1 2018 Form 10-Q"). For your convenience, the Staff&#8217;s initial comments are included with our responses below.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Form 10-Q for the Quarterly Period Ended March 31, 2018</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Notes to Condensed Consolidated Financial Statements</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Note 1: Summary of Significant Accounting Policies</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">New Accounting Pronouncements</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Revenue Recognition, page 10</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Comment:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:24px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">1.</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">In your Product Revenue disclosure on page 11, you indicate that you estimate variable consideration using the most likely method. Please tell us why it is appropriate to apply this method rather than the expected value method. See ASC 606-10-32-8. In addition, tell us where you have made the disclosure specified in ASC 606-10-50-12b or your consideration for providing this disclosure.</font></div></td></tr></table><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Response to the First Comment:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Use of the &#8220;Most Likely Method&#8221;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Our process for estimating variable consideration takes into consideration our historical experience, our understanding of current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Upon further analysis, including a review of industry practices and disclosures, we have gained additional perspective with respect to our interpretation of the definitions for the methods specified in ASC 606-10-32-8 and now believe our estimation process conforms to the expected value method. Accordingly, we plan to revise our disclosures on a prospective basis beginning with our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 ("Q2 2018 Form 10-Q") in the subsection entitled </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8220;Reserves for Discounts and Allowances&#8221; </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">within Note 1,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Summary of Significant Accounting Policies, </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">to indicate that our estimation methodology reflects the expected value method.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">1</font></div></div><hr style="page-break-after:always"><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Disclosures Specified in ASC 606-10-50-12b </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We respectfully direct you to our disclosures included on page 12 in the subsection entitled </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8220;Accounts Receivable&#8221;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;within Note 1,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Summary of Significant Accounting Policies, </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">in our Q1 2018 Form 10-Q, which address the disclosures specified in ASC 606-10-50-12b with respect to whether the contract has a significant financing component.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We also respectfully direct you to our disclosures on page 11 in the subsection entitled </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8220;Reserves for Discounts and Allowances&#8221; </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">within Note 1,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Summary of Significant Accounting Policies, </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">in our Q1 2018 Form 10-Q, which address the disclosures specified in ASC 606-10-50-12b with respect to whether any consideration is variable and whether such consideration is constrained.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">In addition, we plan to revise our disclosures on a prospective basis beginning with our Q2 2018 Form 10-Q in the subsection entitled </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8220;Accounts Receivable&#8221;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;within Note 1,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Summary of Significant Accounting Policies,</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;to include the disclosure specified in ASC 606-10-50-12b regarding the significant payment terms related to our material revenue streams.  </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">To facilitate your review, attached as </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Exhibit A</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;to this letter is a copy of such modified disclosures based on our Q1 2018 Form 10-Q.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Comment:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:24px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">2.</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">In your Revenues from Anti-CD20 Therapeutic Programs disclosure on page 11, you indicate that you do not have any future performance obligations under your license or collaboration agreement. Please reconcile this statement with the following disclosures that imply that you may be obligated to perform some tasks:</font></div></td></tr></table><div style="line-height:120%;padding-left:48px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:72px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">On page 12 you indicate that you are reimbursed for your selling and development expenses in the U.S. for RITUXAN;</font></div></td></tr></table><div style="line-height:120%;padding-left:48px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:72px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">In the last paragraph on page F-11 of the 2017 Form 10-K you indicate that your co-promotion profits on RITUXAN and GAZYVA include reimbursement for joint development expenses incurred; and</font></div></td></tr></table><div style="line-height:120%;padding-left:48px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:72px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">In the second paragraph on page F-57 of the 2017 Form 10-K you indicate that you recognize your share of the development and commercialization expenses of GAZYVA as a reduction of your pre-tax profits.