XML 68 R14.htm IDEA: XBRL DOCUMENT
v3.20.4

Fair Value Measurements | 12 Months Ended
--- | ---
Dec. 31, 2020
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The tables below present information about our assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques we utilized to determine such fair value:
|  | As of December 31, 2020
(In millions) |  | Total |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 626.9 |  |  | $ | — |  |  | $ | 626.9 |  |  | $ | — |
Marketable debt securities: |  |  |  |  |  |  |  |
Corporate debt securities |  | 1,301.5 |  |  | — |  |  | 1,301.5 |  |  | — |
Government securities |  | 627.1 |  |  | — |  |  | 627.1 |  |  | — |
Mortgage and other asset backed securities |  | 122.4 |  |  | — |  |  | 122.4 |  |  | — |
Marketable equity securities |  | 1,974.3 |  |  | 271.1 |  |  | 1,703.2 |  |  | — |
Derivative contracts |  | 20.5 |  |  | — |  |  | 20.5 |  |  | — |
Plan assets for deferred compensation |  | 28.2 |  |  | — |  |  | 28.2 |  |  | — |
Total |  | $ | 4,700.9 |  |  | $ | 271.1 |  |  | $ | 4,429.8 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |
Derivative contracts |  | $ | 217.2 |  |  | $ | — |  |  | $ | 217.2 |  |  | $ | — |
Contingent consideration obligations |  | 259.8 |  |  | — |  |  | — |  |  | 259.8 |
Total |  | $ | 477.0 |  |  | $ | — |  |  | $ | 217.2 |  |  | $ | 259.8 |
|  | As of December 31, 2019
(In millions) |  | Total |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 2,541.1 |  |  | $ | — |  |  | $ | 2,541.1 |  |  | $ | — |
Marketable debt securities: |  |  |  |  |  |  |  |
Corporate debt securities |  | 1,695.1 |  |  | — |  |  | 1,695.1 |  |  | — |
Government securities |  | 1,013.9 |  |  | — |  |  | 1,013.9 |  |  | — |
Mortgage and other asset backed securities |  | 261.3 |  |  | — |  |  | 261.3 |  |  | — |
Marketable equity securities |  | 337.5 |  |  | 7.9 |  |  | 329.6 |  |  | — |
Derivative contracts |  | 43.8 |  |  | — |  |  | 43.8 |  |  | — |
Plan assets for deferred compensation |  | 27.7 |  |  | — |  |  | 27.7 |  |  | — |
Total |  | $ | 5,920.4 |  |  | $ | 7.9 |  |  | $ | 5,912.5 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |
Derivative contracts |  | $ | 8.3 |  |  | $ | — |  |  | $ | 8.3 |  |  | $ | — |
Contingent consideration obligations |  | 346.1 |  |  | — |  |  | — |  |  | 346.1 |
Total |  | $ | 354.4 |  |  | $ | — |  |  | $ | 8.3 |  |  | $ | 346.1 |
There have been no material impairments of our assets measured and carried at fair value during the years ended December 31, 2020 and 2019. In addition, there have been no changes in valuation techniques during the years ended December 31, 2020 and 2019. The fair value of Level 2 instruments classified as cash equivalents and marketable debt securities was determined through third-party pricing services. The fair value of Level 2 instruments classified as marketable equity securities represents our investments in Sangamo Therapeutics, Inc. (Sangamo) common stock, Denali Therapeutics Inc. (Denali) common stock and Sage Therapeutics, Inc. (Sage) common stock and are valued using an option pricing valuation model as the investments are each subject to certain holding period restrictions. For additional information on our investments in Sangamo, Denali and Sage common stock, please read Note 8, Financial Instruments, to these consolidated financial statements. Our investments in marketable equity securities also include shares of Ionis Pharmaceuticals, Inc. (Ionis) common stock acquired in June 2018. Our shares of Ionis common stock were initially subject to certain holding period restrictions that have since expired. The fair value of this investment was a Level 1 measurement as of December 31, 2020. For additional information on our collaboration arrangements with Ionis, please read Note 18, Collaborative and Other Relationships, to these consolidated financial statements. For a description of our validation procedures related to prices provided by third-party pricing services and our option pricing valuation model, please read Note 1, Summary of Significant Accounting Policies - Fair Value Measurements, to these consolidated financial statements. The following table summarizes the significant unobservable inputs in the fair value measurement of our contingent consideration obligations as of December 31, 2020:
|  | As of December 31, 2020
(In millions) |  | Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average
Liabilities: |  |  |  |  |  |  |  |  |  |
Contingent consideration obligation |  | $259.8 |  | Discounted cash flow |  | Discount rate |  | 0.60% |  | 0.60%
|  |  | Expected timing of achievement of development milestones |  | 2021 to 2025 |  | —
The weighted average discount rate was calculated based on the relative fair value of our contingent consideration obligations. In addition, we apply various probabilities of technological and regulatory success, ranging from 39.9% to certain probability, to the valuation models to estimate the fair values of our contingent consideration obligations. Nonrecurring Fair Value Measurements In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis as required by accounting principles generally accepted in the U.S. (U.S. GAAP). Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. The gains or losses on assets measured at fair value on a nonrecurring basis, are summarized as follows:
|  | As of December 31, 2020
(In millions) |  | Beginning Book Value |  | Impairment |  | Ending Book Value
BIIB111 intangible asset |  | $ | 480.0 |  |  | $ | (115.0) |  |  | $ | 365.0 |
For the year ended December 31, 2020, we recorded a partial impairment charge of $115.0 million related to BIIB111. For additional information, please read Note 6, Intangible Assets and Goodwill, to these consolidated financial statements. Debt Instruments The fair values of our debt instruments, which are Level 2 liabilities, are summarized as follows:
|  | As of December 31,
(In millions) |  | 2020 |  | 2019
2.900% Senior Notes due September 15, 2020(1) |  | $ | — |  |  | $ | 1,509.6 |
3.625% Senior Notes due September 15, 2022 |  | 1,054.1 |  |  | 1,038.9 |
4.050% Senior Notes due September 15, 2025 |  | 2,003.1 |  |  | 1,897.2 |
