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Milestone and Upfront Expenses included in
Research and Development Expense
Research and development expense for 2017
includes:
• $300.0 million upfront payment made to BMS
upon entering into our agreement to exclusively
license BIIB092;
• $60.0 million developmental milestone
payment due to the former shareholders of
iPierian, Inc. (iPierian), which became payable
upon dosing of the first patient in the Phase 2
PSP study for BIIB092;
• $28.0 million upfront payment made to
Alkermes upon entering into our agreement to
exclusively license BIIB098, representing our
share of BIIB098 development costs already
incurred in 2017;
• $50.0 million accrual based upon the expected
continuation of our agreement with Alkermes to
develop and exclusively license BIIB098; and
• $25.0 million upfront payment recognized upon
entering into a new collaboration agreement
with Ionis to identify new ASO drug candidates
for the treatment of SMA.
Research and development expense for 2016
includes:
• $75.0 million license fee paid to Ionis as we
exercised our option to develop and
commercialize SPINRAZA from Ionis;
• $50.0 million milestone payment to Eisai
related to the initiation of a Phase 3 trial for
E2609; and
• $20.0 million upfront payment recognized upon
entering into a collaboration and alliance
agreement with UPenn.
Research and development expense for 2015
includes:
• $60.0 million recognized upon entering into our
collaboration with Mitsubishi Tanabe Pharma
Corporation;
• $48.1 million recognized upon entering into our
collaboration with AGTC;
• $30.0 million in milestones recognized in
relation to our collaboration agreements with
Ionis; and
• $16.0 million paid to AbbVie related to
milestones for the development of ZINBRYTA as
a result of filing with the FDA and EMA during
2015.
These payments are classified as research and
development expense as the programs they relate to
had not achieved regulatory approval as of the
payment date.
For additional information about these
collaborations, please read Note 20, Collaborative and
Other Relationships, to our consolidated financial
statements included in this report.
Early Stage Programs
The increase in spending associated with our
early stage programs for 2017 compared to 2016
was primarily related to spending associated with the
development of BIIB092 in AD and PSP pursuant to
our license agreement with BMS, BIIB074 in
trigeminal neuralgia (TGN) and BIIB076 in AD. These
increases were partially offset by a reduction in costs
resulting from our discontinuance of development of
amiselimod in the third quarter of 2016.
The decrease in spending associated with our
early stage programs for 2016 compared to 2015
was primarily due to the advancement of our
aducanumab program in AD to a late stage program in
the third quarter of 2015, decreased costs incurred in
connection with opicinumab in MS and the
discontinuance of development of anti-TWEAK in lupus
nephritis. These decreases were partially offset by
increased costs of BIIB074 in TGN and increased
costs associated with our discontinuance of
development of amiselimod in the third quarter of
2016.
Late Stage Programs
The increase in spending associated with our
late stage programs for 2017 compared to 2016 was
primarily related the increased costs associated with
the development of aducanumab in AD and costs
incurred associated with the development of E2609, a
BACE inhibitor that was advanced to a late stage
program in the fourth quarter of 2016. These
increases were partially offset by advancement of
SPINRAZA to marketed products following its approval
in the U.S. in the fourth quarter of 2016.
The increase in spending associated with our
late stage programs for 2016 compared to 2015 was
primarily driven by costs incurred to advance our
aducanumab program in AD, the increased costs
incurred to advance our SPINRAZA program and the
advancement of E2609 to a late stage program in the
fourth quarter of 2016, partially offset by the approval
of ZINBRYTA in the third quarter of 2016.
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Marketed Products
The decrease in spending associated with our
marketed products for 2017 compared to 2016 was
primarily due to a reduction in spending resulting from
the spin-off of our hemophilia business on February 1,
2017 and a reduction in spending related to
TECFIDERA. These decreases were partially offset by
increased spending related to SPINRAZA following its
approval in the U.S. in the fourth quarter of 2016.
The decrease in spending associated with our
marketed products for 2016 compared to 2015 was
primarily due to the discontinuance of development of
TYSABRI and TECFIDERA in secondary primary MS in
the third and fourth quarters of 2015, respectively,
and decreased costs incurred in connection with our
hemophilia products. These decreases were partially
offset by the approvals of ZINBRYTA and SPINRAZA in
the third and fourth quarters of 2016, respectively.
Selling, General and Administrative
For 2017 compared to 2016, the decrease in
selling, general and administrative expenses was
primarily due to a reduction in operational spending
resulting from the spin-off of our hemophilia business
on February 1, 2017, the execution of targeted cost
reduction initiatives and a reduction in costs resulting
from the discontinuance of our TECFIDERA television
advertising campaign in the second quarter of 2016.
These decreases were offset by an increase in
SPINRAZA commercialization costs and an increase in
corporate giving.
For 2016 compared to 2015, the decrease in
selling, general and administrative expenses reflect
cost savings in connection with our corporate
restructuring, which are described below under the
heading "Restructuring, Business Transformation and
Other Cost Savings Initiatives," partially offset by an
increase in costs associated with developing
commercial capabilities for ZINBRYTA and SPINRAZA.
Amortization of Acquired 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 TECFIDERA, AVONEX and TYSABRI
products. Annually, during our long-range planning
cycle, we perform an analysis of anticipated lifetime
revenues of TECFIDERA, AVONEX and TYSABRI. This
analysis is also updated whenever events or changes
in circumstances would significantly affect the
anticipated lifetime revenues of any of these
products.
Our most recent long-range planning cycle was
completed in the third quarter of 2017. The results of
our TECFIDERA, AVONEX and TYSABRI analyses were
impacted by changes in the estimated timing of the
impact of other alternative MS formulations, including
OCREVUS, which may compete with TYSABRI,
TECFIDERA and AVONEX. The outcome of this most
recent analysis did not result in a significant net
change in our expected rate of amortization for
acquired intangible assets.
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,
2017
2018
$
423.5
2019
401.8
2020
381.6
2021
254.3
2022
242.3
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