</font></div></td></tr></table><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Response to the Second Comment:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">In relation to our Anti-CD20 Therapeutic Programs, we confirm to the Staff that we have no future performance obligations under our license and collaboration agreement with Genentech Inc. ("Genentech"). In 2010 Genentech, our licensee and collaborator, became responsible for all development and commercialization activities. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:12pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Please note, when we refer to our &#8220;share&#8221; of development and commercialization expenses for RITUXAN&#174;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:12pt;"><sup style="vertical-align:top;line-height:120%;font-size:pt"> </sup></font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">and GAZYVA&#174;, we are referring to our share of collaboration expenses incurred by Genentech, which decreases the profit share earned by us. We plan to clarify our disclosures on a prospective basis beginning with our Q2 2018 Form 10-Q. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">To facilitate your review, attached as </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Exhibit B</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;to this letter is a copy of such modified disclosures based on our Q1 2018 Form 10-Q.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Comment:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:24px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">3.</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Please clarify for us whether you are applying the ASC 606 royalty recognition constraint to your co-promotion profits and royalties associated with your Genentech collaboration. If so, clarify for us the consideration you gave in reaching your conclusion to apply the constraint to the following:</font></div></td></tr></table><div style="line-height:120%;padding-left:48px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:72px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">You assigned, rather than licensed your Canadian collaboration rights. See page F-57 of your 2017 Form 10-K, ASC 606-10-55-65A and paragraph BC 78b of ASU 2016-10.</font></div></td></tr></table><div style="line-height:120%;padding-left:48px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">2</font></div></div><hr style="page-break-after:always"><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:72px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Your obligation to provide development services and/or other goods or services.</font></div></td></tr></table><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Response to the Third Comment:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We account for our relationship with Genentech in accordance with ASC 808, </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Collaborative Arrangements</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">, and other applicable guidance, as we share significant risks and rewards and there are joint operating activities that involve active participation from both parties. Our revenues from our collaboration arrangement with Genentech are presented separately from </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">"Product revenues, net"</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;as </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8220;Revenues from anti-CD20 therapeutic programs&#8221;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;within our consolidated statements of income and refer collectively to the commercial products RITUXAN, GAZYVA and OCREVUS&#174;, which are sold by Genentech.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Pursuant to the guidance specified in ASC 808-10-45-3, we analogize aspects of our relationship with Genentech to certain guidance in ASC 606, </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">, including the sales- and usage-based royalty exception (i.e., royalty recognition constraint) because the predominant item to which the profit share and royalty income amounts relate is the license of intellectual property to Genentech. This includes our Canadian collaboration rights to RITUXAN. Subsequent to the license, we consented to the license being assigned to an affiliated entity of Genentech within the consolidated Roche/Genentech group. Following this assignment, the intellectual property is still licensed and we continue to own the rights to the intellectual property. We plan to clarify our disclosures on a prospective basis beginning with our Q2 2018 Form 10-Q with respect to the nature of the Canadian relationship, which is the license of intellectual property.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">In addition, as noted in our response to the Second Comment above, we plan to revise our disclosures on a prospective basis beginning with our Q2 2018 Form 10-Q since we are not providing any on-going goods or services and have no future performance obligations under the Genentech collaboration arrangement. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">To facilitate your review, attached as </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Exhibit C</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;to this letter is a copy of such modified disclosures based on our 2017 Form 10-K.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Comment:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:24px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">4.