United states securities and exchange commission

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85
We have acquired, and expect to continue to 
acquire, intangible assets through the acquisition of 
biotechnology companies or through the consolidation 
of variable interest entities. These intangible assets 
primarily consist of technology associated with human 
therapeutic products and IPR&D product candidates. 
When significant identifiable intangible assets are 
acquired, we generally engage an independent third-
party valuation firm to assist in determining the fair 
values of these assets as of the acquisition date. 
Management will determine the fair value of less 
significant identifiable intangible assets acquired. 
Discounted cash flow models are typically used in 
these valuations, and these models require the use of 
significant estimates and assumptions including but 
not limited to:
•  estimating the timing of and expected costs to 
complete the in-process projects;
•  projecting regulatory approvals;
•  estimating future cash flows from product sales 
resulting from completed products and in 
process projects; and
•  developing appropriate discount rates and 
probability rates by project.
We believe the fair values assigned to the 
intangible assets acquired are based upon 
reasonable estimates and assumptions given 
available facts and circumstances as of the 
acquisition dates.
If these projects are not successfully developed, 
the sales and profitability of the company may be 
adversely affected in future periods. Additionally, the 
value of the acquired intangible assets may become 
impaired. We believe that the foregoing assumptions 
used in the IPR&D analysis were reasonable. No 
assurance can be given that the underlying 
assumptions used to estimate expected project sales, 
development costs or profitability, or the events 
associated with such projects, will transpire as 
estimated.
Certain IPR&D programs have a fair value that is 
not significantly in excess of carrying value, including 
our program for the treatment of TGN. Such programs 
could become impaired if assumptions used in 
determining the fair value change.
Impairment and Amortization of Long-lived Assets 
and Accounting for Goodwill
Long-lived Assets Other than Goodwill
Long-lived assets to be held and used include 
property, plant and equipment as well as intangible 
assets, including IPR&D and trademarks. Property, 
plant and equipment are reviewed for impairment 
whenever events or changes in circumstances 
indicate that the carrying amount of the assets may 
not be recoverable. We review our intangible assets 
with indefinite lives for impairment annually, as of 
October 31, and whenever events or changes in 
circumstances indicate that the carrying value of an 
asset may not be recoverable.
When performing our impairment assessment, 
we calculate the fair value using the same 
methodology as described above under "Acquired 
Intangible Assets, including In-process Research and 
Development (IPR&D)". If the carrying value of our 
acquired IPR&D exceeds its fair value, then the 
intangible asset is written-down to its fair value. 
Certain IPR&D programs have a fair value that is not 
significantly in excess of carrying value, including 
treatments for forms of neuropathic pain, such as 
TGN. Such programs could become impaired if 
assumptions used in determining the fair value 
change.
Our most significant intangible assets are our 
acquired and in-licensed rights and patents and 
developed technology. Acquired and in-licensed rights 
and patents primarily relate to obtaining the fair value 
of the U.S. and rest of world licenses to Forward 
Pharma's intellectual property, including Forward 
Pharma's intellectual property related to TECFIDERA, 
and our acquisition of all remaining rights to TYSABRI 
from Elan. 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. We amortize 
the intangible assets related to TECFIDERA, TYSABRI 
and AVONEX using the economic consumption method 
based on revenues generated from the products 
underlying the related intangible assets. An analysis 
of the anticipated lifetime revenues of TECFIDERA, 
TYSABRI and AVONEX is performed annually during 
our long-range planning cycle, which is generally 
updated in the third quarter of each year, and 
whenever events or changes in circumstances would 
significantly affect the anticipated lifetime revenues of 
TECFIDERA, TYSABRI or AVONEX.
For additional information on the impairment 
charges related to our long-lived assets during 2017 
and 2016, please read Note 7, Intangible Assets and 
Goodwill, to our consolidated financial statements 
included in this report. Impairment charges related to 
our long-lived assets during 2015 were insignificant. 

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Table of Contents
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Goodwill
Goodwill relates largely to amounts that arose in 
connection with the merger of Biogen, Inc. and IDEC 
Pharmaceuticals Corporation in 2003 and amounts 
that are being paid in connection with the acquisition 
of Fumapharm AG. Our goodwill balances represent 
the difference between the purchase price and the fair 
value of the identifiable tangible and intangible net 
assets when accounted for using the purchase 
method of accounting.
We assess our goodwill balance within our 
single reporting unit annually, as of October 31, and 
whenever events or changes in circumstances 
indicate the carrying value of goodwill may not be 
recoverable to determine whether any impairment in 
this asset may exist and, if so, the extent of such 
impairment. We compare the fair value of our 
reporting unit to its carrying value. If the carrying 
value of the net assets assigned to the reporting unit 
exceeds the fair value of our reporting unit, we would 
record an impairment loss equal to the difference. 
We completed our required annual impairment 
test in the fourth quarters of 2017, 2016 and 2015, 
respectively, and determined in each of those periods 
that the carrying value of goodwill was not impaired. 
In each year, the fair value of our reporting unit, which 
includes goodwill, was significantly in excess of the 
carrying value of our reporting unit.
Investments, including Fair Value Measures and 
Impairments
We invest in various types of securities, 
including short-term and long-term marketable 
securities, principally corporate notes, government 
securities including government sponsored enterprise 
mortgage-backed securities and credit card and auto 
loan asset-backed securities, in which our excess 
cash balances are invested.
In accordance with the accounting standard for 
fair value measurements, we have classified our 
financial assets as Level 1, 2 or 3 within the fair value 
hierarchy. Fair values determined by Level 1 inputs 
utilize quoted prices (unadjusted) in active markets for 
identical assets that we have the ability to access. 
Fair values determined by Level 2 inputs utilize data 
points that are observable such as quoted prices, 
interest rates, yield curves and foreign currency spot 
rates. Fair values determined by Level 3 inputs utilize 
unobservable data points for the asset.
As noted in Note 8, Fair Value Measurements, to 
our consolidated financial statements included in this 
report, a majority of our financial assets have been 
classified as Level 2. These assets have been initially 
valued at the transaction price and subsequently 
valued utilizing third-party pricing services. The pricing 
services use many observable market inputs to 
determine value, including reportable trades, 
benchmark yields, credit spreads, broker/dealer 
quotes, bids, offers, current spot rates and other 
industry and economic events. We validate the prices 
provided by our third-party pricing services by 
understanding the models used, obtaining market 
values from other pricing sources and analyzing 
pricing data in certain instances.
Impairment
We conduct periodic reviews to identify and 
evaluate each investment that has an unrealized loss, 
in accordance with the meaning of other-than-
temporary impairment and its application to certain 
investments. An unrealized loss exists when the 
current fair value of an individual security is less than 
its amortized cost basis. Unrealized losses on 
available-for-sale debt securities that are determined 
to be temporary, and not related to credit loss, are 
recorded, net of tax, in accumulated other 
comprehensive income.
For available-for-sale debt securities with 
unrealized losses, management performs an analysis 
to assess whether we intend to sell or whether we 
would more likely than not be required to sell the 
security before the expected recovery of the 
amortized cost basis. Where we intend to sell a 
security, or may be required to do so, the security’s 
decline in fair value is deemed to be other-than-
temporary and the full amount of the unrealized loss 
is reflected within earnings as an impairment loss.
Regardless of our intent to sell a security, we 
perform additional analysis on all securities with 
unrealized losses to evaluate losses associated with 
the creditworthiness of the security. Credit losses are 
identified where we do not expect to receive cash 
flows sufficient to recover the amortized cost basis of 
a security and are reflected within earnings as an 
impairment loss.
Share-Based Compensation
We make certain assumptions in order to value 
and record expense associated with awards made 
under our share-based compensation arrangements. 
Changes in these assumptions may lead to variability 
with respect to the amount of expense we recognize 
in connection with share-based payments.

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