8-KMaterial Agreements

BIOGEN INC. 8-K Report, Material Agreement (Oct 21, 2010)

Filed October 21, 2010For Securities:BIIB

Summary

Biogen Idec announced a significant amendment and restatement of its collaboration agreement with Genentech, primarily concerning the development of ocrelizumab and GA101, both anti-CD20 antibodies. Under the revised terms, Genentech will assume full responsibility for the further development and commercialization of ocrelizumab for multiple sclerosis, covering all future costs. Biogen Idec will receive tiered royalties ranging from 13.5% to 24% on U.S. sales of ocrelizumab, with its co-promotion profit-sharing for RITUXAN remaining unaffected in this specific regard. Furthermore, Biogen Idec will increase its financial stake in the U.S. development and commercialization of GA101, a next-generation anti-CD20 antibody. The company will now bear 35% of the development and commercialization expenses and will be entitled to 35% to 39% of the profits, contingent upon achieving certain sales milestones. This represents an increase from its previous 30% share of development expenses, and Biogen Idec will make a $10 million payment to Genentech to account for this increased share of past costs. The agreement also outlines changes to Biogen Idec's co-promotion profit-sharing for RITUXAN, which will be triggered by specific events related to the FDA approval of new anti-CD20 products and GA101 sales.

Key Highlights

  • 1Genentech takes over full development and commercialization costs for ocrelizumab in multiple sclerosis.
  • 2Biogen Idec to receive tiered royalties (13.5%-24%) on U.S. sales of ocrelizumab.
  • 3Biogen Idec increases its share of GA101 development and commercialization expenses to 35%.
  • 4Biogen Idec's profit share for GA101 in the U.S. will range from 35% to 39%, tied to sales milestones.
  • 5Biogen Idec will pay $10 million to Genentech for its increased share of past GA101 expenses.
  • 6Co-promotion profit-sharing for RITUXAN will be adjusted based on the FDA approval of new anti-CD20 products and GA101 sales milestones.

Frequently Asked Questions

Genentech will now be solely responsible for the further development and commercialization of ocrelizumab for multiple sclerosis and will fund all related costs. Biogen Idec will receive royalties on U.S. sales.

Biogen Idec is increasing its financial commitment to GA101, agreeing to pay 35% of development and commercialization expenses and receiving between 35% and 39% of profits based on sales achievements. This is an increase from its previous 30% share of development costs.

Yes, the agreement outlines specific events that will trigger a change in Biogen Idec's co-promotion profit-sharing percentage for RITUXAN. These triggers include the FDA approval of new anti-CD20 products developed by Genentech, the FDA approval of GA101 for indications other than chronic lymphocytic leukemia (CLL), and GA101 achieving certain sales thresholds.

Biogen Idec will pay approximately $10 million to Genentech to cover its increased share of previously incurred GA101 development expenses. Additionally, it will bear 35% of future expenses and share in profits.