</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Please tell us where you have made the disclosure of your accounting policy for classifying payments between participants to a collaborative arrangement or your consideration for providing this disclosure. In your response, tell us how you handle both net profits and expense reimbursements (either paid or received) and how you distinguish between the two. Help us understand how your policies are the same as or differ from the example beginning at ASC 808-10-55-3 and the extent to which they are consistent with your ongoing major or central operations. In this regard, we note from disclosure:</font></div></td></tr></table><div style="line-height:120%;padding-left:48px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:72px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">In the last paragraph on page F-58 of your 2017 Form 10-K that you include your share of development expenses as a reduction to revenue after an anti-CD20 product is approved;</font></div></td></tr></table><div style="line-height:120%;padding-left:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:72px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">At the top of page 12 of your March 31, 2018 Form 10-Q that the reimbursement of development expenses in the U.S. for RITUXAN is included in revenues; and</font></div></td></tr></table><div style="line-height:120%;padding-left:96px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:72px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">In the second paragraph on page F-59 of your 2017 Form 10-K that reimbursement of research and development expenses from AbbVie are netted against research and development expense in your consolidated statements of income.</font></div></td></tr></table><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Response to the Fourth Comment:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Disclosures regarding our Accounting Policy for Classifying Payments for Collaborative and Other Relationships</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We respectfully direct you to our disclosures included on page 12 in the subsection entitled </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8220;Collaborative and Other Relationships&#8221;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;within Note 1,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Summary of Significant Accounting Policies, </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">in our Q1 2018 Form 10-Q, which address our policy for classifying payments between participants to a collaborative arrangement.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We further respectfully direct you to our disclosures included on page F-19 in the subsection entitled </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">&#8220;Research and Development Expenses&#8221;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;within Note 1,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Summary of Significant Accounting Policies, </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">in our 2017 Form 10-K with respect to these payments.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">3</font></div></div><hr style="page-break-after:always"><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We plan to modify our disclosures on a prospective basis beginning with our Q2 2018 Form 10-Q to provide additional clarity with respect to our accounting policy regarding our collaborative and other relationships.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">To facilitate your review, attached as </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Exhibit D</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;to this letter is a copy of such modified disclosures based on our Q1 2018 Form 10-Q and our 2017 Form 10-K.   </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Consideration with Respect to our Collaborations with Genentech and AbbVie</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We report costs incurred and revenues generated from transactions with third parties that do not participate in the collaborative arrangement in our consolidated statements of income pursuant to the guidance on principal versus agent considerations in ASC 606-10-55-36 through 55-40.  </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">In accordance with ASC 808-10-45-1 and ASC 606-10-55-37, a participant in a collaborative arrangement that is deemed to be the principal for a given transaction records that transaction on a gross basis in its financial statements. In accordance with ASC 808-10-45-1 and ASC 606-10-55-38, a participant in a collaborative arrangement that is deemed not to be the principal for a given transaction records that transaction on a net basis in its financial statements.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;text-decoration:underline;">Genentech</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">For our approved anti-CD20 products, as discussed in our response to the Second Comment above, Genentech is the principal performing further development work associated with a commercial product. We have no future performance obligations under our license and collaboration agreement with Genentech and are not performing any development work. The development costs incurred by Genentech, in accordance with the terms of the collaboration agreement, reduce the overall profit of the collaboration, which is then allocated between the collaborators (Genentech and us). We record the net profit we receive from Genentech as </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">"Revenues from anti-CD20 therapeutic programs"</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;within our consolidated statements of income. Consistent with the guidance beginning at ASC 808-10-55-3, as included within Example 1 and Example 3 to ASC 808 </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">"Collaborative Arrangements"</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">, we have concluded that the net profit received from Genentech is analogous to a royalty and should therefore be classified as revenues, similar to royalties.&#160; </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;text-decoration:underline;">AbbVie</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">For our relationship with AbbVie, which relates to the development and commercialization of ZINBRYTA&#174; (which was withdrawn from the market in all jurisdictions in March 2018), we performed development services and recorded development expenses within </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">"Research and development expense"</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;in our consolidated statements of income. Any reimbursement of development expenses from AbbVie were recorded as a reduction to research and development expense. Research and development services are not part of our ordinary activities. Therefore, AbbVie is not considered a customer with respect to development services. </font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">**************</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">The Company acknowledges that the Company and its management are responsible for the accuracy and adequacy of its disclosures, notwithstanding any review, comments, action or absence of action by the Staff.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">If you have any questions or comments regarding the foregoing, please contact the undersigned at 617-914-1986.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:52.734375%;border-collapse:collapse;text-align:left;"><tr><td colspan="1"></td></tr><tr><td style="width:100%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Sincerely,</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">/s/ Jeffrey D. Capello</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Jeffrey D. Capello</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Executive Vice President and Chief Financial Officer</font></div></td></tr></table></div></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">4</font></div></div><hr style="page-break-after:always"><div><a name="s1e1bc6121f294df6acc3d4fec3985c7f"></a></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">EXHIBIT A</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Underlined material is planned additional disclosure and struck out material is planned deleted disclosure to be included in our Q2 2018 Form 10-Q (with corresponding revisions to be included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018 ("Q3 2018 Form 10-Q") and the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 ("2018 Form 10-K")):</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;padding-left:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Reserves for Discounts and Allowances</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices.</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">are calculated based upon a consistent application of our methodology utilizing the expected value method.</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">typically utilize the most likely method and</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">These estimates</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">In addition to discounts, rebates and product returns, we also maintain certain customer service contracts with distributors and other customers in the distribution channel that provide us with inventory management, data and distribution services, which are generally reflected as a reduction of revenues. To the extent we can demonstrate a separable benefit and fair value for these services we classify these payments in selling, general and administrative expenses.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">For additional information on our revenues, please read Note 4,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Revenues,</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;to these condensed consolidated financial statements.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;padding-left:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Accounts Receivable</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">The majority of our accounts receivable arise from product sales and primarily represent amounts due from our wholesale and other third-party distributors, public hospitals, pharmacies and other government entities </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">and have standard payment terms that generally require payment within 30 to 90 days</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">.</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We do not adjust our receivables for the effects of a significant financing component at contract inception if we expect to collect the receivables in one year or less from the time of sale.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">In countries where we have experienced a pattern of payments extending beyond our contractual payment term and we expect to collect receivables greater than one year from the time of sale, we have assessed whether the customer has a significant financing component and discounted our receivables and reduced related revenues over the period of time that we estimate those amounts will be paid using the country&#8217;s market-based borrowing rate for such period. The related receivables are classified at the time of sale as non-current assets. We accrete interest income on these receivables, which is recognized as a component of other income (expense), net in our condensed consolidated statements of income.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We provide reserves against trade receivables for estimated losses that may result from a customer&#8217;s inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve.&#160;</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">The adoption of the new revenue standards did not change our historical accounting methods for our accounts receivable.</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">5</font></div></div><hr style="page-break-after:always"><div><a name="s40d2c2ad307c46a7ace289f51627f6c8"></a></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">EXHIBIT B</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Underlined material is planned additional disclosure and struck out material is planned deleted disclosure to be included in our Q2 2018 Form 10-Q (with corresponding revisions to be included in our Q3 2018 Form 10-Q and our 2018 Form 10-K):</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Revenues from Anti-CD20 Therapeutic Programs</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Our collaboration with Genentech is within the scope of Accounting Standards Codification (ASC) 808,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Collaborative Agreements,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">which provides guidance on the presentation and disclosure of collaborative arrangements. Our share of the pre-tax co-promotion profits on RITUXAN and GAZYVA and royalty revenues on the sale of OCREVUS resulted from an exchange of a license. As we do not have any future performance obligations under the license or collaboration agreement, revenues are recognized as the underlying sales occur.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Revenues from anti-CD20 therapeutic programs consist of:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:30px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:6px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">(i)</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">our share of pre-tax profits and losses in the U.S. for RITUXAN and GAZYVA;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">and</font></div></td></tr></table><div style="line-height:120%;padding-left:30px;text-indent:-24px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:30px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:6px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">(ii)</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">reimbursement of our selling and development expenses in the U.S. for RITUXAN; and</font></div></td></tr></table><div style="line-height:120%;padding-left:30px;text-indent:-24px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:30px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:10pt;padding-left:6px;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">(iii)</font></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">(ii)</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">other revenues from anti-CD20 therapeutic programs, which primarily consist of our share of pre-tax co-promotion profits on RITUXAN in Canada and royalty revenues on sales of OCREVUS.</font></div></td></tr></table><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">For additional information on our collaboration with Genentech, please read Note 20,&#160;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Collaborative and Other Relationships,</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#160;to our consolidated financial statements included in our 2017 Form 10-K.</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">6</font></div></div><hr style="page-break-after:always"><div><a name="s0760ddd395f04b298dc4b27b48cab65d"></a></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">EXHIBIT C</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Underlined material is planned additional disclosure and struck out material is planned deleted disclosure to be included in our Q2 2018 Form 10-Q (with corresponding revisions to be included in our Q3 2018 Form 10-Q and our 2018 Form 10-K):</font></div><div style="line-height:120%;padding-top:12px;text-align:left;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#2573ba;font-style:italic;font-weight:bold;">Genentech (Roche Group)</font></div><div style="line-height:120%;padding-top:6px;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We have certain business and financial rights with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, CLL and other conditions, GAZYVA for the treatment of CLL and follicular lymphoma, OCREVUS for the treatment of primary progressive MS (PPMS) and relapsing MS (RMS) and other potential anti-CD20 therapies under a collaboration agreement with Genentech, a wholly-owned member of the Roche Group. </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">The Roche Group and its sub-licensees maintain sole responsibility for the development, manufacturing and commercialization of GAZYVA in the U.S.</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font></div><div style="line-height:120%;padding-top:12px;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#538235;font-style:italic;">RITUXAN</font></div><div style="line-height:120%;padding-top:6px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Genentech</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">and its affiliates are</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">is</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">responsible for the worldwide </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">manufacturing</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">manufacture</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;of RITUXAN</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">, as well as all development and commercialization activities</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">Development and commercialization rights and responsibilities under this collaboration are divided</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">as follows:</font></div><div style="line-height:120%;padding-top:12px;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">U.S.</font></div><div style="line-height:120%;padding-top:6px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">We have co-exclusively licensed our rights to develop, commercialize and market RITUXAN in the U.S.</font></div><div style="line-height:120%;padding-top:6px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">We share with Genentech co-exclusive rights to develop, commercialize and market RITUXAN in the U.S.</font></div><div style="line-height:120%;padding-top:12px;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Canada</font></div><div style="line-height:120%;padding-top:6px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">We have co-exclusively licensed our rights to develop, commercialize and market RITUXAN in Canada.</font></div><div style="line-height:120%;padding-top:6px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">We and Genentech have assigned our rights under our collaboration agreement with respect to Canada to the Roche Group.</font></div><div style="line-height:120%;padding-top:12px;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#538235;font-style:italic;">GAZYVA</font></div><div style="line-height:120%;padding-top:6px;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">The Roche Group and its sub-licensees maintain sole responsibility for the development, manufacture and commercialization of GAZYVA in the U.S.</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">We recognize our share of the development and commercialization expenses of GAZYVA as a reduction of our share of pre-tax profits in revenues from anti-CD20 therapeutic programs. </font></div><div style="line-height:120%;padding-top:12px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Commercialization of GAZYVA impacts our percentage of the co-promotion profits for RITUXAN, as summarized in the table below.</font></div><div style="line-height:120%;padding-top:12px;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#538235;font-style:italic;">OCREVUS</font></div><div style="line-height:120%;padding-top:6px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">In March 2017 the U.S. Food and Drug Administration (FDA) approved OCREVUS, a humanized anti-CD20 monoclonal antibody, for the treatment of RMS and PPMS. Under the terms of our agreement with Genentech, we will receive a tiered royalty on U.S. net sales from 13.5% and increasing up to 24% if annual net sales exceed $900.0 million. There will be a 50% reduction to these royalties if a biosimilar to OCREVUS is approved in the U.S.