XML 179 R13.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Intangible Assets and Goodwill | 12 Months Ended
--- | ---
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract] |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets Intangible assets, net of accumulated amortization, impairment charges and adjustments are summarized as follows:
|  |  | As of December 31, 2019 |  | As of December 31, 2018
(In millions) | Estimated Life |  | Cost |  | Accumulated Amortization |  | Net |  | Cost |  | Accumulated Amortization |  | Net
Completed technology | 4-28 years |  | $ | 7,379.3 |  |  | $ | (4,881.4 | ) |  | $ | 2,497.9 |  |  | $ | 7,187.3 |  |  | $ | (4,607.3 | ) |  | $ | 2,580.0 |
In-process research and development | Indefinite until commercialization |  | 965.5 |  |  | — |  |  | 965.5 |  |  | 476.0 |  |  | — |  |  | 476.0 |
Trademarks and trade names | Indefinite |  | 64.0 |  |  | — |  |  | 64.0 |  |  | 64.0 |  |  | — |  |  | 64.0 |
Total intangible assets |  |  | $ | 8,408.8 |  |  | $ | (4,881.4 | ) |  | $ | 3,527.4 |  |  | $ | 7,727.3 |  |  | $ | (4,607.3 | ) |  | $ | 3,120.0 |
Amortization and Impairments Amortization and impairments of acquired intangible assets totaled $489.9 million, $747.3 million and $814.7 million for the years ended December 31, 2019, 2018 and 2017, respectively. Amortization of acquired intangible assets, excluding impairment charges, totaled $274.0 million, $381.2 million and $455.3 million for the years ended December 31, 2019, 2018 and 2017, respectively. The decrease in amortization of acquired intangible assets, excluding impairment charges, over the three years was primarily due to a lower rate of amortization for acquired intangible assets, primarily due to prior year impairments. For the year ended December 31, 2019, amortization and impairments of acquired intangible assets reflects the impact of a $215.9 million impairment charge to reduce the fair value of IPR&D assets associated with BG00011 (STX-100) to zero, as discussed below. Amortization and impairments of acquired intangible assets for the year ended December 31, 2018, reflects the impact of impairment charges related to certain IPR&D assets associated with our vixotrigine program totaling $189.3 million, as discussed below. Amortization and impairments of acquired intangible assets for the years ended December 31, 2018 and 2017, reflect the impact of impairment charges of $176.8 million and $328.2 million, respectively, related to our intangible assets associated with our U.S. license to Forward Pharma's intellectual property, including Forward Pharma's intellectual property related to TECFIDERA. Completed Technology Completed technology primarily relates to our acquisition of all remaining rights to TYSABRI from Elan. The net book value of the TYSABRI asset as of December 31, 2019, was $1.8 billion. Completed technology also includes $155.0 million in milestone payments made to Alkermes Pharma Ireland Limited, a subsidiary of Alkermes plc (Alkermes), following the approval of VUMERITY in the U.S. in October 2019, technology related to our AVONEX product, which we recorded in connection with the merger of Biogen, Inc. and IDEC Pharmaceuticals Corporation in 2003, our rest of world license to Forward Pharma's intellectual property, including Forward Pharma's intellectual property related to TECFIDERA, as discussed below, and other amounts related to our other marketed products and other programs acquired through business combinations. TECFIDERA License Rights In January 2017 we entered into a settlement and license agreement among Biogen Swiss Manufacturing GmbH, Biogen International Holding Ltd., Forward Pharma and certain related parties, which was effective as of February 1, 2017. Pursuant to this agreement, we obtained U.S. and rest of world licenses to Forward Pharma's intellectual property, including Forward Pharma's intellectual property related to TECFIDERA. In exchange, we paid Forward Pharma $1.25 billion in cash, of which $795.2 million was recorded within intangible assets in the first quarter of 2017. We had an intellectual property dispute with Forward Pharma in the U.S. concerning intellectual property related to TECFIDERA. In March 2017 the U.S. intellectual property dispute was decided in our favor. Forward Pharma appealed to the U.S. Court of Appeals for the Federal Circuit. We evaluated the recoverability of the U.S. asset acquired from Forward Pharma and recorded a $328.2 million impairment charge in the first quarter of 2017 to adjust the carrying value of the acquired U.S. asset to fair value reflecting the impact of the developments in the U.S. legal dispute and continued to amortize the remaining net book value of the U.S. intangible asset in our consolidated statements of income utilizing an economic consumption model. The U.S. Court of Appeals for the Federal Circuit upheld the U.S. Patent and Trademark Office’s March 2017 ruling and in January 2019 denied Forward Pharma's petition for rehearing. We evaluated the recoverability of the U.S. asset based upon these most recent developments and recorded a $176.8 million impairment charge in the fourth quarter of 2018 to reduce the remaining net book value of the U.S. asset to zero. We have an intellectual property dispute with Forward Pharma in the European Union (E.U.) concerning intellectual property related to TECFIDERA. In March 2018 the European Patent Office (EPO) revoked Forward Pharma’s European Patent No. 2 801 355. Forward Pharma has filed an appeal to the Technical Boards of Appeal of the EPO and a hearing has been set for June 2020. Based upon our assessment of this ruling, we continue to amortize the remaining net book value of the rest of world intangible asset in our consolidated statements of income utilizing an economic consumption model. The remaining net book value of the TECFIDERA rest of world intangible asset as of December 31, 2019, was $36.1 million. For additional information on the dispute with Forward Pharma in the E.U., please read Note 20, Litigation, to these consolidated financial statements. IPR&D Related to Business Combinations IPR&D represents the fair value assigned to research and development assets that we acquired as part of a business combination and had not yet reached technological feasibility at the date of acquisition. Upon commercialization, we will determine the estimated useful life and amortize these amounts based upon an economic consumption method. The carrying value associated with our IPR&D assets as of December 31, 2019 and 2018, relates to the various IPR&D programs we acquired in connection with our acquisitions of NST, Convergence Pharmaceuticals Holdings Limited (Convergence), Stromedix Inc. (Stromedix) and Biogen International Neuroscience GmbH (BIN) in 2019, 2015, 2012 and 2010, respectively. IPR&D balances include adjustments related to foreign currency exchange rate fluctuations. An analysis of anticipated lifetime revenues and anticipated development costs is performed annually during our long-range planning cycle, which was most recently updated in the second quarter of 2019. This analysis is based upon certain assumptions that we evaluate on a periodic basis, including anticipated future product sales, the expected impact of changes in the amount of development costs and the probabilities of our programs succeeding, the introduction of new products by our competitors and changes in our commercial and pipeline product candidates. In connection with our acquisition of NST in June 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 consolidated financial statements. BG00011 During the third quarter of 2019 we discontinued the Phase 2b study of BG00011 for the potential treatment of idiopathic pulmonary fibrosis (IPF) due to safety concerns. As a result, we recognized an impairment charge of approximately $215.9 million during the third quarter of 2019 to reduce the fair value of the IPR&D intangible asset to zero. We also adjusted the value of our contingent consideration obligations related to this asset resulting in a gain of $61.2 million in the third quarter of 2019. Vixotrigine During the third quarter of 2018 we completed a Phase 2b study of vixotrigine for the potential treatment of painful lumbosacral radiculopathy (PLSR). The study did not meet its primary or secondary efficacy endpoints and we discontinued development of vixotrigine for the potential treatment of PLSR. As a result, we recognized an impairment charge of approximately $60.0 million during the third quarter of 2018 to reduce the fair value of the related IPR&D intangible asset to zero. In addition, we delayed the initiation of the Phase 3 studies of vixotrigine for the potential treatment of TGN as we awaited the outcome of ongoing interactions with the FDA regarding the design of the Phase 3 studies, a more detailed review of the data from the Phase 2b study of vixotrigine for the potential treatment of PLSR and insights from the Phase 2 study of vixotrigine for the potential treatment of small fiber neuropathy. We reassessed the fair value of the TGN program using reduced expected lifetime revenues, higher expected clinical development costs and lower cumulative probability of success. As a result of that reassessment, we recognized an impairment charge of $129.3 million during the third quarter of 2018 to reduce the fair value of the TGN IPR&D intangible asset to $41.8 million. The IPR&D impairment charges were included in amortization and impairment of acquired intangible assets and the gain resulting from the remeasurement of our contingent consideration obligation was recorded in (gain) loss on fair value remeasurement of contingent consideration in our consolidated statements of income. The fair value of the intangible assets and contingent consideration obligations were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs including estimated revenues, costs and probabilities of success. Estimated Future Amortization of Intangible Assets 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 December 31, 2019
2020 | $ | 260.0 |
2021 | 220.0 |
2022 | 225.0 |
2023 | 230.0 |
2024 | 220.0 |
Goodwill The following table provides a roll forward of the changes in our goodwill balance:
| As of December 31,
(In millions) | 2019 |  | 2018
Goodwill, beginning of year | $ | 5,706.4 |  |  | $ | 4,632.5 |
Increase to goodwill | 117.5 |  |  | 1,080.1 |
Elimination of goodwill allocated to Hillerød, Denmark manufacturing operations | (69.5 | ) |  | — |
Other | 3.4 |  |  | (6.2 | )
Goodwill, end of year | $ | 5,757.8 |  |  | $ | 5,706.4 |
The increase to goodwill during 2019 was related to our acquisition of NST. For additional information on our acquisition of NST, please read Note 2, Acquisitions, to these consolidated financial statements. The increase to goodwill during 2018 was related to $1.2 billion in contingent milestones achieved (exclusive of $119.9 million in tax benefits) and payable to the former shareholders of Fumapharm AG and holders of their rights. In the fourth quarter of 2018 we achieved the $20.0 billion cumulative sales level threshold and accrued the final contingent payment of $300.0 million related to FUMADERM and TECFIDERA (together, the Fumapharm Products), which was paid in the first quarter of 2019. The elimination of goodwill represents an allocation based upon the relative fair value of our Hillerød, Denmark manufacturing operations at the divestiture date. In connection with the divestiture of our Hillerød, Denmark manufacturing operations, our remaining goodwill was reviewed for impairment, and based upon this review, no impairments were recognized. For additional information on the divestiture of our Hillerød, Denmark manufacturing operations, please read Note 3, Divestitures, to these consolidated financial statements. As of December 31, 2019, we had no accumulated impairment losses related to goodwill. Other includes changes related to foreign currency exchange rate fluctuations.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration