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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2021
Fair Value Disclosures [Abstract] |
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 September 30, 2021
(In millions) |  | Total |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 978.9 |  |  | $ | — |  |  | $ | 978.9 |  |  | $ | — |
Marketable debt securities: |  |  |  |  |  |  |  |
Corporate debt securities |  | 1,486.8 |  |  | — |  |  | 1,486.8 |  |  | — |
Government securities |  | 712.9 |  |  | — |  |  | 712.9 |  |  | — |
Mortgage and other asset backed securities |  | 181.9 |  |  | — |  |  | 181.9 |  |  | — |
Marketable equity securities |  | 1,166.2 |  |  | 215.9 |  |  | 950.3 |  |  | — |
Derivative contracts |  | 80.0 |  |  | — |  |  | 80.0 |  |  | — |
Plan assets for deferred compensation |  | 33.7 |  |  | — |  |  | 33.7 |  |  | — |
Total |  | $ | 4,640.4 |  |  | $ | 215.9 |  |  | $ | 4,424.5 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |
Derivative contracts |  | $ | 27.7 |  |  | $ | — |  |  | $ | 27.7 |  |  | $ | — |
Contingent consideration obligations |  | 210.7 |  |  | — |  |  | — |  |  | 210.7 |
Total |  | $ | 238.4 |  |  | $ | — |  |  | $ | 27.7 |  |  | $ | 210.7 |
|  | 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 |
There have been no material impairments of our assets measured and carried at fair value during the three and nine months ended September 30, 2021. In addition, there have been no changes in valuation techniques during the three and nine months ended September 30, 2021. 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 the common stock of Sangamo Therapeutics, Inc. (Sangamo), Denali Therapeutics Inc. (Denali) and Sage Therapeutics, Inc. (Sage) and are valued using an option pricing valuation model as the investments are each subject to certain holding period restrictions. The holding period restrictions for a portion of our Sangamo investment expired during the second quarter of 2021. The fair value of this portion of our Sangamo investment was a Level 1 measurement as of September 30, 2021. For additional information on our investments in Sangamo, Denali and Sage common stock, please read Note 7, Financial Instruments, to these condensed 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 our consolidated financial statements included in our 2020 Form 10-K. The following tables summarize the significant unobservable inputs in the fair value measurement of our contingent consideration obligations as of September 30, 2021 and December 31, 2020:
|  | As of September 30, 2021
(In millions) |  | Fair Value |  | Valuation Technique |  | Unobservable Input(s) |  | Range |  | Weighted Average
Liabilities: |  |  |  |  |  |  |  |  |  |
Contingent consideration obligation |  | $ | 210.7 |  |  | Discounted cash flow |  | Discount rate |  | 0.83% |  | 0.83%
| Expected timing of achievement of development milestones |  | 2022 to 2027 |  | —
|  | As of December 31, 2020
(In millions) |  | Fair Value |  | Valuation Technique |  | Unobservable Input(s) |  | 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 10.8% to certain probability, to the valuation models to estimate the fair values of our contingent consideration obligations. Nonrecurring Fair Value Measurements For the nine months ended September 30, 2021, we recorded impairment charges of $365.0 million related to BIIB111 and $220.0 million related to BIIB112. As a result, the remaining book value associated with these programs was reduced to zero. For additional information, please read Note 5, Intangible Assets and Goodwill, to these condensed consolidated financial statements. Debt Instruments The fair and carrying values of our debt instruments, which are Level 2 liabilities, are summarized as follows:
|  | As of September 30, 2021 |  | As of December 31, 2020
(In millions) |  | Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
3.625% Senior Notes due September 15, 2022 |  | $ | 1,031.2 |  |  | $ | 998.8 |  |  | $ | 1,054.1 |  |  | $ | 997.9 |
4.050% Senior Notes due September 15, 2025 |  | 1,927.7 |  |  | 1,742.5 |  |  | 2,003.1 |  |  | 1,741.2 |
2.250% Senior Notes due May 1, 2030 |  | 1,491.7 |  |  | 1,491.8 |  |  | 1,557.2 |  |  | 1,491.1 |
5.200% Senior Notes due September 15, 2045 (1) |  | 1,468.2 |  |  | 1,099.8 |  |  | 2,365.1 |  |  | 1,723.4 |
3.150% Senior Notes due May 1, 2050 |  | 1,443.1 |  |  | 1,473.0 |  |  | 1,536.4 |  |  | 1,472.6 |
3.250% Senior Notes due February 15, 2051 (1) |  | 684.6 |  |  | 465.2 |  |  | — |  |  | — |
Total |  | $ | 8,046.5 |  |  | $ | 7,271.1 |  |  | $ | 8,515.9 |  |  | $ | 7,426.2 |
(1) In February 2021 we completed a private offer to exchange (Exchange Offer) our tendered 5.200% Senior Notes due September 15, 2045 (2045 Senior Notes), whereby approximately $624.6 million of our 2045 Senior Notes were exchanged for approximately $700.7 million of a new series of 3.250% Senior Notes due February 15, 2051 (2051 Senior Notes). For additional information on our Exchange Offer, please read Note 10, Indebtedness, to these condensed 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 issued on April 30, 2020 and September 15, 2015, please read Note 12, Indebtedness, to our consolidated financial statements included in our 2020 Form 10-K. Contingent Consideration Obligations In connection with our acquisitions of Convergence and Biogen International Neuroscience GmbH, 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:
|  | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
(In millions) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Fair value, beginning of period |  | $ | 226.3 |  |  | $ | 351.6 |  |  | $ | 259.8 |  |  | $ | 346.1 |
Changes in fair value |  | (15.6) |  |  | (29.0) |  |  | (49.1) |  |  | (23.5) |
Fair value, end of period |  | $ | 210.7 |  |  | $ | 322.6 |  |  | $ | 210.7 |  |  | $ | 322.6 |
As of September 30, 2021 and December 31, 2020, approximately $210.7 million and $110.3 million, respectively, of the fair value of our total contingent consideration obligations was reflected as a component of other long-term liabilities in our condensed consolidated balance sheets with the remaining balance reflected as a component of accrued expense and other. For the three and nine months ended September 30, 2021, the decrease in the fair value of our contingent consideration obligations was primarily due to reductions in the probability of technical and regulatory success and delays in the expected timing of the achievement of certain remaining developmental milestones related to our vixotrigine programs. For the three and nine months ended September 30, 2020, the decrease in the fair value of our contingent consideration obligations was primarily due to changes in the probability of technical and regulatory success and the expected timing of the achievement of certain remaining developmental milestones as well as changes in the interest rates used to revalue our contingent consideration liabilities and the passage of time.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/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
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