</font></div><div style="line-height:120%;padding-top:12px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">In addition, we receive a 3% royalty on net sales of OCREVUS outside the U.S., with the royalty period lasting 11 years from the first commercial sale of OCREVUS on a country-by-country basis. OCREVUS was approved for treatment of RMS and PPMS in the E.U. and certain other countries. </font></div><div style="line-height:120%;padding-top:12px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">The commercialization of OCREVUS does not impact the percentage of the co-promotion profits we receive for RITUXAN or GAZYVA. Genentech is solely responsible for development and commercialization of OCREVUS and funding future costs. OCREVUS royalty revenues were based on our estimates from third party and market research data of OCREVUS sales occurring during the corresponding period. Differences between actual and estimated royalty revenues will be adjusted for in the period in which they become known, which is expected to be the following quarter. </font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">7</font></div></div><hr style="page-break-after:always"><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;padding-top:12px;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#538235;font-style:italic;">Revenues from Anti-CD20 Therapeutic Programs</font></div><div style="line-height:120%;padding-top:6px;text-align:left;text-indent:32px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Revenues from anti-CD20 therapeutic programs are summarized as follows:</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:99.609375%;border-collapse:collapse;text-align:left;"><tr><td colspan="16"></td></tr><tr><td style="width:45%;"></td><td style="width:1%;"></td><td style="width:11%;"></td><td style="width:1%;"></td><td style="width:1%;"></td><td style="width:1%;"></td><td style="width:11%;"></td><td style="width:1%;"></td><td style="width:1%;"></td><td style="width:1%;"></td><td style="width:11%;"></td><td style="width:1%;"></td><td style="width:1%;"></td><td style="width:1%;"></td><td style="width:11%;"></td><td style="width:1%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="7" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:8pt;font-weight:bold;">For the Three Months <br>Ended June 30,</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="7" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:8pt;font-weight:bold;">For the Six Months <br>Ended June 30,</font></div></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:8pt;font-weight:bold;">(In millions)</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#dddddd;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;"><div style="text-align:center;font-size:8pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:8pt;color:#257acb;font-weight:bold;">2018</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:8pt;font-weight:bold;">2017</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;background-color:#dddddd;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;"><div style="text-align:center;font-size:8pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:8pt;color:#257acb;font-weight:bold;">2018</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:8pt;font-weight:bold;">2017</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;"><div style="font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Biogen's share of pre-tax profits in the U.S. for RITUXAN and GAZYVA</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">, including the reimbursement of selling and development expenses</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#dddddd;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">$</font></div></td><td style="vertical-align:bottom;background-color:#dddddd;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">&#8212;</font></div></td><td style="vertical-align:bottom;background-color:#dddddd;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">347.5</font></div></td><td style="vertical-align:bottom;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#dddddd;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">$</font></div></td><td style="vertical-align:bottom;background-color:#dddddd;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">&#8212;</font></div></td><td style="vertical-align:bottom;background-color:#dddddd;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">671.0</font></div></td><td style="vertical-align:bottom;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Other revenues from anti-CD20 therapeutic programs</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#dddddd;padding-left:2px;padding-top:2px;padding-bottom:2px;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">&#8212;</font></div></td><td style="vertical-align:bottom;background-color:#dddddd;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">49.6</font></div></td><td style="vertical-align:bottom;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;background-color:#dddddd;padding-left:2px;padding-top:2px;padding-bottom:2px;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">&#8212;</font></div></td><td style="vertical-align:bottom;background-color:#dddddd;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">66.7</font></div></td><td style="vertical-align:bottom;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td></tr><tr><td style="vertical-align:top;padding-left:28px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Total revenues from anti-CD20 therapeutic programs</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#dddddd;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">$</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;background-color:#dddddd;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">&#8212;</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;background-color:#dddddd;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">397.1</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;background-color:#dddddd;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">$</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;background-color:#dddddd;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#257acb;">&#8212;</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;background-color:#dddddd;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">$</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;padding-top:2px;padding-bottom:2px;border-top:1px solid #000000;"><div style="text-align:right;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">737.7</font></div></td><td style="vertical-align:bottom;border-bottom:3px double #000000;border-top:1px solid #000000;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:12px;text-align:left;text-indent:29px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Biogen&#8217;s share of pre-tax profits in the U.S. for RITUXAN and GAZYVA for the </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">three and six</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;months ended June 30, 2017, excluded certain expenses charged to the collaboration by Genentech that we believed remained the responsibility of Genentech and were not obligated to pay under the terms of the collaboration agreement. Accordingly, we did not recognize the effect of those expenses in the determination of our share of pre-tax collaboration profits and Genentech has withheld approximately $120 million from amounts due to us in relation to collaboration activity for the first quarter of 2017, representing Genentech&#8217;s estimate of our share of these expenses. We remain in discussions with Genentech about a resolution relating to these amounts.</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">8</font></div></div><hr style="page-break-after:always"><div><a name="s26ad23b964b54a299f7c983917956595"></a></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-weight:bold;">EXHIBIT D</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Underlined material is planned additional disclosure and struck out material is planned deleted disclosure to be included in our Q2 2018 Form 10-Q (with corresponding revisions to be included in our Q3 2018 Form 10-Q and our 2018 Form 10-K):</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Collaborative and Other Relationships</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">We have a number of significant collaborative and other third-party relationships for revenues, and for the development, regulatory approval, commercialization and marketing of certain of our products and product candidates.</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:line-through;">Our development and commercialization arrangements with AbbVie and Samsung Bioepis also represent collaborative arrangements as each party is an active participant and exposed to significant risks and rewards of the arrangements. These arrangements resulted from an exchange of a license and utilize the sales and usage based royalty exception. Therefore, revenues are recognized as the underlying sales occur.</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;&#32;</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Where we are the principal on sales transactions with third parties, we recognize revenues, cost of sales and operating expenses on a gross basis in their respective lines in our condensed consolidated statements of income. Where we are not the principal on sales transactions with third parties, we record our share of the revenues, cost of sales and operating expenses on a net basis in collaborative and other relationships included in other revenues in our condensed consolidated statements of income.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;text-decoration:underline;">Our development and commercialization arrangements with AbbVie, Genentech and Samsung Bioepis represent collaborative arrangements as each party is an active participant in one or more joint operating activities and is exposed to significant risks and rewards of these arrangements. These arrangements resulted from an exchange of a license and utilize the sales and usage based royalty exception. Therefore, revenues relating to royalties or profit sharing amounts received are recognized as the underlying sales occur.</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;</font></div><div style="line-height:120%;padding-top:12px;text-align:left;text-indent:18px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;color:#2573ba;font-style:italic;font-weight:bold;">Research and Development Expenses</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">Research and development expenses consist of upfront fees and milestones paid to collaborators and expenses incurred in performing research and development activities, which include compensation and benefits, facilities and overhead expenses, clinical trial expenses and fees paid to contract research organizations (CROs), clinical supply and manufacturing expenses, write-offs of inventory that was previously capitalized in anticipation of product launch and determined to no longer be realizable and other outside expenses. Research and development expenses are expensed as incurred. Payments we make for research and development services prior to the services being rendered are recorded as prepaid assets in our consolidated balance sheets and are expensed as the services are provided. We also accrue the costs of ongoing clinical trials associated with programs that have been terminated or discontinued for which there is no future economic benefit at the time the decision is made to terminate or discontinue the program.</font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;"><br></font></div><div style="line-height:120%;text-indent:30px;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">From time to time, we enter into development agreements in which we share expenses with a collaborative partner. We record payments received from our collaborative partners for their share of the development costs as a reduction of research and development expense, except as discussed in Note 20, </font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;font-style:italic;">Collaborative and Other Relationships,</font><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">&#32;to these consolidated financial statements. Because an initial indication has been approved for both RITUXAN and GAZYVA, expenses incurred by Genentech in the ongoing development of RITUXAN and GAZYVA are not recorded as research and development expense, but rather reduce our share of profits recorded as a component of revenues from anti-CD20 therapeutic programs.</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:Franklin Gothic Book,sans-serif;font-size:10pt;">9</font></div></div>	</body>
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