2.250% Senior Notes due May 1, 2030 |  | 1,557.2 |  |  | — |
5.200% Senior Notes due September 15, 2045 |  | 2,365.1 |  |  | 2,107.9 |
3.150% Senior Notes due May 1, 2050 |  | 1,536.4 |  |  | — |
Total |  | $ | 8,515.9 |  |  | $ | 6,553.6 |
(1) Our 2.900% Senior Notes due September 15, 2020, were redeemed in full in May 2020 using the net proceeds from the issuance on April 30, 2020, of our senior unsecured notes for an aggregate principal amount of $3.0 billion. For additional information, please read Note 12, Indebtedness, to these consolidated financial statements. The fair values of each of our series of Senior Notes were determined through market, observable and corroborated sources. For additional information related to our Senior Notes, please read Note 12, Indebtedness, to these consolidated financial statements. Contingent Consideration Obligations In connection with our acquisitions of Convergence and Biogen International Neuroscience GmbH (BIN), we agreed to make additional payments based upon the achievement of certain milestone events. The following table provides a roll forward of the fair values of our contingent consideration obligations, which includes Level 3 measurements:
|  | As of December 31, |
(In millions) |  | 2020 |  | 2019 |
Fair value, beginning of year |  | $ | 346.1 |  |  | $ | 409.8 |  |
Changes in fair value |  | (86.3) |  |  | (63.7) |  |
Payments and other |  | — |  |  | — |  |
Fair value, end of year |  | $ | 259.8 |  |  | $ | 346.1 |  |
As of December 31, 2020 and 2019, approximately $110.3 million and $197.7 million, respectively, of the fair value of our total contingent consideration obligations was reflected as a component of other long-term liabilities in our consolidated balance sheets with the remaining balance reflected as a component of accrued expenses and other. For the year ended December 31, 2020, changes in the fair value of our contingent consideration obligations were primarily due to our discontinuing development of BIIB054 for the potential treatment of Parkinson's disease, resulting in a reduction of our contingent consideration obligations of $51.0 million as well as other changes in the probability and the expected timing of the achievement of certain remaining developmental milestones, changes in the interest rates used to revalue our contingent consideration liabilities and the passage of time. For the year ended December 31, 2019, changes in the fair value of our contingent consideration obligations were primarily due to the discontinuation of the Phase 2b study of BG00011 for the potential treatment of IPF resulting in a reduction of our contingent consideration obligations of $61.2 million as well as other changes in the probability and expected timing of achievement of certain developmental milestones, a decrease in interest rates used to revalue our contingent consideration liabilities and the passage of time. The fair values of the contingent consideration liabilities were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs. For additional information on the valuation techniques and inputs utilized in the valuation of our financial assets and liabilities, please read Note 1, Summary of Significant Accounting Policies, to these consolidated financial statements. Convergence Pharmaceuticals Holdings Limited In connection with our acquisition of Convergence in February 2015 we recorded a contingent consideration obligation of $274.5 million. As of December 31, 2020 and 2019, the fair value of this contingent consideration obligation was $259.8 million and $244.6 million, respectively. Our most recent valuation was determined based upon net cash flow projections of $400.0 million, probability weighted and discounted using a rate of 0.6%, which is a measure of the credit risk associated with settling the liability. Biogen International Neuroscience GmbH In connection with our acquisition of BIN in December 2010 we recorded a contingent consideration obligation of $81.2 million. We discontinued further development of BIIB054 for the potential treatment of Parkinson's disease based on the results of a Phase 2 study of BIIB054. Additionally, during the third and fourth quarters of 2020 we discontinued other programs related to our acquisition of BIN for which we had immaterial contingent consideration obligations. As a result, the fair value of the contingent consideration obligations related to our acquisition of BIN has been adjusted to zero, resulting in a gain of $101.5 million for the year ended December 31, 2020. Acquired IPR&D The fair values of the acquired IPR&D assets were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs including estimated revenues and probabilities of success. These assets are tested for impairment annually until commercialization, after which time the acquired IPR&D will be amortized over its estimated useful life using the economic consumption method. In connection with our acquisition of BIN, we recognized a $110.9 million acquired IPR&D intangible asset. We discontinued further development of BIIB054 for the potential treatment of Parkinson's disease and recognized an impairment charge of $75.4 million during the fourth quarter of 2020 to reduce the fair value of the IPR&D intangible asset to zero. In connection with our acquisition of Stromedix Inc., we recognized a $219.2 million acquired IPR&D intangible asset. During the third quarter of 2019 we discontinued the Phase 2b study of BG00011 for the potential treatment of IPF and recognized an impairment charge of $215.9 million to reduce the fair value of the IPR&D intangible asset to zero. In connection with our acquisition of Convergence, we recognized a $424.6 million acquired IPR&D intangible asset. During the third quarter of 2018 we recognized impairment charges related to certain IPR&D assets associated with our vixotrigine program totaling $189.3 million. For additional information on our IPR&D intangible assets, including a discussion of our most significant assumptions, please read Note 6, Intangible Assets and Goodwill, to these consolidated financial statements.

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

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration