Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible assets, net of accumulated amortization, impairment charges and adjustments, are summarized as follows:



		As of June 30, 2019							As of December 31, 2018
(In millions)	Estimated Life	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Out-licensed patents	13-23 years	$	543.3	$	(542.4	)	$	0.9	$	543.3	$	(542.3	)	$	1.0
Developed technology	15-23 years	3,005.3		(2,754.1		)	251.2		3,005.3		(2,734.8		)	270.5
In-process research and development	Indefinite until commercialization	1,175.6		—			1,175.6		476.0		—			476.0
Trademarks and tradenames	Indefinite	64.0		—			64.0		64.0		—			64.0
Acquired and in-licensed rights and patents	4-18 years	3,638.7		(1,449.1		)	2,189.6		3,638.7		(1,330.2		)	2,308.5
Total intangible assets		$	8,426.9	$	(4,745.6	)	$	3,681.3	$	7,727.3	$	(4,607.3	)	$	3,120.0

For the three and six months ended June 30, 2019, amortization and impairment of acquired intangible assets totaled $70.1 million and $138.3 million, respectively, compared to $107.4 million and $211.3 million, respectively, in the prior year comparative periods. The decrease in amortization and impairment of acquired intangible assets was primarily due to a net overall decrease in our expected rate of amortization for acquired intangible assets. This decrease was primarily due to lower amortization subsequent to the impairment in the fourth quarter of 2018 of the U.S. license to Forward Pharma A/S' (Forward Pharma) intellectual property, including Forward Pharma's intellectual property related to TECFIDERA, and higher expected lifetime revenues of TYSABRI. For the three and six months ended June 30, 2019 and 2018, we had no impairment charges.

Developed Technology

Developed technology primarily relates to our AVONEX product, which was recorded in connection with the merger of Biogen, Inc. and IDEC Pharmaceuticals Corporation in 2003. The net book value of this asset as of June 30, 2019, was $246.6 million.

IPR&D

In connection with our acquisition of NST on June 7, 2019, we acquired IPR&D programs with an estimated fair value of $700.0 million. For additional information on our acquisition of NST, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

Acquired and In-licensed Rights and Patents

Acquired and in-licensed rights and patents primarily relate to our acquisition of all remaining rights to TYSABRI from Elan Pharma International Ltd., an affiliate of Elan Corporation plc. Acquired and in-licensed rights and patents also includes our rest of world license to Forward Pharma's intellectual property, including Forward Pharma's intellectual property related to TECFIDERA, and other amounts related to our other marketed products and other programs acquired through business combinations. The net book value of the TYSABRI asset as of June 30, 2019, was $1,933.3 million and the net book value of the TECFIDERA asset as of June 30, 2019, was $55.2 million. For additional information on our TECFIDERA license rights, please read Note 7, Intangible Assets and Goodwill, to our consolidated financial statements included in our 2018 Form 10-K.

Estimated Future Amortization of Intangible Assets

Our amortization expense is based on the economic consumption and impairment of intangible assets. Our most significant intangible assets are related to our TYSABRI, AVONEX, SPINRAZA and TECFIDERA products and other programs acquired through business combinations. Annually, during our long-range planning cycle, we perform an analysis of anticipated lifetime revenues of our TYSABRI, AVONEX, SPINRAZA and TECFIDERA products. This analysis

is also updated whenever events or changes in circumstances would significantly affect the anticipated lifetime revenues of any of these products. Impairments are recorded in the period in which they are incurred.

Our most recent long-range planning cycle was completed in the second quarter of 2019. Based upon this most recent analysis, the estimated future amortization of acquired intangible assets for the next five years is expected to be as follows:



(In millions)	As of June 30, 2019
2019 (remaining six months)	$	130.0
2020	255.0
2021	215.0
2022	215.0
2023	220.0
2024	210.0

Goodwill

The following table provides a roll forward of the changes in our goodwill balance:



(In millions)	As of June 30, 2019
Goodwill, beginning of period	$	5,706.4
Increase to goodwill	112.6
Reclassification of goodwill to assets held for sale	(69.5		)
Other	(0.3		)
Goodwill, end of period	$	5,749.2

The increase in goodwill during the six months ended June 30, 2019, was related to our acquisition of NST. For additional information on our acquisition of NST, please read Note 2, Acquisitions, to these condensed consolidated financial statements.

The reclassification of goodwill to assets held for sale relates to an allocation based upon the relative fair value of the proposed divestiture of our Hillerød, Denmark manufacturing operations.

In connection with our Hillerød, Denmark manufacturing operations meeting the criteria to be classified as held for sale due to the proposed divestiture, goodwill was reviewed for impairment, and based upon this review, no impairments were recognized. As of June 30, 2019, we had no accumulated impairment losses related to goodwill.

For additional information on the proposed divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures, to these condensed consolidated financial statements.

Other includes changes related to foreign currency exchange rate fluctuations.