FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number: 0-12042
BIOGEN, INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-3002117
(State or other jurisdiction
(I.R.S. Employer
of incorporation or organization)
Identification No.)
14 Cambridge Center, Cambridge, Massachusetts 02142
(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code: (617) 679-2000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.01 par value
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
Aggregate market value of Common Stock held by nonaffiliates of the
Registrant at February 24, 1995: $1,339,203,910 (excludes shares held by
directors). Exclusion of shares held by any person should not be construed
to indicate that such person possesses the power, direct or indirect, to
direct or cause the direction of management or policies of the Registrant,
or that such person is controlled by or under common control with the
Registrant. Common Stock outstanding at February 24, 1995: 33,176,843
shares.
Documents Incorporated by Reference
Portions of the Registrant's definitive Proxy Statement for its 1995
Annual Meeting of Stockholders are incorporated by reference into Part III
of this Report, and portions of the Registrant's 1994 Annual Report to
Shareholders are incorporated by reference into Parts II and IV of this
Report.<PAGE>
PART I
Item 1.
Business
Biogen, Inc. ("Biogen" or the "Company") is a
biopharmaceutical company principally engaged in the business of
developing and manufacturing drugs for human health care through
genetic engineering. Biogen currently derives revenues from a
number of products sold by licensees around the world. During
1994, Biogen's licensees generated total sales of approximately
$1.7 billion from these products. In the future, Biogen expects
to derive additional revenues from sales of proprietary products
which Biogen will market. Biogen's leading product candidate is
recombinant beta interferon, a protein being developed for use as
a therapy for multiple sclerosis. A Phase III clinical trial of
recombinant beta interferon in patients with multiple sclerosis
was completed in 1994. The Company intends to seek a license in
the United States and market approval in the countries of the
European Union for beta interferon in the first half of 1995.
Biogen focuses its research and development efforts on areas
where it has particular scientific and competitive strengths:
inflammatory diseases, respiratory diseases and certain cancers
and viruses. Biogen is conducting preclinical tests on three
anti-inflammatory product candidates from its T-cell activation,
T-cell/B-cell interaction and cell adhesion programs. These
product candidates are being tested for therapeutic uses in a
broad range of acute and chronic inflammatory and autoimmune
diseases. Biogen is also conducting preclinical tests on an
antimucolytic agent for treatment in cystic fibrosis and several
other pulmonary diseases. In addition, Biogen has earlier-stage
research programs directed toward finding therapies for renal
failure and restenosis and developing products for human gene
therapy.
Biogen Proprietary Products and Major Research Programs
Biogen's research is focused on biological systems and
processes where its scientific expertise in molecular biology,
cell biology, immunology and protein chemistry can lead to a
greater understanding of disease processes and, as a result, to
the creation of new pharmaceuticals. Biogen selects product
candidates from its research programs to test in clinical trials,
focusing its efforts on those agents which it believes have the
greatest potential competitive advantages and large commercial
markets. Described below are Biogen's beta interferon product
and major research programs.
Recombinant Beta Interferon
Natural beta interferon is a protein produced by fibroblast
cells in response to viral infection. Biogen is developing
recombinant beta interferon for use as a therapy in multiple
sclerosis. Multiple sclerosis is a progressive neurological
disease in which the body loses the ability to transmit messages
among nerve cells, leading to a loss of muscle control, paralysis
and in some cases death. Patients with active relapsing multiple
sclerosis experience an uneven pattern of disease progression,
characterized by periods of stability interrupted by flareups of
the disease after which the patient returns to a new baseline of
functioning. In July 1994, Biogen announced the results of a
Phase III clinical trial in the United States of recombinant beta
interferon for the treatment of multiple sclerosis. Based on the
data from the trial, which was sponsored by the National
Institutes of Health, recombinant beta interferon appeared to
slow the progression of disability and to reduce the number of
flareups of the disease in patients with active relapsing
multiple sclerosis. Biogen intends to seek a license in the
United States and market approval in the countries of the
European Union for recombinant beta interferon in the first half
of 1995. As part of its world-wide strategy to commercialize
recombinant beta interferon, Biogen transferred manufacture of
the product from its former joint venture in Europe to a
production facility in Cambridge. The Company uses a different
production process at the Cambridge facility and is conducting
bio-equivalency studies in a small number of healthy human
volunteers, comparing the drug manufactured in Europe and the
drug manufactured in Cambridge. See also "Patents and Other
Proprietary Rights."
Major Research Programs
Inflammation Program
Biogen scientists have been working to understand the
activities of white blood cells involved in the inflammation
process. Biogen has focused on two events central to
inflammation: (1) the activation of T-cells, specialized white
blood cells which initiate and control the immune response; and
(2) the adhesion of white blood cells to the endothelium (blood
vessel walls) and their migration through the endothelium into
surrounding tissues where they cause inflammation. Activation
and adhesion of white blood cells depend upon the binding of
pairs of receptor molecules which appear on the surface of white
blood cells and endothelial cells. When these pairs of receptors
bind together, their interactions create cellular "pathways" for
activation and adhesion events. Biogen has investigated several
of these cellular pathways and identified new receptors in
certain of these pathways.
Based on its research, Biogen has selected three cellular
pathways as the promising points of therapeutic intervention to
prevent inflammation: (1) the LFA-3/CD2 pathway, which activates
T-cells, (2) the VCAM-1/VLA-4 pathway, which is necessary for
the adhesion of several types of white blood cells to endothelial
cells, and (3) the CD40L/CD40 pathway, which activates B-cells
which produce antibodies. Biogen believes that products which
interrupt these pathways will block the inflammation process at
an early stage, thus preventing tissue damage more effectively
than currently available therapies. Moreover, such products
should result in selective inhibition of the immune system,
rather than the broad suppression associated with many therapies
currently available or under development. In in vitro and in
vivo experiments the product candidates from the inflammation
program have shown promising inhibitory effects. The Company
expects to commence Phase I clinical trials of at least one
product candidate from the inflammation program by 1996.
Gelsolin
Thick viscid secretions in the airways of cystic fibrosis
("CF") patients are believed to cause progressive pulmonary
destruction. A major contributor to the viscosity of CF mucus is
the release of a large amount of filamentous actin by
degenerating inflammatory cells which migrate in large numbers to
the airways of CF patients. Biogen and its collaborators believe
that severing actin filaments contaminating the CF airway mucus
may lead to clinical improvement in CF patients. Biogen is
developing a recombinant form of an actin severing agent, human
r-P gelsolin, for reducing airway obstruction in CF and several
other pulmonary diseases. The Company is presently conducting
preclinical studies of gelsolin product candidates.
Other Research Programs
As part of its further research efforts, Biogen is
investigating the use of growth factors to prevent or treat the
degeneration of the kidney which results from renal failure,
methods of preventing restenosis and various human gene
therapies.
Research Costs
During 1994, 1993 and 1992, Biogen's research and
development costs were approximately $91.2 million, $79.3 million
and $60.4 million, respectively.
There can be no assurance that any of the products described
above or resulting from Biogen's research programs will be
successfully developed, prove to be safe and efficacious at each
stage of clinical trials, meet applicable regulatory standards,
be capable of being produced in commercial quantities at
reasonable costs or be successfully marketed.
Principal Products Being Marketed or Developed by Biogen
Licensees
Intron A Alpha Interferon
Alpha interferon is a naturally occurring protein produced
by normal white blood cells. Biogen has been granted patents in
the United States and in Europe covering the production of alpha
interferons through recombinant DNA techniques and has
applications pending in numerous other countries. See "Patents
and Other Proprietary Rights." Biogen's worldwide licensee for
recombinant alpha interferon, Schering-Plough Corporation
("Schering-Plough"), first began commercial sales of its Intron
A brand of alpha interferon in the United States in 1986 for
hairy-cell leukemia. Schering-Plough now sells Intron A in more
than 60 countries for more than 16 indications, including
hepatitis B, hepatitis C, genital warts and Kaposi's sarcoma.
Sales of Intron A by Schering-Plough were $426 million in
1994, the majority of which were generated outside the United
States. Currently the largest market for Intron A is in Japan
for the treatment of hepatitis C. In 1994, Japan instituted a
17% government-mandated decrease in the price of alpha interferon
and imposed restrictions on off-label use. The United States Food
and Drug Administration ("FDA") has approved Intron A for the
treatment of hepatitis B and hepatitis C in the United States.
Schering-Plough has undertaken studies using Intron A for a
number of additional indications. These include late phase
studies of Intron A for the treatment of chronic myelogenous
leukemia, bladder cancer, non-Hodgkin's lymphoma, malignant
melanoma, and head and neck cancer, and earlier phase trials for
Crohn's disease and as a therapy for patients with HIV infection.
Royalties from Schering-Plough accounted for approximately 40% of
Biogen's revenues (excluding interest) in 1994.
Hepatitis B Vaccines and Diagnostics
Hepatitis B is a blood-borne disease which causes a serious
infection of the liver and substantially increases the risk of
liver cancer. More than 250 million people worldwide have
chronic hepatitis B virus infections. Biogen holds several
important patents related to hepatitis B antigens produced by
genetic engineering techniques. See "Patents and Other
Proprietary Rights." These antigens are used in recombinant
hepatitis B vaccines and in diagnostic test kits used to detect
hepatitis B infection. In total, sales of hepatitis B vaccines
and diagnostic products by Biogen licensees exceeded $1.0 billion
in 1994.
Hepatitis B Vaccines
At least 20 countries around the world, including the United
States, recommend vaccination against hepatitis B for all
infants. The United States Centers for Disease Control and the
American Academy of Pediatrics have also recommended universal
immunization of ten-year-old children and at-risk adolescents.
In 1994, France instituted a vaccination program for infants and
adolescents. The United States Occupational Safety and Health
Administration has recommended that all persons with an
occupational exposure to blood and other infectious material
receive the hepatitis B vaccine.
SmithKline Beecham Biologicals s.a. ("SmithKline") and Merck
& Co., Inc. ("Merck") are the two major worldwide marketers of
hepatitis B vaccines. Biogen has licensed to SmithKline
exclusive rights under Biogen's hepatitis B patents to market
hepatitis B vaccines in the major countries of the world,
excluding Japan. SmithKline's vaccine is approved in the United
States and in over 60 other countries. In 1990, SmithKline and
Biogen entered into a sublicense arrangement with Merck under
which Biogen currently receives royalties. Royalties from
SmithKline and Merck together accounted for approximately 42% of
Biogen's revenues (excluding interest) in 1994. Biogen has also
licensed rights under its hepatitis B patents to Merck and The
Green Cross Corporation non-exclusively in Japan.
In 1994, the English Chancery Court upheld the favorable
decision received by SmithKline in a foreign arbitration with
Biogen regarding the rate of royalties payable under the
agreement between the parties governing non-U.S. sales of
hepatitis B vaccines by SmithKline. As a result, Biogen made a
payment of $2.6 million to SmithKline in 1994. In 1993,
SmithKline initiated arbitration in the United States regarding
similar royalty provisions in a separate agreement governing
sales of hepatitis B vaccines by SmithKline in the United States.
The Company believes that a decision in the United States
similar to the foreign arbitration decision is not probable.
Hepatitis B Diagnostics
Biogen has licensed its proprietary hepatitis B rights
non-exclusively, on an antigen-by-antigen basis, to diagnostic
kit manufacturers. Biogen currently has hepatitis B license or
supply agreements for diagnostic use with more than a dozen
companies, including Abbott Laboratories, the major worldwide
marketer of hepatitis B diagnostic kits, Ortho Diagnostic
Systems, Inc., Roche Diagnostic Systems, Inc. and Organon Teknika
B.V.
Gamma Interferon
Gamma interferon is a protein produced by cells of the
immune system. Biogen developed a recombinant gamma interferon
for Biogen Medical Products Limited Partnership ("BMPLP") under a
development agreement with BMPLP. In Japan, Biogen's licensee,
Shionogi & Co., Ltd. ("Shionogi"), markets recombinant gamma
interferon under the trademark Imunomax -Gamma for renal cell
carcinoma. Biogen supplies Shionogi with its clinical and
commercial needs for recombinant gamma interferon. In general,
gamma interferon has experienced disappointing results in
clinical trials for tested indications.
Other Products
During the first quarter of 1994, Biogen entered into a
license agreement with Eli Lilly and Company ("Lilly") under
which Biogen granted Lilly rights under certain of Biogen's
patents related to gene expression. Lilly uses the patented
vectors and methods in several products that are on the market or
in development. Under the license agreement Biogen receives
royalties on sales of these products. Upon execution of the
license agreement, Lilly paid Biogen approximately $10 million in
royalties related to sales which occurred prior to 1994.
Hirulog Thrombin Inhibitor
In October 1994, Biogen decided to discontinue its major
activities associated with development of its Hirulog thrombin
inhibitor, based on the results of the Phase III trial of
Hirulog in angioplasty. Although positive efficacy benefits
were seen in selected patient populations, the trial results
failed to demonstrate a significant positive effect, compared to
the heparin control, on the primary efficacy end- point in the
overall patient population. Hirulog appeared to demonstrate
efficacy equivalent to the heparin control, although patients
treated with Hirulog had a more than 50% lower incidence of
major bleeding complications. Biogen is seeking a marketing
partner for Hirulog .
Patents and Other Proprietary Rights
Biogen has filed numerous patent applications in the United
States and various other countries seeking protection of a number
of its processes and products, and patents have issued on a
number of these applications. Issues remain as to the ultimate
degree of protection that will be afforded to Biogen by such
patents. There is no certainty that these patents or others, if
obtained, will be of substantial protection or commercial benefit
to Biogen. Furthermore, it is not known to what extent Biogen's
other pending patent applications will ultimately be granted as
patents or whether those patents that have been issued will
prevail if they are challenged in litigation.
Trade secrets and confidential know-how are important to
Biogen's scientific and commercial success. Although Biogen
seeks to protect its proprietary information, there can be no
assurance that others will not either develop independently the
same or similar information or obtain access to Biogen's
proprietary information.
Recombinant Alpha Interferon
Biogen has more than 50 patents in countries around the
world, including the United States and countries of the European
Patent Office, covering the production of recombinant alpha
interferons. Biogen continues to seek related patents in the
United States and other countries.
Four infringement suits have been filed in Biogen's name to
enforce its non-US alpha interferon patents. The first suit was
filed in Vienna, Austria against Boehringer Ingelheim Zentrale
GmbH ("BI") and two of its subsidiaries. The Austrian Court has
stayed Biogen's infringement case pending a decision by the
Austrian Patent Office on BI's petition to revoke Biogen's
European (Austrian) patent on grounds peculiar to Austrian law.
Biogen expects an initial decision from the Austrian Patent
Office in mid 1995. A final decision is unlikely before early
1996. The second suit was filed in Dusseldorf, Germany against
Dr. Karl Thomae GmbH and two other BI companies. The German
trial and appeal courts ruled in favor of Biogen and have
enjoined Thomae from the further manufacture, use or sale of
recombinant alpha-2(c) interferon. The third suit was filed in
Warsaw, Poland against Boehringer Ingelheim Pharma GmbH ("BI
Pharma"). Biogen expects a trial in early 1996 in Poland. The
fourth suit was filed in June 1994 in Tokyo, Japan against Amgen
Limited. The suit seeks to enjoin Amgen from its clinical
testing and planned commercialization of consensus interferon.
Biogen does not expect a decision in this case before 1997.
Recombinant Hepatitis B Antigens
Biogen has more than 75 patents in countries around the
world, including three in the United States and two in countries
of the European Patent Office, and several patent applications,
covering the recombinant production of hepatitis B surface, core
and "e" antigens. Biogen continues to seek related patents in
the United States and other countries.
Biogen's first European hepatitis B patent was opposed by
five companies. The Opposition Division of the European Patent
Office maintained the patent over those oppositions. Two of the
opponents appealed the Opposition Division's decision to the
Technical Board of Appeal, which is the final arbiter of European
oppositions. In June 1994, the Technical Board maintained
Biogen's patent in amended form.
Biogen's second European hepatitis B patent was opposed by
four companies. In 1992, the Opposition Division held that
Biogen's second European hepatitis B patent lacked inventive
step. Biogen appealed this decision to the Technical Board of
Appeal. In July 1994, the Technical Board reversed the
Opposition Division and maintained the Biogen patent.
Biogen has filed three infringement suits to enforce its
hepatitis B patents, in England against Medeva plc ("Medeva"), in
Israel against Bio-Technology General (Israel) Ltd. ("BTG"), and
in Singapore against Scitech Medical Products Pte Ltd. and
Scitech Genetics Pte Ltd. The action against Medeva seeks to
enjoin Medeva's planned production and distribution of a
hepatitis B vaccine. In November 1993, the United Kingdom High
Court of Justice ruled in favor of Biogen and enjoined Medeva
from infringement of one of Biogen's European (UK) patents. The
Court then stayed the injunction pending Medeva's appeal. In
October 1994, the United Kingdom Court of Appeal reversed the
High Court and held the Biogen patent to be invalid. Biogen has
received provisional leave from the United Kingdom House of Lords
to appeal this decision. If the House of Lords withdraws the
leave to appeal or does not reverse the decision of the Court of
Appeal and hold the Biogen patent valid and infringed, the Biogen
hepatitis B patent will no longer be enforceable in the United
Kingdom or in any of the various United Kingdom patent
registration countries. In 1992, BTG brought an action against
Biogen seeking a compulsory license under Biogen's Israeli
hepatitis B patent and Biogen filed an infringement suit against
BTG, seeking to enjoin BTG's planned production, sale and
distribution of hepatitis B vaccine. Both cases are continuing
in Israel. In 1993, Biogen sued Scitech Products and Scitech
Genetics in Singapore. Since Singapore is a United Kingdom
patent registration country, Biogen's continued prosecution of
this case depends on a favorable outcome in the United Kingdom
House of Lords on Biogen's appeal of the decision holding
Biogen's European (UK) patent invalid.
Recombinant Beta Interferon
The European Patent Office and certain countries have
granted patents to Biogen covering the recombinant production of
beta interferon. In other countries, including the United
States, Biogen has filed patent applications and continues to
seek patents covering the recombinant production of beta
interferon and related technology.
Biogen's European patent was opposed by one company. In
December 1993, the European Patent Office's Opposition Division
dismissed the opposition and maintained Biogen's patent. The
opponent appealed this decision to the Technical Board of Appeal.
Biogen expects a decision on the appeal in early 1996. In the
United States, Biogen's claims to key intermediates in the
recombinant production of beta interferon were involved in an
interference to determine who was the first to invent those
intermediates in the United States. Priority of invention was
awarded to another party in the interference. Biogen's pending
United States claims to the production of recombinant beta
interferon were not part of that interference. Prosecution of
these claims continues.
Other parties have also filed patent applications in various
countries covering the recombinant production of beta interferon,
and, in particular, key intermediates in that production, as well
as beta interferon itself. One such party has been granted
several patents in the European Patent Office and in certain
countries on these key intermediates. The same party was awarded
priority to those intermediates in the United States
interference. Biogen has obtained non-exclusive rights to
manufacture, use and sell recombinant beta interferon under these
patents in various countries of the world, including the United
States, Japan and most European countries. Another party has
been granted various patents in the United States and in other
countries on beta interferon itself. Biogen has obtained
worldwide, non-exclusive rights under these patents to make, use
and sell recombinant beta interferon. Two other patents issued
in 1994 to competitors of Biogen with claims related to beta
interferon; one in the United States and one in the European
Patent Office. With respect to the United States patent, Biogen
believes there are substantial issues of validity, enforceability
and scope of claims. With respect to the European patent, Biogen
has been aware of it for many years and believes that it has no
applicability to Biogen's recombinant beta interferon product.
Biogen does not believe that either patent will prevent its
commercialization of recombinant beta interferon for the
treatment of multiple sclerosis.
Recombinant Gamma Interferon
In 1988 and 1990, Genentech, Inc. ("Genentech") was granted
several patents in the United States and Europe claiming
recombinant gamma interferon and intermediates and methods for
the production of recombinant gamma interferon. In January
1990, Genentech and Biogen and BMPLP entered into a cross-license
agreement under which Genentech and Biogen/BMPLP each licensed to
the other its United States patent rights relating to certain
gamma interferons and their intermediates and processes of
production for certain fields of use. At the same time, Biogen
granted Genentech a non-exclusive worldwide sublicense for
certain proteins under certain of its licensed process patents
relating to the secretion of proteins. Biogen opposed the
Genentech European gamma interferon patent in the European Patent
Office. The European Patent Office maintained the Genentech
patent in a decision that cannot be appealed.
Other Patents
In January 1994, Biogen filed suit in Osaka, Japan, against
Sumitomo Pharmaceutical Co., Ltd. ("Sumitomo"). The suit seeks
to enjoin Sumitomo from importing and selling its recombinant
human growth hormone products in Japan. Biogen believes that
these products are made by a process that infringes certain of
its licensed patents relating to the secretion of proteins.
Biogen does not expect a decision in the case until 1997.
In January 1994, Biogen granted Eli Lilly and Company
("Lilly") a non-exclusive license under certain of Biogen's
patents for gene expression. Lilly uses the patented vectors and
methods in several products that are on the market or in
development.
Third Party Patents
Biogen is aware that others, including various universities
and companies working in biotechnology, have also filed patent
applications and have been granted patents in the United States
and in other countries claiming subject matter potentially useful
or necessary to Biogen's business. Some of those patents and
applications claim only specific products or methods of making
such products, while others claim more general processes or
techniques useful or now used in the biotechnology industry.
Genentech has been granted patents and is prosecuting other
patent applications in the United States and certain other
countries which it may allege are currently used by Biogen and
the rest of the biotechnology industry to produce recombinant
proteins in microbial hosts. Genentech has offered to Biogen and
others in the industry non-exclusive licenses under those patents
and patent applications for various proteins and in various
fields of use, but not for others. Schering-Plough, Biogen's
exclusive licensee for recombinant alpha interferon, is licensed
under certain of these patents for the manufacture, use and sale
of recombinant alpha interferon. The ultimate scope and validity
of Genentech's patents, of other existing patents, or of patents
which may be granted to third parties in the future, the extent
to which Biogen may wish or be required to acquire rights under
such patents, and the availability and cost of acquiring such
rights currently cannot be determined by Biogen.
There has been, and Biogen expects that there may continue
to be, significant litigation in the industry regarding patents
and other intellectual property rights. Such litigation could
create uncertainty and consume substantial resources.
Competition and Marketing
Competition in the biotechnology and pharmaceutical
industries is intense and comes from many and varied sources.
Biogen does not believe that it or any of the other industry
leaders can be considered dominant in view of the rapid
technological change in the industry. Biogen experiences
significant competition from specialized biotechnology firms in
the United States, Europe and elsewhere and from many large
pharmaceutical, chemical and other companies. Certain of these
companies have substantially greater financial, marketing and
human resources than Biogen. The pharmaceutical companies have
considerable experience in undertaking clinical trials and in
obtaining regulatory approval to market pharmaceutical products.
In addition, certain of Biogen's products may be subject to
competition from products developed using alternatives to
biotechnology techniques.
Much competition is directed towards establishing
proprietary positions through research and development. A key
aspect of such competition is recruiting and retaining qualified
scientists and technicians. Biogen believes that it has been
successful in attracting skilled and experienced scientific
personnel. Biogen believes that leadership in the industry will
be based on managerial and technological superiority and may be
influenced significantly by patents and other forms of protection
of proprietary information. See "Patents and Other Proprietary
Rights". The achievement of such a position depends upon Biogen's
ability to attract and retain skilled and experienced personnel,
its ability to identify and exploit commercially the products
resulting from biotechnology and the availability of adequate
financial resources to fund facilities, equipment, personnel,
clinical testing, manufacturing and marketing.
Many of Biogen's competitors are working to develop products
similar to those under development by Biogen. The timing of the
entry of a new pharmaceutical product into the market can be an
important factor in determining the product's eventual success
and profitability. Early entry may have important advantages in
gaining product acceptance and market share. Moreover, for
certain diseases with limited patient populations, the FDA is
prevented under the Orphan Drug Act, for a period of seven years,
from approving more than one application for the "same" product
for a single orphan drug designation, unless a later product is
considered clinically superior. Accordingly, the relative speed
with which Biogen can develop products, complete the testing and
approval process and supply commercial quantities of the product
to the market is expected to have an important impact on Biogen's
competitive position. In addition, competition among products
approved for sale may be based, among other things, on patent
position, product efficacy, safety, reliability, availability and
price.
Regulation
Biogen's current and contemplated activities and the
products and processes that will result from such activities are
and will be subject to substantial government regulation.
Before new pharmaceutical products may be sold in the United
States and other countries, clinical trials of the products must
be conducted and the results submitted to appropriate regulatory
agencies for approval. These clinical trial programs generally
involve a three-phase process. Typically, in Phase I, trials are
conducted in volunteers or patients to determine the early side
effect profile and, perhaps, the pattern of drug distribution and
metabolism. In Phase II, trials are conducted in groups of
patients with a specific disease in order to determine
appropriate dosages, expand evidence of the safety profile and,
perhaps, determine preliminary efficacy. In Phase III, large
scale, comparative trials are conducted on patients with a target
disease in order to generate enough data to provide the
statistical proof of efficacy and safety required by national
regulatory agencies. The receipt of regulatory approvals often
takes a number of years, involving the expenditure of substantial
resources and depends on a number of factors, including the
severity of the disease in question, the availability of
alternative treatments and the risks and benefits demonstrated in
clinical trials. On occasion, regulatory authorities may require
larger or additional studies, leading to unanticipated delay or
expense.
In connection with the commercialization of products
resulting from Biogen's projects, it is necessary, in a number of
countries, to comply with certain regulations relating to the
manufacturing and marketing of such products and to the products
themselves. For example, the commercial manufacturing, marketing
and exporting of pharmaceutical products require the approval of
the FDA in the United States and of comparable agencies in other
countries. The FDA has established mandatory procedures and
safety standards which apply to the manufacture, clinical testing
and marketing of pharmaceutical products in the United States.
The process of seeking and obtaining FDA approval for a new
product and the facilities in which it can be produced is likely
to take a number of years and involve the expenditure of
substantial resources. In addition, the regulatory approval
processes for products in the United States, Canada and Europe
are undergoing or may undergo changes. Biogen cannot determine
what effect any changes in regulatory approval processes may have
on its business.
In the United States, the federal government regularly
considers reforming health care coverage and costs. Resulting
legislation or regulatory actions may have a significant effect
on the Company's business. Biogen's ability to commercialize
successfully human pharmaceutical products also may depend in
part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government
health administration authorities, private health insurers and
other organizations. Currently, substantial uncertainty exists
as to the reimbursement status of newly approved health care
products by third-party payors.
Biogen's policy is to conduct relevant research in
compliance with the current United States National Institutes of
Health Guidelines for Research Involving Recombinant DNA
Molecules (the "NIH Guidelines") and all other federal and state
regulations. By local ordinance, Biogen is required, among other
things, to comply with the NIH Guidelines in relation to its
facilities in Cambridge, Massachusetts, and is required to
operate pursuant to certain permits.
Various laws, regulations and recommendations relating to
safe working conditions, laboratory practices, the experimental
use of animals and the purchase, storage, movement, import and
export and use and disposal of hazardous or potentially hazardous
substances, including radioactive compounds and infectious
disease agents, used in connection with Biogen's research work
are or may be applicable to its activities. These include, among
others, the United States Atomic Energy Act, the Clean Air Act,
the Clean Water Act, the Occupational Safety and Health Act, the
National Environmental Policy Act, the Toxic Substances Control
Act and the Resource Conservation and Recovery Act, national
restrictions on technology transfer and import, export and
customs regulations. The extent of government regulation which
might result from future legislation or administrative action
cannot accurately be predicted. Certain agreements entered into
by Biogen involving exclusive license rights may be subject to
national or supranational antitrust regulatory control, the
effect of which also cannot be predicted.
Employees
At January 1, 1995, Biogen employed 433 full-time employees,
of whom 78 held Ph.D. and/or M.D. degrees. Of the 433 employees,
169 were engaged in, or directly supported, research and
development and 128 were involved in, or directly supported,
manufacturing, quality assurance/quality control, regulatory,
medical operations and preclinical and clinical development.
Biogen maintains consulting arrangements with a number of
scientists at various universities and other research
institutions in Europe and the United States, including the eight
outside members of its Scientific Board.
Item 2.
Properties
Substantially all of Biogen's facilities are located in
Cambridge, Massachusetts, where the Company leases a total of
approximately 220,000 square feet of office and research and
development space in all or part of five buildings. Most of the
Company's operations are contained in a 67,000 square foot
building housing a pilot production plant, laboratories and
office space, in a building with 64,000 square feet of space
containing laboratories, purification and aseptic bottling
facilities and office space, in a multitenant building where the
Company occupies approximately 54,000 square feet of office space
and in a 17,000 square foot building designed for specialized
research laboratories. The leases for these sites terminate in
1998 (with the right to renew), 2004, 1998 (with the right to
renew) and 2004, respectively.
In 1993, the Company began construction of a 150,000 square
foot building in Cambridge, Massachusetts which will house
laboratories and office space. The anticipated cost of
construction, including the land, is approximately $36 million.
Upon completion of the building, the Company has the option,
subject to certain conditions, to obtain a secured term loan with
a bank for up to $25 million for a period of up to ten years.
The building is scheduled for completion in 1995.
In 1994, the Company opened its European headquarters which
consists of 1,450 square meters of office space in a multitenant
building in Nanterre, France. The lease for this space
terminates in 2003.
The Company believes that its pilot production plant in
Cambridge, Massachusetts and existing outside sources will allow
it to meet its production needs for clinical trials and its
initial commercial production needs for its beta interferon
product. Biogen believes that the facilities are in compliance
with appropriate regulatory standards. The Company expects that
additional facilities and outside sources will be required to
meet the Company's future research and production needs.
Item 3.
Legal Proceedings
During the fourth quarter of 1994, a total of six class
action lawsuits were initiated against the Company and several of
its directors and officers. On March 3, 1995, these cases were
consolidated into a single proceeding in the United States
District Court for the District of Massachusetts. The lawsuits
generally allege that the Company and the named directors and
officers violated federal securities laws in connection with the
Company's public disclosures, including disclosures relating to
its Hirulog thrombin inhibitor and other disclosures made in
connection with patent matters related to beta interferon. The
plaintiffs seek damages in unspecified amounts.
For a description of legal proceedings relating to patent
rights, see Item 1, "Business-Patents and Other Proprietary
Rights."
Item 4.
Submission of Matters to a Vote of Security Holders
None
Executive Officers
The following is a list of the executive officers of the
Company and their principal positions with the Company. Each
individual officer serves at the pleasure of the Board of
Directors.
Name Age Positions
James L. Vincent 55 Chairman of the Board of Directors,
Chief Executive Officer
James R. Tobin 50 President and Chief Operating Officer
Michael J. Astrue 38 VicePresident-GeneralCounsel,Secretary
andClerk
Kenneth M. Bate 44 Vice President - Marketing and Sales
Frank A. Burke, Jr. 51 Vice President - Human Resources
Lawrence S. Daniels 52 Vice President - Strategic Planning
Joseph M. Davie 55 Vice President - Research
Irving H. Fox. 51 Vice President - Medical Affairs
Timothy M. Kish 43 Vice President - Finance, Chief
Financial Officer and Treasurer
James C. Mullen 36 Vice President - Operations
R. Maurice Powell, Jr.39 Vice President - QA/QC
Irvin D. Smith 62 Vice President - Development Operations
The background of these officers is as follows:
James L. Vincent joined the Company as its Chief Executive
Officer in October 1985. He also served as Chief Operating
Officer and President from April 1988 until February 1994. He is
also Chairman of the Board of Directors of the Company. Before
joining Biogen, Mr. Vincent served as Group Vice President,
Allied Corporation and as President, Allied Health & Scientific
Products Company, a subsidiary of Allied Corporation. Before
joining Allied Corporation, Mr. Vincent was with Abbott
Laboratories, Inc. where he served in various capacities,
including Executive Vice President, Chief Operating Officer and
Director of the parent corporation. Mr. Vincent is, in addition,
on the Board of Trustees of Duke University and the Board of
Trustees of the University of Pennsylvania, as well as a member
of the Board of Overseers of Wharton Graduate Business School of
the University of Pennsylvania.
James R. Tobin joined the Company as its President and Chief
Operating Officer in February 1994. Prior to joining the
Company, Mr. Tobin served in various capacities at Baxter
International, including Executive Vice President from 1988 until
1992 and President and Chief Operating Officer from 1992 until
1993. Mr. Tobin is a director of Creative BioMolecules, Inc. and
Medisense Inc.
Michael J. Astrue was appointed Vice President - General
Counsel, Secretary and Clerk of the Company in June 1993. Prior
to joining the Company, Mr. Astrue was a partner in the Boston
law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
and a managing director of its wholly-owned consulting firm, ML
Strategies, from November 1992 to June 1993. From June 1989
through November 1992, Mr. Astrue served as General Counsel of
the United States Department of Health and Human Services. From
April 1988 through June 1989, Mr. Astrue served as Associate
Counsel to the President of the United States.
Kenneth M. Bate was appointed Vice President - Marketing and
Sales in August 1993 after serving as Vice President - Finance
and Chief Financial Officer since August 1990 and as Treasurer of
the Company since December 1991. From 1978 until 1990, Mr. Bate
was employed by Peter Kiewit & Sons, Inc. and its subsidiaries in
various financial capacities, most recently as Vice President -
Treasurer.
Frank A. Burke, Jr., was appointed Vice President - Human
Resources in May 1986 after serving for 12 years in various human
resource management positions at Allied-Signal, Inc., most
recently as Director of Compensation and Employee Benefits of the
Engineered Materials Sector.
Lawrence S. Daniels was appointed Vice President - Strategic
Planning of the Company in August 1993 after serving as Vice
President - Marketing and Business Development since November
1991. Prior to joining the Company, Mr. Daniels served for nine
years in planning and administrative functions for Allied-Signal,
Inc., most recently as Vice President, Corporate Strategy
Development.
Joseph M. Davie, M.D., Ph.D. was appointed Vice President -
Research of the Company in April 1993. Prior to joining the
Company, Dr. Davie was employed by Searle Corporation where he
served as Senior Vice President - Science and Technology from
January 1993 to April 1993, President - Research and Development
from July 1987 to January 1993 and Senior Vice President -
Discovery Research from January 1987 to July 1987.
Irving H. Fox, M.D. was appointed Vice President - Medical
Affairs in February 1990. Dr. Fox joined Biogen following a
14-year career at the University of Michigan, where he held
professorships in internal medicine and biological chemistry, and
from 1978 to 1990, was program director of the Clinical Research
Center at the University of Michigan Hospital.
Timothy M. Kish was appointed Vice President - Finance,
Treasurer and Chief Financial Officer of the Company in August
1993 after serving as Corporate Controller of the Company since
1986. Prior to joining Biogen, Mr. Kish was Director of Finance
for Allied Health & Scientific Products Company, a subsidiary of
Allied Corporation. Before joining Allied, Mr. Kish served in
various capacities at Bendix Corp., most recently as Executive
Assistant to the President.
James C. Mullen became Biogen's Vice President - Operations
in December 1991 after serving as Senior Director - Operations
since February 1991. Mr. Mullen joined the Company in 1989 as
Director - Facilities and Engineering and then served as Acting
Director - Manufacturing and Engineering. Before coming to
Biogen, Mr. Mullen held various positions of responsibility from
1984 through 1988 at SmithKline-Beckman Corporation, most
recently as Director, Engineering - SmithKline and French
Laboratories, Worldwide.
R. Maurice Powell, Jr. was appointed Vice President-QA/QC in
November 1994. Prior to joining Biogen, Mr. Powell served in
various capacities from 1978 to 1994 at Baxter Healthcare
Corporation, most recently as Vice President of Manufacturing,
Quality and Regulatory Management from 1993 to 1994 and Vice
President of Regulatory Affairs and Quality Assurance from 1992
to 1993.
Irvin D. Smith, Ph.D. was appointed Vice President - Quality
Assurance/Quality Control and Drug Development in August 1993
after serving as General Manager of Bioferon, Biogen's former
joint venture in Germany, since July 1991. The name of his
position was changed to Vice President-Development Operations in
1994. Dr. Smith was a private consultant from March 1990 to July
1991 and President and Chief Executive Officer of Applied
BioSystems from October 1987 to March 1990.
PART II
Item 5.
Market for Registrant's Common Equity and Related Stockholder
Matters
The section entitled "Market for Securities" in the
Company's 1994 Annual Report to Shareholders is hereby
incorporated by reference.
Item 6.
Selected Financial Data
The section entitled "Selected Financial Data" in the
Company's 1994 Annual Report to Shareholders is hereby
incorporated by reference.
Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
The section entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the
Company's 1994 Annual Report to Shareholders is hereby
incorporated by reference.
Item 8.
Financial Statements and Supplementary Data
The sections entitled "Consolidated Balance Sheets,"
"Consolidated Statements of Income," "Consolidated Statements of
Cash Flows," "Consolidated Statements of Shareholders' Equity,"
"Notes to Consolidated Financial Statements" and "Report of
Independent Accountants" in the Company's 1994 Annual Report to
Shareholders are hereby incorporated by reference.
Item 9.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable
PART III
Item 10.
Directors and Executive Officers of the Registrant, Promoters and
Control Persons
Directors
The sections entitled "Election of Directors" and "Trading
Reports" in the Company's definitive proxy statement for its 1995
Annual Meeting of Stockholders, which the Company intends to file
with the Commission no later than April 30, 1995, are hereby
incorporated by reference.
Executive Officers
Information concerning the Company's Executive Officers is
set forth in Part I of this Annual Report on Form 10-K.
Item 11.
Executive Compensation
The sections entitled "Election of Directors", "Executive
Compensation", "Joint Report on Compensation Philosophy" and
"Performance Graph" in the Company's definitive proxy statement
for its 1995 Annual Meeting of Stockholders, which the Company
intends to file with the Commission no later than April 30, 1995,
are hereby incorporated by reference.
Item 12.
Security Ownership of Certain Beneficial Owners and Management
The section entitled "Share Ownership" in the Company's
definitive proxy statement for its 1995 Annual Meeting of
Stockholders, which the Company intends to file with the
Commission no later than April 30, 1995, is hereby incorporated
by reference.
Item 13.
Certain Relationships and Related Transactions
The section entitled "Employment Arrangements with the
Company and Certain Transactions" in the Company's definitive
proxy statement for its 1995 Annual Meeting of Stockholders,
which the Company intends to file with the Commission no later
than April 30, 1995, is hereby incorporated by reference.
PART IV
Item 14.
Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) Financial Statements and Financial Statement Schedules.
The following documents are filed as a part of this report:
1. Financial Statements, as required by Item 8 of this Form,
incorporated by reference herein from the 1994 Annual Report to
Shareholders attached hereto as Exhibit 13:
Item Location
Consolidated Balance Sheets Annual Report under the
caption "Biogen, Inc. and
Subsidiaries Consolidated
Balance Sheets."
Consolidated Statements of Income Annual Report under the
caption "Biogen, Inc. and
Subsidiaries Consolidated
Statements of Income."
Consolidated Statements of
Cash Flows Annual Report under the
caption "Biogen, Inc. and
Subsidiaries Consolidated
Statements of Cash Flows."
Consolidated Statements of
Shareholders' Equity Annual Report under the
caption "Biogen, Inc. and
Subsidiaries Consolidated
Statements of Shareholders'
Equity."
Notes to Consolidated
Financial Statements Annual Report under the
caption "Biogen, Inc. and
Subsidiaries Notes to
Consolidated Financial
Statements."
Reports of Independent Accountants Annual Report under the
caption "Report of Independent
Accountants."
With the exception of the portions of the 1994 Annual Report
to Shareholders specifically incorporated herein by reference,
such report shall not be deemed filed as part of this Annual
Report on Form 10-K.
(2) Financial Statement Schedules: None
(3) Exhibits
Exhibit No. Description
(3.1) Articles of Organization, as amended (g)
(3.2) By-Laws, as amended (k)
(4.1) Form of Common Stock Share Certificate (m)
(4.2) Certificate of Designation of Series A Junior
Participating Preferred Stock (f)
(4.3) Rights Agreement dated as of May 8, 1989 between
Registrant and The First National Bank of Boston, as
Rights Agent (f)
(10.1) Independent Consulting and Project Agreement dated as
of June 29, 1979 between Registrant and Kenneth Murray
(a)**
(10.2) Letter Agreement dated March 12, 1993 with Dr. Kenneth
Murray relating to renewal of Independent Consulting
Agreement (k)**
(10.3) Minute of Agreement dated February 5, 1981 among
Registrant, The University Court of the University of
Edinburgh and Kenneth Murray (a)**
(10.4) Independent Consulting Agreement dated as of June 29,
1979 between Registrant and Phillip A. Sharp (a)**
(10.5) Letter Agreement dated December 10, 1992 with Phillip
Sharp relating to chairmanship of Scientific Board and
renewal of Independent Consulting Agreement (k)**
(10.6) Project Agreement dated as of December 14, 1979 between
Registrant and Phillip A. Sharp (a)**
(10.7) Share Restriction and Repurchase Agreement dated as of
December 15, 1979 between Registrant and Phillip A.
Sharp (a)**
(10.8) Consulting Agreement dated as of April 1, 1991, as
amended, between Registrant and Alexander G. Bearn
(i)**
(10.9) Form of Amendment dated July 1, 1988 to Independent
Consulting Agreement between Registrant and Scientific
Board Members (e)**
(10.10) Form of Extension of Independent Consulting Agreement
between Registrant and Scientific Board Members (g)**
(10.11) Form of Share Purchase Agreement between Registrant and
Scientific Board Members (a)**
(10.12) Form of Stock Option Agreement between Registrant and
each of Alan Belzer, Harold W. Buirkle, James W.
Stevens and Roger H. Morley (c)**
(10.13) Letter regarding employment of James L. Vincent dated
September 23, 1985 (b)**
(10.14) Form of Stock Option Agreement with James L. Vincent
under 1985 Non-Qualified Stock Option Plan (k)**
(10.15) Letter dated December 13, 1989 regarding employment of
Dr. Irving H. Fox (h)**
(10.16) Letter dated August 13, 1990 regarding employment of
Mr. Kenneth M. Bate (i)**
(10.17) Letter dated October 23, 1991 regarding employment of
Mr. Lawrence S. Daniels (k)**
(10.18) Letter dated April 7, 1993 regarding employment of Dr.
Joseph M. Davie (l)**
(10.19) Letter dated January 12, 1994 regarding employment of
James R. Tobin (n)**
(10.20) Letter dated August 30, 1993 regarding employment of
Irvin D. Smith, Ph.D. (n)**
(10.21) Form of Indemnification Agreement between Registrant
and each Director and Executive Officer (e)**
(10.22) Second Amended and Restated Agreement and Certificate
of Limited Partnership dated as of May 15, 1984 among
Biogen Medical Products, Inc. as General Partner and
certain limited partners (g)
(10.23) First Amendment dated December 22, 1986 to Agreement
and Certificate of Limited Partnership (c)
(10.24) Technology License Agreement dated May 15, 1984 between
Biogen B.V. and Biogen Medical Products Limited
Partnership (g)
(10.25) Development Contract dated May 15, 1984 between Biogen
B.V. and Biogen Medical Products Limited Partnership
(g)
(10.26) Amendment dated December 22, 1986 to Development
Contract (c)
(10.27) Amendment dated January 1, 1987 to Development Contract
(d)
(10.28) Extension Agreement dated October 10, 1989 relating to
Development Contract (g)
(10.29) Extension Agreement dated December 31, 1993 relating to
Development Contract (n)
(10.30) Extension Agreement dated December 31, 1994 relating to
Development Contract *
(10.31) Joint Venture Option Agreement dated May 15, 1984
between Biogen Inc. and Biogen Medical Products Limited
Partnership (g)
(10.32) Purchase Option Agreement dated May 15, 1984 between
Biogen B.V. and the limited partners of Biogen Medical
Products Limited Partnership (g)
(10.33) Guaranty dated May 15, 1984 to Biogen Medical Products
Limited Partnership by Registrant guaranteeing certain
obligations of Biogen Medical Products, Inc., Biogen
B.V. and Biogen Inc. to the Partnership (g)
(10.34) Demand Loan Agreement dated October 1, 1989 between
Biogen Medical Products Limited Partnership and Biogen
Medical Products, Inc. (g)
(10.35) Standard Form Commercial Lease dated January 29, 1981
between Ira C. Foss and Ira C. Foss, Jr., as Trustees
of Eastern Realty Trust, and B. Leasing, Inc. (g)
(10.36) Letter of May 24, 1989 exercising option under Standard
Form Commercial Lease dated January 29, 1981 (g)
(10.37) Lease Extension Agreement dated February 20, 1990
between Eastern Realty Trust and Registrant (g)
(10.38) Standard Form Commercial Lease dated June 1, 1989
between Eastern Realty Trust and Registrant (g)
(10.39) Cambridge Center Lease dated October 4, 1982 between
Mortimer Zuckerman, Edward H. Linde and David Barrett,
as Trustees of Fourteen Cambridge Center Trust, and B.
Leasing, Inc. (a)
(10.40) First Amendment to Lease dated January 19, 1989
amending Cambridge Center Lease dated October 4, 1982
(k)
(10.41) Second Amendment to Lease dated March 8, 1990 amending
Cambridge Center Lease dated October 4, 1982 (k)
(10.42) Third Amendment to Lease dated September 25, 1991
amending Cambridge Center Lease dated October 4, 1982
(k)
(10.43) Lease dated October 6, 1993 between North Parcel
Limited Partnership and Biogen Realty Limited
Partnership (n)
(10.44) 1983 Employee Stock Purchase Plan as amended through
April 3, 1992 and restated (j)**
(10.45) 1982 Incentive Stock Option Plan as amended through
March 25, 1993 and restated with form of Option
Agreement (l)**
(10.46) 1985 Non-Qualified Stock Option Plan as amended through
March 25, 1993 and restated with form of Option
Agreement (l)**
(10.47) 1987 Scientific Board Stock Option Plan as amended
through April 3, 1992 and restated with form of Option
Agreement (j)**
(10.48) Voluntary Executive Supplemental Savings Plan *,**
(10.49) Supplemental Executive Retirement Plan *,**
(10.50) Voluntary Board of Directors Savings Plan *,**
(10.51) Exclusive License and Development Agreement dated
December 8, 1979 between Registrant and Schering
Corporation (a)
(10.52) Amendatory Agreement dated May 14, 1985 to Exclusive
License and Development Agreement dated December 8,
1979 (b)
(10.53) Amendment and Settlement Agreement dated September 29,
1988 to Exclusive License and Development Agreement
dated December 8, 1979 (k)
(10.54) Amendment dated March 20, 1989 to Exclusive License and
Development Agreement dated December 8, 1979 (k)
(10.55) License Agreement (United States) dated March 28, 1988
between Registrant and SmithKline Beecham Biologicals,
s.a. (as successor to Smith Kline-R.I.T, s.a.) (k)
(10.56) License Agreement (International) dated March 28, 1988
between Registrant and SmithKline Beecham Biologicals,
s.a. (as successor to Smith Kline-R.I.T., s.a.) (k)
(10.57) Sublicense Agreement dated as of February 15, 1990
among Registrant, SmithKline Beecham Biologicals, s.a
(as successor to SmithKline Biologicals, s.a.) and
Merck and Co., Inc. (k)
(10.58) Supplemental Amendment and Agreement dated as of March
1, 1994 between the Registrant and Schering
Corpotration (o)
(11) Computation of Earnings per Share *
(12) None
(13) Incorporated portions from Biogen, Inc. 1993 Annual
Report to Shareholders *
(22) Subsidiaries of the Registrant *
(24.1) Consent of Price Waterhouse (Included in Part IV
hereof)
(29) None
(a) Previously filed with the Commission as an exhibit to
Registration Statement on Form S-1, File No. 2-81689
and incorporated herein by reference.
(b) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1985, as amended, File No. 0-12042
and incorporated herein by reference.
(c) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1986, as amended, File No. 0-12042
and incorporated herein by reference.
(d) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1987, File No. 0-12042 and
incorporated herein by reference.
(e) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1988, File No. 0-12042 and
incorporated herein by reference.
(f) Previously filed with the Commission as an exhibit to
Registration Statement on Form 8-A, File No. 0-12042,
filed May 26, 1989 and incorporated herein by
reference.
(g) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1989, File No. 0-12042, and
incorporated herein by reference.
(h) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1990, File No. 0-12042, and
incorporated herein by reference.
(i) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1991, File No. 0-12042, and
incorporated herein by reference.
(j) Previously filed with the Commission as an exhibit to
Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1992, File No. 0-12042, and
incorporated herein by reference.
(k) Previously filed with the Commission as an exhibit to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993, File No. 0-12042,
and incorporated herein by reference.
(l) Previously filed with the Commission as an exhibit to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993, File No. 0-12042, and
incorporated herein by reference.
(m) Previously filed with the Commission as an exhibit to
Registration Statement on Form S-3, File No. 33-51639,
and incorporated herein by reference.
(n) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1994, File No. 0-12042, and
incorporated herein by reference.
(o) Previously filed with the Commission as an exhibit to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994, File No. 0-12042, and
incorporated herein by reference.
* Filed herewith
** Management contract or compensatory plan or arrangement
(b) Reports on Form 8-K
None.
<PAGE>
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BIOGEN, INC.
By:/s/ James L. Vincent
James L. Vincent, Chairman of the Board
and Chief Executive Officer
Dated March 6, 1995
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
Signatures Title Date
/s/ James L. Vincent Chairman, Board of Directors March 6,
1995
James L. Vincent (principal executive officer)
/s/ Timothy M. Kish Vice President-Finance(principal
March 6, 1995
Timothy M. Kish financial and accounting officer)
/s/ Alexander Bearn Director March 6, 1995
Alexander Bearn
/s/ Harold W. Buirkle Director March 6, 1995
Harold W. Buirkle
/s/ Alan Belzer Director March 6, 1995
Alan Belzer
/s/ Roger H. Morley Director March 6, 1995
Roger H. Morley
/s/ Kenneth Murray Director March 6, 1995
Kenneth Murray
/s/ Phillip A. Sharp Director March 6, 1995
Phillip A. Sharp
/s/ James W. Stevens Director March 6, 1995
James W. Stevens
/s/ James R. Tobin Director March 6, 1995
James R. Tobin
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
(10.30) Extension Agreement dated December 31, 1994 relating to
Development Contract.
(10.48) Voluntary Executive Supplemental Savings Plan.
(10.49) Supplemental Executive Retirement Plan.
(10.50) Voluntary Board of Directors Savings Plan
(11) Computation of Earnings per Share.
(13) Incorporated portions from Biogen, Inc. 1994 Annual
Report to Shareholders.
(22) Subsidiaries of the Registrant.
(24.1) Consent of Price Waterhouse LLP
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<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 54,682
<SECURITIES> 213,120
<RECEIVABLES> 18,502
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 294,784
<PP&E> 104,651
<DEPRECIATION> 31,489
<TOTAL-ASSETS> 377,862
<CURRENT-LIABILITIES> 47,928
<BONDS> 0
<COMMON> 331
0
0
<OTHER-SE> 329,603
<TOTAL-LIABILITY-AND-EQUITY> 377,862
<SALES> 140,433
<TOTAL-REVENUES> 156,344
<CGS> 9,948
<TOTAL-COSTS> 125,847
<OTHER-EXPENSES> 32,404
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,907)
<INCOME-TAX> 2,990
<INCOME-CONTINUING> (4,897)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,897)
<EPS-PRIMARY> (0.15)
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</TABLE>
EXTENSION AGREEMENT
This Extension Agreement dated as of December 31, 1994, is
between Biogen, Inc., a Massachusetts corporation ("Biogen"), and
Biogen Medical Products Limited Partnership, a Massachusetts
limited partnership (the "Partnership").
WHEREAS, Biogen and the Partnership entered into a Development
Contract dated May 15, 1984, as amended October 10, 1989 and
extended December 2, 1992, relating to gamma interferon and
interleukin-2 (the "Development Contract"); and
WHEREAS, the Development Contract will expire on December 31,
1994, and the parties wish to extend such date to December 31,
1995.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Section 12(e) is hereby amended by deleting the date
"December 31, 1994" and substituting therefor "December
31, 1995."
2. In all other respects the Development Contract is hereby
ratified and confirmed.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first set forth above.
BIOGEN MEDICAL PRODUCTS LIMITED
PARTNERSHIP
By its General Partner
BIOGEN, INC.
By: /s/ James L. Vincent
BIOGEN, INC.
By: /s/ Michael J. Astrue
BIOGEN, INC.
VOLUNTARY EXECUTIVE SUPPLEMENTAL SAVINGS PLAN
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . .
. . . 1
1.1 Purpose and Effective Date . . . . . . . . . . . . . . .
. . . 1
ARTICLE 2 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.1 Base salary. . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.2 Biogen . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.3 Board. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.4 Bonus. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.5 Committee. . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.6 Participant. . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.7 Plan . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.8 Savings Plan . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.9 Plan Year. . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
ARTICLE 3 PARTICIPATION. . . . . . . . . . . . . . . . . . . . . .
. . . 2
3.1 Eligibility and Participation. . . . . . . . . . . . . .
. . . 2
3.2 End of Participation . . . . . . . . . . . . . . . . . .
. . . 2
ARTICLE 4 SAVINGS DEPOSITS BY PARTICIPANTS; EMPLOYER CREDITS . . .
. . . 2
4.1 Savings Deposits.. . . . . . . . . . . . . . . . . . . .
. . . 2
4.2 Employer Credits.. . . . . . . . . . . . . . . . . . . .
. . . 3
ARTICLE 5 PARTICIPANTS' ACCOUNTS . . . . . . . . . . . . . . . . .
. . . 3
5.1 Participant Accounts . . . . . . . . . . . . . . . . . .
. . . 3
5.2 Vesting. . . . . . . . . . . . . . . . . . . . . . . . .
. . . 4
ARTICLE 6 DISTRIBUTIONS TO PARTICIPANT . . . . . . . . . . . . . .
. . . 4
6.1 Distributions for Financial Hardship . . . . . . . . . .
. . . 4
6.2 Distribution Upon Participant's Retirement . . . . . . .
. . . 4
6.3 Distribution Upon Death of a Participant . . . . . . . .
. . . 5
6.4 Distribution upon Participant's Other Termination of
Employment 5
6.5 Installment Distributions in Certain Cases . . . . . . .
. . . 5
ARTICLE 7 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . .
. . . 5
7.1 Amendment or Termination of Plan . . . . . . . . . . . .
. . . 5
7.2 Benefits Not Currently Funded. . . . . . . . . . . . . .
. . . 5
7.3 No Assignment. . . . . . . . . . . . . . . . . . . . . .
. . . 6
7.4 Responsibilities and Authority of Committee. . . . . . .
. . . 6
7.5 Limitation on Rights Created by Plan . . . . . . . . . .
. . . 6
7.6 Tax Withholding. . . . . . . . . . . . . . . . . . . . .
. . . 6
7.7 Text Controls. . . . . . . . . . . . . . . . . . . . . .
. . . 6
7.8 Applicable State Law . . . . . . . . . . . . . . . . . .
. . . 7
<PAGE>
ARTICLE 1
INTRODUCTION
1.1 Purpose and Effective Date. The purpose of this plan is
to provide certain designated key executives
of Biogen (or its subsidiaries) with additional tax-deferred
savings opportunities supplementing those available
under the Savings Plan. This plan allows participants whose
compensation exceeds the amount of compensation
that may be taken into account by the Savings Plan for any
plan year (the Code Section 401(a)(17) limits) to
make savings deposits hereunder from such excess compensation
with matching Biogen contributions on the
same basis as is provided in the Savings Plan, and allows
participants to make additional, unmatched savings
deposits from base salary or bonus if elected by a
participant. The effective date of this plan is April 18,
1994.
ARTICLE 2
DEFINITIONS
This section contains definitions of terms used in the plan.
Where the context so requires, the masculine
includes the feminine, the singular includes the plural, and
the plural includes the singular.
2.1 Base salary means the base salary established for any
participant by his employer as in effect from
time to time; the entire amount of a participant's base salary
will be taken into account in accordance with the
terms of this plan without regard to any dollar limitation on
applicable compensation that may be imposed under
the Savings Plan.
2.2 Biogen means Biogen, Inc., a Massachusetts corporation,
or any successor to all or the major portion
of its assets or business which assumes the obligations of
Biogen, Inc. under this plan.
2.3 Board means the Board of Directors of Biogen.
2.4 Bonus means the amount of compensation paid to a
participant in addition to his base salary and
designated as such participant's bonus by his employer; the
entire amount of any such bonus will be taken into
account in accordance with the terms of this plan without
regard to any dollar limitation on applicable
compensation that may be imposed under the Savings Plan.
2.5 Committee means the Savings Plan Committee constituted
under the Savings Plan.
2.6 Participant means an employee of Biogen (or a subsidiary)
who is eligible to participate in this plan in
accordance with Section 3.1 hereof and who has made a savings
deposit hereunder.
2.7 Plan means the Biogen, Inc. Voluntary Executive
Supplemental Savings Plan, as set forth in this plan
instrument, and as it may be amended from time to time.
2.8 Savings Plan means the Biogen Savings Plan, as amended
from time to time. Any term defined in the
Savings Plan will have the same meaning when used in this plan
unless otherwise defined herein.
2.9 Plan Year means the period commencing April 18, 1994 and
ending December 31, 1994, and the 12-
month periods commencing on January 1, 1995 and on each
subsequent January 1 while the plan remains in
effect.
ARTICLE 3
PARTICIPATION
3.1 Eligibility and Participation. A person (a) who is an
employee of Biogen (or a subsidiary) and (b)
who is designated by the committee will be eligible to be a
participant in this plan. His eligibility will be
effective as of the date specified by the committee. An
eligible employee will become a participant hereunder
when he makes a savings deposit to this plan. Participation
in this plan is voluntary and no eligible employee
will be required to participate.
3.2 End of Participation. A participant's participation in
this plan will end upon the termination of his
service as an employee of Biogen (or a subsidiary) because of
death, retirement, or any other reason.
In addition, a participant's participation will end upon
the committee's specifying that he is no longer
eligible to participate. In such event, his participation
will end effective as of the later of the date of the
committee's action or the date specified by the committee;
provided that no such action will retroactively
deprive a participant of any amount credited to his account or
any benefit he was entitled to under this plan
calculated as of the effective date of his termination of
participation.
Upon the termination of a participant's participation in
this plan in accordance with this section, the
participant may make no further savings deposits hereunder and
there will be no additional employer matching
credits to such participant's account. However, the
participant will be entitled to receive any vested amounts in
his accounts in accordance with this plan.
Notwithstanding the preceding provisions of this section,
if a participant's service as an employee of
Biogen (or a subsidiary) ends but he continues in the position
of Chairman of the Board of Directors of Biogen,
his participation in this plan will continue and he will be
eligible to continue making savings deposits hereunder
in accordance with the plan, and for this purpose his regular
remuneration as Chairman will be deemed to be his
base salary and any bonus he receives as Chairman will be
deemed to be his bonus. However, he will not be
eligible to receive any matching employer credits under
Section 4.2 based upon such savings deposits. He will
not be considered to have retired or terminated employment for
purposes of Section 6.2 or Section 6.4 until his
termination of service as Chairman.
ARTICLE 4
SAVINGS DEPOSITS BY PARTICIPANTS; EMPLOYER CREDITS
4.1 Savings Deposits.
(a) Savings Deposits. Each eligible employee may make
savings deposits to the plan from his base
salary in any whole percentage of his base salary from a
minimum of 1% to a maximum of 25% by agreeing to
reduce his base salary by such amount. In addition, each
eligible employee may make savings deposits to the
plan from his bonus in any whole percentage of his bonus from
a minimum of 1% to a maximum of 100% by
agreeing to reduce his bonus by such amount.
All amounts by which a participant reduces his base
salary or his bonus hereunder are referred to
herein as the participant's savings deposits. The amount by
which a participant's savings deposits for a plan
year hereunder do not exceed 6% of that portion of his
applicable compensation (as defined in the Savings Plan)
in excess of the Code Section 401(a)(17) limit applicable to
such plan year are referred to herein as his
matchable savings deposits; provided, however, that a
participant's matchable savings deposits for any plan year
will not exceed the limit on elective deferrals for such year
under Code Section 402(g)(1) and (5) reduced by his
basic savings deposits for such year under the Savings Plan.
(b) Sign-Up Procedure for Savings Deposits. An
eligible employee who wishes to make savings
deposits must complete an enrollment form specifying the
amount of his savings deposits (with separate
percentages for his base salary and bonus if desired),
agreeing to reduce his base salary and/or bonus by the
amount(s) desired, and providing such other information as the
committee may require. A participant's
enrollment form electing savings deposits for any plan year
must be filed with the committee at least two weeks
before the start of such plan year (or no later than April 15,
1994 in the case of the first plan year). A
participant may change the amount of his savings deposits by
filing a new enrollment form at least two weeks
before the start of any subsequent plan year, and the change
will become effective as of the first day of such
subsequent plan year. After a plan year has begun, a
participant may not change the amount of savings deposits
(if any) he had elected for such plan year. However, if a
participant has an unforeseeable financial hardship (as
defined in Section 6.1) during a year, the participant may
cancel his savings deposits election for the balance of
that year.
4.2 Employer Credits.
(a) Amount of Matching Employer Credits. For each
calendar quarter during a plan year, each
employer will credit a matching contribution amount to the
account of each participant employed by such
employer who makes matchable savings deposits during such
calendar quarter. The employer's matching
contribution credit will be equal to 25% of the participant's
matchable savings deposits during the calendar
quarter.
(b) Time for Making Employer Matching Credits. The
employers' matching amounts under
subsection (a) will be credited to participants' accounts as
soon as practicable after each calendar quarter.
ARTICLE 5
PARTICIPANTS' ACCOUNTS
5.1 Participant Accounts.
(a) Savings Deposits Accounts. Savings deposits by a
participant from his base salary or bonus
hereunder will be credited to an account in the name of such
participant. Such account will be called his
savings deposits account.
(b) Employer Matching Credits Accounts. Employer
credits on a participant's behalf under
Section 4.2(a) will be credited to an account in the name of
such participant. Such account will be called his
employer matching credits account.
(c) Participant's Account Value. A participant's
accounts will be credited with deemed investment
results as if participant savings deposits and employer
matching credits on a participant's behalf were invested in
one or more designated mutual funds and all dividends and
distributions on shares of a particular mutual fund
were reinvested in shares of such fund. The mutual funds
available for this purpose will be those from time to
time available as investment options for participants'
accounts under the Savings Plan (other than the Biogen
stock fund).
Each participant will indicate with his initial
enrollment form the mutual fund or funds (and the
proportion in each fund when the participant designates more
than one) he wishes to designate for this purpose.
Thereafter, a participant may change his designation either
with respect to the deemed investment of future
savings deposits and matching credits or the deemed transfer
of amounts from a previously designated mutual
fund to another fund; such a change must be filed with the
committee at least two weeks before the start of a
plan year and will be effective starting with the first day of
such year. Such designation will remain in effect
until subsequently changed by the participant in accordance
with this paragraph.
Deemed investment results under this subsection will be
credited to a participant's accounts effective as
of the last day in each calendar quarter.
The value of a participant's accounts at any point in
time will be his savings deposits and employer
matching credits on his behalf, increased or decreased by
deemed investment results as provided in this
subsection (c) through the most recent calendar quarter, and
reduced by any distributions from the participant's
accounts.
(d) Bookkeeping Accounts. Participants' accounts
(including savings deposits accounts and employer
matching credits accounts) will be maintained on the books of
the participant's employer for bookkeeping
purposes only; such accounts will not represent any interest
in any trust or in any segregated asset.
5.2 Vesting.
(a) Savings Deposits Account. A participant will have
a fully vested interest in his savings deposits
account at all times.
(b) Employer Matching Credits Account. A participant
will have a vested interest in his employer
matching credits account that is the same as his vested
interest in his matching contributions account under the
Savings Plan (if a participant hereunder is not a participant
in the Savings Plan, his vested interest in his
employer matching credits account will be equal to the vested
percentage he would have under the Savings Plan
in his matching contributions account if he were a
participant). Upon a participant's termination of
employment, any nonvested portion of his employer matching
credits account will be forfeited.
ARTICLE 6
DISTRIBUTIONS TO PARTICIPANT
6.1 Distributions for Financial Hardship. If a participant
has a serious financial hardship, he may apply
to the committee for a distribution from the plan prior to his
retirement or other termination of service with his
employer. If such application for a hardship distribution is
approved by the committee, the distribution will be
made as soon as possible after the later of the date specified
in the participant's application or the date of
approval by the committee. The amount of the distribution
will be the amount needed to alleviate the
participant's financial hardship, as determined by the
committee, up to a maximum of the participant's vested
account balances. Such a distribution will be made from the
participant's accounts in a single lump-sum
payment.
Financial hardship will be limited to the following:
bankruptcy or impending bankruptcy, unexpected
and unreimbursed major expenses resulting from illness to
person or accident to person or property, and to
other types of unforeseeable and unreimbursed expenses of a
major nature that normally would not be
budgetable. Financial hardship shall not include foreseeable
expenses such as down payments on a home or
purchase of an auto or college or other educational expenses.
6.2 Distribution Upon Participant's Retirement. Upon
retirement from his employer, the participant will
receive a single sum payment equal to his account balances,
payable as soon as practicable after the end of the
calendar quarter in which his date of retirement occurred.
6.3 Distribution Upon Death of a Participant.
(a) In general. If a participant dies while still an
employee of Biogen (or a subsidiary), his
beneficiary will receive the amount in the participant's
accounts. If a participant dies after termination of
employment with Biogen (or a subsidiary) but before the
complete distribution of his vested accounts hereunder,
his beneficiary will receive the total vested amount remaining
in his accounts. Distribution will be made in a
single sum payment as soon as practicable after the end of the
calendar quarter in which the committee receives
such evidence of the participant's death and of the right of
any beneficiary to receive payment as it deems
necessary.
(b) Beneficiary. The beneficiary to receive the
payment described in subsection (a) above will be the
same person or persons who are to receive benefits payable
upon the participant's death under the Savings Plan.
If more than one person is a beneficiary, death benefits
hereunder will be paid to them in the same proportions
as under the Savings Plan.
6.4 Distribution upon Participant's Other Termination of
Employment. Upon a participant's
termination of employment for any reason other than retirement
or death, the participant will receive a single
sum payment equal to his vested account balances as soon as
practicable after the end of the calendar quarter in
which the participant's termination of employment occurs.
6.5 Installment Distributions in Certain Cases.
Notwithstanding the provisions of Sections 6.2, 6.3 and
6.4, a participant may, at the time of filing an enrollment
form under Section 4.1(b), designate that the amount
payable to him (or to his beneficiary in the event of his
death) hereunder will be paid in either 3, 5 or 10 annual
installment payments, as specified by the participant. In
addition, with the consent of the committee, a
participant may subsequently change the form of payment to his
beneficiary (but not the form of payment to
himself under Section 6.2 or 6.4) by filing a written
instrument with the committee designating the new form of
payment to the beneficiary. Where this section is applicable,
the first annual installment payment will be paid
on the date on specified in Section 6.2, 6.3 or 6.4 (whichever
is applicable) and subsequent annual installments
will be paid on succeeding anniversaries of the first payment
date. The amount of each annual installment
payment will be determined by multiplying the vested amount in
the participant's accounts by a fraction whose
numerator is one and whose denominator is the number of
remaining annual installment payments.
ARTICLE 7
MISCELLANEOUS
7.1 Amendment or Termination of Plan. Biogen, by action of
the Board (or such committee thereof or
officer or officers of Biogen to whom the Board has delegated
this authority), at any time and from time to
time, may amend or modify any or all of the provisions of this
plan or may terminate this plan without the
consent of any participant (or beneficiary or other person
claiming through a participant). No termination or
amendment of the plan may reduce the amounts credited to the
accounts of any participant under the plan
(including a participant whose employment with the employer
was terminated before such termination or
amendment). However, Biogen may change the deemed investment
options under Section 5.1(c), and Biogen
may upon termination of this plan pay participants' vested
account balances to the participants regardless of
whether such participants have retired or terminated
employment and may pay such amounts in single sum
payments regardless of whether participants have elected
installment distributions under Section 6.5.
7.2 Benefits Not Currently Funded.
(a) Nothing in this plan will be construed to create
a trust or to obligate Biogen to segregate a fund,
purchase an insurance contract or other investment, or in any
other way currently to fund the future payment of
any benefits hereunder, nor will anything herein be construed
to give any participant or any other person rights
to any specific assets of Biogen or any other entity.
However, in order to make provision for its obligations
hereunder, Biogen may in its discretion purchase an insurance
contract or other investment; any such contract or
investment will be a general asset belonging to Biogen, and no
participant or beneficiary will have any rights to
any such asset. The rights of a participant or beneficiary
hereunder will be solely those of a general, unsecured
creditor of his employer.
(b) Notwithstanding subsection (a) above, Biogen in
its sole discretion may establish a grantor trust of
which it is treated as the owner under Code Section 671 to
provide for the payment of benefits hereunder,
subject to such terms and conditions as Biogen may deem
necessary or advisable to ensure that benefits are not
includable, by reason of the trust, in the taxable income of
trust beneficiaries before actual distribution and that
the existence of the trust does not cause the plan or any
other arrangement to be considered funded for purposes
of Title I of ERISA.
7.3 No Assignment. No participant or beneficiary will have
any power or right to transfer, assign,
anticipate or otherwise encumber any benefit or amount payable
under this plan, nor shall any such benefit or
amount payable be subject to seizure or attachment by any
creditor of a participant or a beneficiary, or to any
other legal, equitable or other process, or be liable for, or
subject to, the debts, liabilities or other obligations of
a participant or beneficiary except as otherwise required by
law.
7.4 Responsibilities and Authority of Committee. The
committee will control and manage the operation
and administration of the plan except to the extent that such
responsibilities are specifically assigned hereunder
to Biogen or the Board.
The committee will have all powers and authority
necessary or appropriate to carry out its
responsibilities for the operation and administration of the
plan. It will interpret and apply all plan provisions
and may correct any defect, supply any omission or reconcile
any inconsistency or ambiguity in such manner as
it deems advisable. It will make all final determinations
concerning eligibility, benefits and rights hereunder,
and all other matters concerning plan administration and
interpretation. All determinations and actions of the
committee will be conclusive and binding upon all persons,
except as otherwise provided herein or by law, and
except that the committee may revoke or modify a determination
or action previously made in error. Any
action or inaction by the committee will be reviewable (by a
court or otherwise) only for an abuse of discretion.
Biogen will be the "plan administrator" and the "named
fiduciary" for purposes of the Employee
Retirement Income Security Act of 1974, as amended.
7.5 Limitation on Rights Created by Plan. Nothing appearing
in the plan will be construed (a) to give
any person any benefit, right or interest except as expressly
provided herein, or (b) to create a contract of
employment or to give any employee the right to continue as an
employee or to affect or modify his terms of
employment in any way.
7.6 Tax Withholding. Any payment hereunder to a participant
or beneficiary will be subject to
withholding of income and other taxes to the extent required
by law.
7.7 Text Controls. Headings and titles are for convenience
only, and the text will control in all matters.
7.8 Applicable State Law. To the extent that state law
applies, the provisions of the plan will be
construed, enforced and administered according to the laws of
the Commonwealth of Massachusetts.
BIOGEN, INC.
By:
391899.1
BIOGEN INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide certain key
executives of Biogen (or its subsidiaries) with additional
retirement income by supplementing the retirement benefits
provided under the Biogen Retirement Plan. In addition, this
plan provides benefits to participants whose benefit under the
Biogen Retirement Plan is affected by Internal Revenue Code
limits on the amount of compensation that may be taken into
account by the Retirement Plan for any plan year (Code Section
401(a)(17)) or on the amount of benefits that may be provided
from the Retirement Plan (Code Section 415). The effective date
of this plan is January 1, 1991.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan.
Where the context so requires, the masculine includes the
feminine, the singular includes the plural, and the plural
includes the singular.
2.1 Applicable compensation has the same meaning as in the
Retirement Plan, without regard, however, to any dollar
limitation on applicable compensation that may be imposed under
the Retirement Plan.
2.2 Biogen means Biogen, Inc., a Massachusetts corporation,
or any successor to all or the major portion of its assets or
business which assumes the obligations of Biogen, Inc. under this
plan.
2.3 Board means the Board of Directors of Biogen.
2.4 Committee means the Retirement Plan committee
constituted under the Retirement Plan.
2.5 Participant means an employee of Biogen (or a
subsidiary) who has been designated a participant in this plan in
accordance with Section 3 hereof.
2.6 Plan means the Biogen, Inc. Supplemental Executive
Retirement Plan, as set forth in this plan instrument, and as it
may be amended from time to time.
2.7 Retirement Plan means the Biogen Retirement Plan, as
amended from time to time. Any term defined in the Biogen
Retirement Plan will have the same meaning when used in this plan
unless otherwise defined herein.
SECTION 3. PARTICIPATION
3.1 Participation in Supplemental Pension Formula. Each
person listed on Appendix A is a participant in the supplemental
pension formula under Section 4.1 as of January 1, 1991.
3.2 Participation in Excess Benefit Formulas.
(a) Each participant in the Retirement Plan (other
than a person listed on Appendix A) whose applicable
compensation for any plan year exceeds the dollar limitation
on applicable compensation imposed under Code Section
401(a)(17) for such plan year will be a participant in the
excess benefit formula under Section 4.2(a).
(b) Each participant in the Retirement Plan (other
than a person listed on Appendix A) whose benefit under the
Retirement Plan is reduced upon his retirement or other
termination of employment by the limitations imposed under
Code Section 415 will be a participant in the excess benefit
formula under Section 4.2(b).
3.3 End of Participation. An employee's participation in
this plan will end when his participation in the Retirement Plan
ends.
SECTION 4. BENEFIT FORMULAS
4.1 Supplemental Pension Formula. For each plan year
during the existence of this plan, a participant in the
supplemental pension formula will be credited with a supplemental
pension amount equal to 1-% of his applicable compensation during
such year up to the Social Security taxable wage base for such
year (prorated for any partial year of employment as an employee
of Biogen (or a U.S. subsidiary)), plus 2-% of his applicable
compensation during such year above the Social Security taxable
wage base for such year (as so prorated). In addition, a
participant will be credited with a supplemental pension amount
in accordance with the preceding sentence for 1989 and 1990.
A participant's accrued supplemental pension hereunder as of
any date of reference will be the sum of the supplemental pension
amounts he is credited with under the preceding paragraph,
reduced (but not below zero) by the participant's accrued
retirement benefit amount as of such date under the Retirement
Plan.
4.2 Excess Benefit Formulas.
(a) A participant's benefit under this subsection (a)
will be the excess he would have earned under the accrued
benefit formula in Section 5.1(a) of the Retirement Plan if
his applicable compensation taken into account had never
been limited under Code Section 401(a)(17), over his actual
accrued benefit under the Retirement Plan.
(b) If the full amount of a participant's benefit
under the Retirement Plan benefit formula cannot be paid to
him because of the limitations on benefits imposed under
Code Section 415 (as specified in Sections 11.1 to 11.3 of
the Retirement Plan), the amount that cannot be paid under
the Retirement Plan will be paid as an excess benefit under
this Section 4.2(b).
(c) A participant's accrued excess benefit hereunder
as of his date of retirement or other termination of
employment will be the sum of his excess benefit under
subsection (a) above (if any), plus his excess benefit
amount under subsection (b) above (if any).
4.3 Vested Interest. A participant who terminates
employment before his normal retirement date will have the same
vested percentage in his supplemental pension benefit or excess
benefit under this plan that he has in his accrued benefit under
the Retirement Plan.
4.4 Effect of Money Purchase Account. If a participant has
a money purchase account under the Retirement Plan and if his
accrued benefit under the Retirement Plan has been reduced to
zero under Section 10.3 of the Retirement Plan, his accrued
supplemental pension or his excess benefit hereunder will be
reduced by the monthly benefit that can be provided by the
portion of his money purchase account that was not used to reduce
his Retirement Plan benefit. Such reductions hereunder will be
performed in the manner described in Section 10.3 of the
Retirement Plan.
SECTION 5. PROVISIONS ON PAYMENT OF BENEFITS.
5.1 Supplemental Pension and Excess Benefits. Supplemental
pension benefit amounts or excess benefit amounts as calculated
under the formulas in Sections 4.1 and 4.2 above are payable as
an annual pension beginning on the participant's normal
retirement date in the form of an annuity for the life of the
participant only. If a participant's supplemental pension
benefits or excess benefits hereunder are actually paid beginning
on an earlier date or in a different form in accordance with
Section 5.2, the amount will be adjusted as provided in Section
5.2.
5.2 Form and Time of Benefit Payments. A participant's
vested supplemental pension benefit or excess benefit under
Section 4.1 or Section 4.2 will actually be paid in the same form
and beginning on the same date that his benefit under the
Retirement Plan is payable. If the participant's supplemental
pension benefit or excess benefit is payable in any form other
than a life annuity, the actuarial factors used to convert his
supplemental pension benefit or excess benefit amount from a life
annuity to such other form of payment will be the same as the
factors used for such purpose in the Retirement Plan. If the
participant's supplemental pension benefit or excess benefit is
payable starting before his normal retirement date, his benefit
will be reduced by 5/9ths of 1% per month for each of the first
60 months, and by 5/18ths of 1% per month for each additional
month, that the start of payments precedes his normal retirement
date.
Annuity benefits hereunder will be paid monthly with each
payment equal to 1/12 of the annual benefit amount under the
annuity.
SECTION 6. DEATH BENEFITS
6.1 Application of this Section. This section specifies
the benefits payable upon the death of a participant, either
before or after the date his benefit payments hereunder begin.
Except as specified in this section, no benefits are payable upon
the death of a participant.
6.2 Surviving Spouse's Benefit.
(a) Eligibility. If a participant in this plan dies
and he is survived by his spouse, his spouse will receive
the surviving spouse's benefit under this section if (i) the
participant dies after the date when he has a vested
interest hereunder but before the date when his benefit
payments begin, and (ii) the participant and the spouse were
married for at least the one year period before the date of
the participant's death.
(b) Payment. The surviving spouse's benefit is a
monthly pension for the spouse's lifetime with payments
beginning on the same date that payments of the Retirement
Plan's preretirement surviving spouse's benefit under
Section 8.2 of the Retirement Plan begin. Payments will end
with the payment immediately before the death of the spouse.
(c) Amount. The amount of each monthly payment to the
spouse will be one-half of the amount the participant would
have received on the payment starting date (had he survived
to such date) under the automatic joint and 50 percent
surviving spouse annuity form of payment (described in
Section 6.4 of the Retirement Plan), based upon his vested
accrued supplemental pension benefit or excess benefit as of
the earlier of his date of death or his date of retirement
or other termination of employment, with actuarial reduction
or adjustment for conversion to such form of payment and, if
applicable, for payments starting before the participant's
normal retirement date.
(d) If the preretirement surviving spouse's benefit
under the Retirement Plan is payable as a commuted single
sum payment, the surviving spouse's benefit under this
section will also be paid as a commuted single sum payment.
Conversion to such single sum payment will be made using the
same actuarial factors used for such purpose under the
Retirement Plan.
(e) Effect of Money Purchase Account. If the deceased
participant had a money purchase account under the
Retirement Plan and if the preretirement surviving spouse's
benefit under the Retirement Plan has been reduced to zero
under Section 10.4 of the Retirement Plan, the preretirement
surviving spouse's benefit hereunder will be reduced by the
monthly benefit that can be provided by the portion of the
participant's money purchase account that was not used to
reduce the Retirement Plan preretirement surviving spouse's
benefit. Such reductions hereunder will be performed in the
manner described in Section 10.4 of the Retirement Plan.
6.3 Death After Benefit Payments Begin. If a participant
dies while receiving benefit payments hereunder, his surviving
spouse, contingent annuitant or beneficiary will receive the
benefit, if any, payable under the form of payment in effect for
such participant.
SECTION 7. DISABILITY
7.1 A participant who suffers a total and permanent
disability for purposes of the Retirement Plan will continue to
participate in this plan during his period of covered disability
(as defined in the Retirement Plan). Such a participant will
continue to accrue supplemental pension benefits or excess
benefits under this plan in accordance with the applicable
provisions of Section 4 as if such participant had continued to
be an active employee of Biogen (or a subsidiary) during his
period of covered disability and as if he had continued receiving
applicable compensation during his period of covered disability
at the same rate as his rate of applicable compensation in effect
immediately before the onset of his disability and the Social
Security taxable wage base had remained at the same level as in
effect for the year when his disability began. The accrual of
additional supplemental pension benefits or excess benefits under
the preceding sentence will end when his period of covered
disability ends in accordance with the terms of the Retirement
Plan.
7.2 If a participant dies while disabled, his surviving
spouse, if eligible, will receive the pre-retirement surviving
spouse benefit determined under Section 6.2.
7.3 A participant may not receive benefits under this plan
at any time when he is receiving disability income benefits under
any long-term disability income plan maintained by Biogen.
SECTION 8. BENEFITS NOT CURRENTLY FUNDED
8.1 Nothing in this plan will be construed to create a
trust or to obligate Biogen (or any subsidiary) to segregate a
fund, purchase an insurance contract, or in any other way
currently to fund the future payment of any benefits hereunder,
nor will anything herein be construed to give any participant or
any other person rights to any specific assets of Biogen or of
any other employer or entity.
8.2 Notwithstanding Section 8.1, Biogen in its sole
discretion may establish a trust of which it is treated as the
owner under Section 671 of the Internal Revenue Code (a "grantor
trust") to provide for the payment of benefits hereunder, subject
to such terms and conditions as Biogen may deem necessary or
advisable to ensure that benefits are not includable, by reason
of the trust, in income of trust beneficiaries before actual
distribution and that the existence of the trust does not cause
the plan or any other arrangement to be considered funded for
purposes of Title I of the Employee Retirement Income Security
Act of 1974, as amended.
SECTION 9. ADMINISTRATION
The plan will be administered by the committee, which will
have full power and authority to construe, interpret and
administer the plan. Decisions of the committee will be final
and binding on all persons. The committee in its discretion may
adopt, amend, and rescind rules and regulations relating to the
administration of the plan.
SECTION 10. RIGHTS NON-ASSIGNABLE
No participant, surviving spouse, or any other person will
have any right to assign or otherwise to alienate the right to
receive payments under the plan, in whole or in part.
SECTION 11. AMENDMENT OR TERMINATION
Biogen reserves the right at any time by action of the board
to terminate this plan or to amend its provisions in any way. In
addition, if the Retirement Plan is terminated, this plan will
automatically terminate also as of the same effective date.
Notwithstanding the foregoing, no termination or amendment of the
plan may reduce the benefits payable under the plan to any person
with respect to a participant whose employment with Biogen (or a
subsidiary) was terminated before such termination or amendment,
and no termination or amendment may reduce the benefits to be
paid with respect to a participant on the date of such
termination or amendment below the amount which such participant
would have received if his employment had terminated on the date
before such termination or amendment.
Executed as of , 1991.
BIOGEN, INC.
By:
16742.1<PAGE>
APPENDIX A
List of Participants in the Supplemental Pension Formula
The following employees are participants in the supplemental
pension formula under Section 4.1, effective as of January 1,
1991:
Frank A. Burke, Jr.
John W. Catterall
Adrian F. Dawson, M.D.
Frederic A. Eustis, III
James Mullen
Vicki L. Sato, Ph.D.
Michael R. Slater
Alan W. Tuck
James L. Vincent
16742.1
BIOGEN, INC.
VOLUNTARY BOARD OF DIRECTORS SAVINGS PLAN
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . .
. . . 1
1.1 Purpose and Effective Date . . . . . . . . . . . . . . .
. . . 1
ARTICLE 2 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.1 Biogen . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.2 Board. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.3 Committee. . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.4 Director . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.6 Participant. . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.7 Plan . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.8 Retainer . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.9 Savings Plan . . . . . . . . . . . . . . . . . . . . . .
. . . 1
2.10 Plan Year. . . . . . . . . . . . . . . . . . . . . . . .
. . . 1
ARTICLE 3 PARTICIPATION. . . . . . . . . . . . . . . . . . . . . .
. . . 1
3.1 Eligibility and Participation. . . . . . . . . . . . . .
. . . 1
3.2 End of Participation . . . . . . . . . . . . . . . . . .
. . . 2
ARTICLE 4 SAVINGS DEPOSITS BY PARTICIPANTS; EMPLOYER CREDITS . . .
. . . 2
4.1 Savings Deposits.. . . . . . . . . . . . . . . . . . . .
. . . 2
ARTICLE 5 PARTICIPANTS' ACCOUNTS . . . . . . . . . . . . . . . . .
. . . 3
5.1 Participant Accounts . . . . . . . . . . . . . . . . . .
. . . 3
5.2 Vesting. . . . . . . . . . . . . . . . . . . . . . . . .
. . . 3
ARTICLE 6 DISTRIBUTIONS TO PARTICIPANT . . . . . . . . . . . . . .
. . . 3
6.1 Distributions for Financial Hardship . . . . . . . . . .
. . . 3
6.2 Distribution Upon Death of a Participant . . . . . . . .
. . . 4
6.3 Other Distributions. . . . . . . . . . . . . . . . . . .
. . . 4
6.4 Installment Distributions in Certain Cases . . . . . . .
. . . 4
ARTICLE 7 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . .
. . . 5
7.1 Amendment or Termination of Plan . . . . . . . . . . . .
. . . 5
7.2 Benefits Not Currently Funded. . . . . . . . . . . . . .
. . . 5
7.3 No Assignment. . . . . . . . . . . . . . . . . . . . . .
. . . 5
7.4 Responsibilities and Authority of Committee. . . . . . .
. . . 5
7.5 Limitation on Rights Created by Plan . . . . . . . . . .
. . . 6
7.6 Tax Withholding. . . . . . . . . . . . . . . . . . . . .
. . . 6
7.7 Text Controls. . . . . . . . . . . . . . . . . . . . . .
. . . 6
7.8 Applicable State Law . . . . . . . . . . . . . . . . . .
. . . 6
<PAGE>
ARTICLE 1
INTRODUCTION
1.1 Purpose and Effective Date. The purpose of this plan is to
provide members of the Board of
Directors of Biogen with a tax-deferred savings opportunity. This
plan allows participants to defer all or a
portion of their directors' fees and retainer by so electing before
such fees and retainer have been earned. The
effective date of this plan is October 1, 1994.
ARTICLE 2
DEFINITIONS
This section contains definitions of terms used in the plan.
Where the context so requires, the masculine
includes the feminine, the singular includes the plural, and the
plural includes the singular.
2.1 Biogen means Biogen, Inc., a Massachusetts corporation, or any
successor to all or the major portion
of its assets or business which assumes the obligations of Biogen,
Inc. under this plan.
2.2 Board means the Board of Directors of Biogen.
2.3 Committee means the Savings Plan Committee constituted under
the Savings Plan.
2.4 Director means an individual serving as a director of Biogen
in accordance with its articles and by-
laws.
2.5 Fees means the amounts payable to a director as compensation
for his or her attendance at a meeting of
the Board or a committee of the Board.
2.6 Participant means a director who has made a savings deposit
hereunder.
2.7 Plan means the Biogen, Inc. Voluntary Board of Directors
Savings Plan, as set forth in this plan
instrument, and as it may be amended from time to time.
2.8 Retainer means the amount payable to a director as an annual
retainer for service in such capacity, as
in effect from time to time.
2.9 Savings Plan means the Biogen Savings Plan, as amended from
time to time. Any term defined in the
Savings Plan will have the same meaning when used in this plan
unless otherwise defined herein.
2.10 Plan Year means the period commencing October 1, 1994 and
ending December 31, 1994, and the 12-
month periods commencing on January 1, 1995 and on each subsequent
January 1 while the plan remains in
effect.
ARTICLE 3
PARTICIPATION
3.1 Eligibility and Participation. Each director will be eligible
to be a participant in this plan as long as
he is a director. However, a director who is also an employee of
Biogen (or a subsidiary) will not be eligible
to participate in this plan unless he receives fees and/or retainer
separate and apart from his compensation as an
employee, and in such event he will be eligible to participate in
this plan only with respect to such fees and
retainer. A director will become a participant hereunder when he
makes a savings deposit to this plan.
Participation in this plan is voluntary and no director will be
required to participate.
3.2 End of Participation. A participant's participation in this
plan will end upon the termination of his
service as a director of Biogen because of death, retirement,
resignation, failure of reelection, or any other
reason.
Upon the termination of a participant's participation in this
plan in accordance with this section, the
participant may make no further savings deposits hereunder.
However, the participant will be entitled to receive
any amounts in his accounts in accordance with this plan.
ARTICLE 4
SAVINGS DEPOSITS BY PARTICIPANTS; EMPLOYER CREDITS
4.1 Savings Deposits.
(a) Savings Deposits. Each director may make savings
deposits to the plan from his fees and retainer
in any whole percentage of such fees and/or such retainer, from a
minimum of 1% to a maximum of 100%, by
agreeing to reduce his fees and/or retainer by such amount in
accordance with this plan.
All amounts by which a participant reduces his fees and/or
retainer hereunder are referred to herein as
the participant's savings deposits.
(b) Sign-Up Procedure for Savings Deposits. A director who
wishes to make savings deposits must
complete an enrollment form specifying the amount of his savings
deposits (with separate percentages for his
fees and retainer if desired), agreeing to reduce his fees and/or
retainer by the amount(s) desired, and providing
such other information as the committee may require. A
participant's enrollment form electing savings deposits
for any plan year must be filed with the committee at least two
weeks before the start of such plan year. A
participant may change the amount of his savings deposits by filing
a new enrollment form at least two weeks
before the start of any subsequent plan year, and the change will
become effective as of the first day of such
subsequent plan year. After a plan year has begun, a participant
may not change the amount of savings deposits
(if any) he had elected for such plan year. However, if a
participant has an unforeseeable financial hardship (as
defined in Section 6.1) during a year, the participant may cancel
his savings deposits election for the balance of
that year.
ARTICLE 5
PARTICIPANTS' ACCOUNTS
5.1 Participant Accounts.
(a) Savings Deposits Accounts. Savings deposits by a
participant from his fees or retainer hereunder
will be credited to an account in the name of such participant.
Such account will be called his savings deposits
account.
(b) Participant's Account Value. A participant's account
will be credited with deemed investment
results as if his savings deposits were invested in one or more
designated mutual funds and all dividends and
distributions on shares of a particular mutual fund were reinvested
in shares of such fund. The mutual funds
available for this purpose will be those from time to time
available as investment options under the Savings Plan
(other than the Biogen stock fund).
Each participant will indicate with his initial enrollment
form the mutual fund or funds (and the
proportion in each fund when the participant designates more than
one) he wishes to designate for this purpose.
Thereafter, a participant may change his designation either with
respect to the deemed investment of future
savings deposits or the deemed transfer of amounts from a
previously designated mutual fund to another fund;
such a change must be filed with the committee at least two weeks
before the start of a plan year and will be
effective starting with the first day of such year. Such
designation will remain in effect until subsequently
changed by the participant in accordance with this paragraph.
Deemed investment results under this subsection will be
credited to a participant's account effective as
of the last day in each calendar quarter.
The value of a participant's account at any point in time will
be his savings deposits, increased or
decreased by deemed investment results as provided in this
subsection (b) through the end of the most recently
completed calendar quarter, and reduced by any distributions from
the participant's account.
(c) Bookkeeping Accounts. Participants' accounts will be
maintained on Biogen's books for
bookkeeping purposes only; such accounts will not represent any
interest in any trust or in any segregated asset.
5.2 Vesting. A participant will have a fully vested interest in
his savings deposits account at all times.
ARTICLE 6
DISTRIBUTIONS TO PARTICIPANT
6.1 Distributions for Financial Hardship. If a participant has a
serious financial hardship, he may apply
to the committee for a distribution from the plan prior to his
retirement or other termination of service as a
director. If such application for a hardship distribution is
approved by the committee, the distribution will be
made as soon as possible after the later of the date specified in
the participant's application or the date of
approval by the committee. The amount of the distribution will be
the amount needed to alleviate the
participant's financial hardship, as determined by the committee,
up to a maximum of the participant's account
balance. Such a distribution will be made from the participant's
account in a single lump-sum payment.
Financial hardship will be limited to the following:
bankruptcy or impending bankruptcy, unexpected
and unreimbursed major expenses resulting from illness to person or
accident to person or property, and to
other types of unforeseeable and unreimbursed expenses of a major
nature that normally would not be
budgetable. Financial hardship shall not include foreseeable
expenses such as down payments on a home or
purchase of an auto or college or other educational expenses.
6.2 Distribution Upon Death of a Participant.
(a) In general. If a participant dies before his entire
account balance has been distributed, his
beneficiary will receive the amount in the participant's account.
Distribution will be made in a single sum
payment as soon as practicable after the end of the calendar
quarter in which the committee receives such
evidence of the participant's death and of the right of any
beneficiary to receive payment as it deems necessary.
(b) Beneficiary. A participant may designate one or more
beneficiaries to receive a distribution
payable under subsection (a) above and may revoke or change such a
designation at any time. If the participant
names two or more beneficiaries, distribution to them will be in
such proportions as the participant designates
or, if the participant does not so designate, in equal shares. Any
designation of beneficiary will be in writing
on such form as the committee may prescribe or deem acceptable, and
will be effective upon filing with the
committee.
Any portion of a distribution payable upon the death of a
participant that is not disposed of by a
designation of beneficiary under the preceding paragraph, for any
reason whatsoever, will be paid to the
participant's spouse if living at his death, otherwise equally to
the participant's natural and adopted children (and
the issue of a deceased child by right of representation),
otherwise to the participant's estate.
The committee may direct payment in accordance with a prior
designation of beneficiary (and will be
fully protected in so doing) if such direction (i) is given before
a later designation is received, or (ii) is due to
the committee's inability to verify the authenticity of a later
designation. Such a distribution will discharge all
liability therefor under the plan.
6.3 Other Distributions. Except in the case of the participant's
death (in which case distribution is made
in accordance with Section 6.3), distribution of a participant's
account will be made following the latest of the
participant's termination of service as a director, the
participant's termination of employment (if the participant
is an employee of Biogen or a subsidiary in addition to being a
director) or the participant's 55th birthday.
Distribution will be made in a single sum payment as soon as
practicable after the end of the calendar quarter in
which the event causing distribution occurs.
6.4 Installment Distributions in Certain Cases. Notwithstanding
the provisions of Sections 6.2 and 6.3,
a participant may, at the time of filing his original enrollment
form under Section 4.1(b), designate that the
amount payable to him (or to his beneficiary in the event of his
death) hereunder will be paid in either 3, 5 or
10 annual installment payments, as specified by the participant.
In addition, with the consent of the committee,
a participant may subsequently change the form of payment to his
beneficiary (but not the form of payment to
himself under Section 6.3) by filing a written instrument with the
committee designating the new form of
payment to the beneficiary. Where this section is applicable, the
first annual installment payment will be paid
on the date specified in Section 6.2 or 6.3 (whichever is
applicable) and subsequent annual installments will be
paid on succeeding anniversaries of the first payment date. The
amount of each annual installment payment will
be determined by multiplying the amount in the participant's
account by a fraction whose numerator is one and
whose denominator is the number of remaining annual installment
payments.
ARTICLE 7
MISCELLANEOUS
7.1 Amendment or Termination of Plan. Biogen, by action of the
Board (or such committee thereof or
officer or officers of Biogen to whom the Board has delegated this
authority), at any time and from time to
time, may amend or modify any or all of the provisions of this plan
or may terminate this plan without the
consent of any participant (or beneficiary or other person claiming
through a participant). No termination or
amendment of the plan may reduce the amount credited to the account
of any participant under the plan
(including a participant whose service as a director terminated
before such plan termination or amendment).
However, Biogen may change the deemed investment options under
Section 5.1(c), and Biogen may upon
termination of this plan pay participants' account balances to the
participants regardless of whether such
participants have terminated service as a director and may pay such
amounts in single sum payments regardless
of whether participants have elected installment distributions
under Section 6.4.
7.2 Benefits Not Currently Funded.
(a) Nothing in this plan will be construed to create a
trust or to obligate Biogen to segregate a fund,
purchase an insurance contract or other investment, or in any other
way currently to fund the future payment of
any benefits hereunder, nor will anything herein be construed to
give any participant or any other person rights
to any specific assets of Biogen or any other entity. However, in
order to make provision for its obligations
hereunder, Biogen may in its discretion purchase an insurance
contract or other investment; any such contract or
investment will be a general asset belonging to Biogen, and no
participant or beneficiary will have any rights to
any such asset. The rights of a participant or beneficiary
hereunder will be solely those of a general, unsecured
creditor of Biogen.
(b) Notwithstanding subsection (a) above, Biogen in its
sole discretion may establish a grantor trust of
which it is treated as the owner under Code Section 671 to provide
for the payment of benefits hereunder,
subject to such terms and conditions as Biogen may deem necessary
or advisable to ensure that benefits are not
includable, by reason of the trust, in the taxable income of trust
beneficiaries before actual distribution and that
the existence of the trust does not cause the plan or any other
arrangement to be considered funded for purposes
of Title I of ERISA.
7.3 No Assignment. No participant or beneficiary will have any
power or right to transfer, assign,
anticipate or otherwise encumber any benefit or amount payable
under this plan, nor shall any such benefit or
amount payable be subject to seizure or attachment by any creditor
of a participant or a beneficiary, or to any
other legal, equitable or other process, or be liable for, or
subject to, the debts, liabilities or other obligations of
a participant or beneficiary except as otherwise required by law.
7.4 Responsibilities and Authority of Committee. The committee
will control and manage the operation
and administration of the plan except to the extent that such
responsibilities are specifically assigned hereunder
to Biogen or the Board.
The committee will have all powers and authority necessary or
appropriate to carry out its
responsibilities for the operation and administration of the plan.
It will interpret and apply all plan provisions
and may correct any defect, supply any omission or reconcile any
inconsistency or ambiguity in such manner as
it deems advisable. It will make all final determinations
concerning eligibility, benefits and rights hereunder,
and all other matters concerning plan administration and
interpretation. All determinations and actions of the
committee will be conclusive and binding upon all persons, except
as otherwise provided herein or by law, and
except that the committee may revoke or modify a determination or
action previously made in error. Any
action or inaction by the committee will be reviewable (by a court
or otherwise) only for an abuse of discretion.
Biogen will be the "plan administrator" and the "named
fiduciary" for purposes of the Employee
Retirement Income Security Act of 1974, as amended.
7.5 Limitation on Rights Created by Plan. Nothing appearing in
the plan will be construed (a) to give
any person any benefit, right or interest except as expressly
provided herein, or (b) to create a contract of
employment or to give any director the right to continue in such
capacity or to affect or modify the terms of his
service as a director in any way.
7.6 Tax Withholding. Any payment hereunder to a participant or
beneficiary will be subject to
withholding of income and other taxes to the extent required by
law.
7.7 Text Controls. Headings and titles are for convenience only,
and the text will control in all matters.
7.8 Applicable State Law. To the extent that state law applies,
the provisions of the plan will be
construed, enforced and administered according to the laws of the
Commonwealth of Massachusetts.
BIOGEN, INC.
By:
455455.1
9/20/94
EXHIBIT 11
BIOGEN, INC. and SUBSIDIARIES
Computation of Earnings Per Share
(in thousands, except per share amounts)
1994 1993 1992
Primary earnings (loss) per share
Weighted average number of
shares outstanding. . . . . . . . . . . . . 32,774 31,972 31,025
Shares deemed outstanding from
the assumed exercise of stock
options and warrants. . . . . . .. -- 2,748 3,173
Total. . . . . . . . . . . . . . . . . 32,774 34,720 34,198
Net income (loss) . . . . . . . . . . $ (4,897) $ 32,417 $ 38,311
Primary earnings (loss) per
share of common stock . . . . . . . $ (0.15) $ 0.93 $ 1.12
Fully diluted earnings (loss) per share
Weighted average number of
shares outstanding. . . . . . . . . 32,774 31,972 31,025
Shares deemed outstanding from
the assumed exercise of stock
options and warrants. . . . . . . . -- 3,152 4,404
Total. . . .. . . . . . . . . . . . . . 32,774 35,124 35,429
Net income (loss). . . . . . . . . . . $ (4,897) $ 32,417 $ 38,311
Fully diluted earnings (loss)
per share of common stock . . . . . $ (0.15)(a)$0.92(a) $ 1.08
(a) This calculation is submitted in accordance with Regulation S-K item
601 (b) (11) although not required by Footnote 2 to Paragraph 14 of
APB Opinion No. 15 because it results in dilution of less
than 3%.
SELECTED FINANCIAL DATA
(in thousands, except per share amounts)
Years Ended December 31 1990 1991 1992 1993 1994
Total revenues . . . . . . . $ 59,415 $ 69,577 $135,114 $149,287 $156,344
Royalties and product sales 44,920 56,477 121,714 136,418 140,433
Total expenses and taxes . . 51,695 62,391 96,803 116,870 161,241
Net income (loss). . . . . . 7,720 7,186 38,311 32,417 (4,897)
Earnings (loss) per common
share, primary . . . . . 0.07 0.15 1.12 0.93 (0.15)
Cash and marketable securities 104,146 185,990 227,888 270,351 267,802
Total assets . . . . . . . . . 158,485 253,067 311,192 356,950 377,862
Shareholders' equity . . .. 145,742 238,989 284,953 325,174 329,934
Average shares outstanding,
primary 25,430 29,964 34,198 34,720 32,774
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
Biogen, Inc. (the "Company") is a biopharmaceutical company principally
engaged in developing and manufacturing drugs for human healthcare through
genetic engineering. The Company's primary source of revenues consists of
royalties received from licensees that sell products based on technology
developed by the Company. These royalties, which have included certain
one-time payments, are primarily derived from sales of alpha interferon and
hepatitis B products. Until Biogen markets its own products directly,
royalties are expected to remain the Company's major source of revenues.
As the majority of revenues that Biogen receives is based on product
sales by its licensees and other events over which the Company has no
control, the Company's total revenues and income may continue to fluctuate
and quarter to quarter comparisons may not necessarily be meaningful.
RESULTS OF OPERATIONS
1994 AS COMPARED TO 1993
Revenues
Biogen's total revenues in 1994 were $156.3 million as compared to
$149.3 million in 1993, an increase of 5%. This increase was attributable
to higher levels of royalties and interest income.
Revenues from royalties and product sales grew to $140.4 million in
1994 as compared to $136.4 million in 1993. This increase was due
primarily to an increase in ongoing royalties received from licensee sales
of hepatitis B vaccines, sold by SmithKline Beecham plc ("SmithKline") and
Merck & Co., Inc. ("Merck") and a license agreement the Company signed in
the first quarter of 1994 with Eli Lilly and Co. ("Lilly"). These amounts
more than offset the decrease in royalties received from Schering-Plough
Corporation ("Schering-Plough"), the Company's licensee for alpha
interferon. Sales of hepatitis B vaccines outside the United States
increased 60% in the current year. The market for hepatitis B vaccines
increased significantly in Europe, primarily in France, where a vaccination
program for infants and adolescents was instituted during 1994. Sales of
hepatitis B vaccines in the United States decreased 16% from 1993 levels.
During the first quarter of 1994, the Company signed a licensing agreement
with Lilly covering certain patent rights for gene expression methods.
Under this agreement, Lilly paid the Company approximately $10 million in
royalties that related to sales occurring before 1994. Sales of alpha
interferon, sold by Schering-Plough, were $426 million in 1994 as compared
to $572 million in 1993. The decrease in alpha interferon sales is
primarily attributable to lower sales in Japan, which was driven by a 17%
government-mandated decrease in the price of alpha interferon, effective on
April 1, 1994, and restrictions on off-label usage. In the near term, the
Company expects overall sales of licensee products to continue at current
levels or increase slightly although royalty income may fluctuate depending
on changes in sales volumes for specific products. However, there are
numerous health care reform initiatives currently underway in the United
States and other major pharmaceutical markets and it is not yet clear what
effect, if any, these initiatives or other developments may have on product
sales by the Company's licensees. In addition, these sales levels may
fluctuate from quarter to quarter due to the timing and extent of major
events such as new indication approvals, vaccination programs or licensing
arrangements.
Interest income for 1994 increased from 1993 due primarily to higher
interest rates and levels of invested funds.
<PAGE>
Expenses
Total expenses were $158.3 million in 1994 as compared to $114.7
million in 1993. Cost of sales decreased to $9.9 million and primarily
represents royalty obligations to third parties. Research and development
costs were $91.2 million in 1994 compared to $79.3 million in 1993, an
increase of 15%. The increase in research and development costs was due
primarily to increased regulatory work, development costs and clinical
expenses relating to HirulogTM thrombin inhibitor and recombinant beta
interferon. On July 26, 1994, the Company announced the results of its
Phase III trial of recombinant beta interferon in patients with active
relapsing and relapsing remitting multiple sclerosis. The Company intends
to seek licensure for this product in the United States and market approval
in Europe in the first half of 1995. On October 31, 1994, the Company
announced the completion of preliminary analysis of the results of its
Phase III trial for HirulogTM thrombin inhibitor in angioplasty and that the
drug did not achieve its primary efficacy endpoint. As a result, the
Company decided to discontinue its major activities associated with
HirulogTM development. The Company currently does not intend to develop and
market HirulogTM independently but will seek a marketing partner for the
drug. The Company currently expects that, as a result of its decision
regarding HirulogTM, research and development expense will decline in the
near term as compared to 1994.
General and administrative expenses increased $7.5 million in 1994 as
compared to 1993. This was primarily due to higher costs related to market
development efforts, establishment of a European headquarters in Paris and
legal and personnel related costs.
Other expenses increased by $26.4 million and includes a third quarter
pre-tax charge of $25 million as a result of the Company's decision to
discontinue its major activities associated with HirulogTM development. The
charge relates entirely to third-party expenses associated with the
manufacturing of drug supplies and wind-down of clinical trial activities.
The 1994 amount also includes losses from the sale of certain marketable
securities and impacts of foreign exchange associated with the sale of
certain accounts receivable. The 1993 amount includes a charge of $4.3
million related to the Genentech, Inc./Schering-Plough patent settlement
with respect to the production of recombinant alpha interferon by Schering-
Plough and a charge of $1.8 million for the wind-down of the Company's
fifty percent owned European joint venture.
1993 AS COMPARED TO 1992
Revenues
Biogen's total revenues in 1993 were $149.3 million as compared to
$135.1 million in 1992, an increase of 10%, which resulted mostly from
higher royalties and product sales.
Revenues from royalties and product sales grew to $136.4 million in
1993 from $121.7 million in 1992, an increase of 12%. This increase was
due primarily to an increase in ongoing royalties received from licensee
sales of alpha interferon. Sales of alpha interferon, sold by Schering-
Plough, were $572 million in 1993 as compared to $478 million in 1992. The
increase in alpha interferon sales was primarily attributable to the
continued use of alpha interferon in Japan for the treatment of hepatitis C
since its approval in mid-1992. Sales of hepatitis B vaccines, sold by
SmithKline and Merck, increased 10% due mostly to higher sales levels in
Europe.
Revenues from research and development contracts for 1992 were from an
AIDS research and development funding agreement entered into during the
third quarter of 1989 with an insurance company. As of December 31, 1992,
all funds had been recognized under this contract.
Interest income for 1993 increased from 1992 due primarily to higher
levels of invested funds.
<PAGE>
Expenses
Total expenses were $114.7 million in 1993 as compared to $95.2 million
in 1992. Cost of sales increased $2.8 million due to the higher level of
royalty income received during 1993. Research and development costs were
$79.3 million in 1993 compared to $60.4 million in 1992, an increase of
31%. The increase in research and development costs was due primarily to
the expanded clinical development of HirulogTM thrombin inhibitor and
recombinant beta interferon. The increase in research and development
costs was also attributable to a charge in the fourth quarter related to
obtaining rights to beta interferon patents for worldwide manufacture and
sale.
Other expenses decreased $2.4 million in 1993 as compared to 1992.
During the first quarter of 1993, the Company incurred a charge of
approximately $1.8 million to write off its remaining interest in a
European joint venture which followed a $5.1 million write-down that was
incurred in the second half of 1992. These adjustments occurred as a
result of the venture entering bankruptcy proceedings and the Company's
reassessment of its European operations strategy. During the second
quarter of 1993, the Company incurred a charge of approximately $4.3
million as a result of a patent settlement between Schering-Plough and
Genentech, Inc. The settlement includes a worldwide license to certain
patented technology and processes of Genentech, Inc. used to produce
recombinant alpha interferon by Schering-Plough, the Company's licensee.
In 1992, the Company also incurred costs relating to disputes of the
royalty arrangements under certain of its licensing agreements including an
adverse ruling rendered in the fourth quarter of 1992 regarding the rate of
royalties payable from international sales of hepatitis B vaccines by
SmithKline.
Income tax expense was $2.2 million for 1993 which is substantially
less than the amount computed at U.S. federal statutory rates because of
the utilization of net operating loss carryforwards. Effective January 1,
1992, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 109, Accounting for Income Taxes, which is an asset and
liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have
been recognized in the Company's financial statements or tax returns.
Adoption of this statement had no effect on the Company's consolidated
financial position and results of operations as income taxes were formerly
accounted for using the asset and liability approach in accordance with
SFAS No. 96.
FINANCIAL CONDITION
At December 31, 1994, cash, cash equivalents and marketable securities
amounted to $267.8 million, a $2.6 million decrease from the $270.4 million
on hand at the end of 1993. Working capital was $246.9 million at December
31, 1994, a decrease of $30.8 million from December 31, 1993. Net cash
provided from operating activities in 1994 was $34.9 million while the
Company's common stock option and purchase plans provided $4.7 million.
The Company also received $10.9 million during 1994 from the exercise of
544,600 common stock warrants issued in connection with the original sale
of limited partnership interests in Biogen Medical Products Limited
Partnership ("BMPLP"). Each BMPLP warrant entitled the holder to purchase
one share of the Company's common stock and was exercisable at $20 per
share. The BMPLP warrants expired on June 30, 1994 with the settlement
period extending through July 8, 1994. Outflows of cash included
investments in property and equipment and patents of $43.7 million.
Property and equipment additions related primarily to expanding and
upgrading the Company's manufacturing and research facilities in Cambridge,
Massachusetts. The decrease in accounts receivable is primarily attributed
to an agreement the Company entered into with a bank in the first quarter
of 1994 to sell certain foreign based accounts receivable.
During the fourth quarter of 1993, the Company commenced construction
of a 150,000 square foot building in Cambridge, Massachusetts to house
research laboratories and offices. The anticipated cost of construction
including land is approximately $36 million. As of December 31, 1994, the
Company had commitments totaling approximately $5 million on this project.
Upon completion of the building in the first half of 1995, the Company has
the option, subject to certain conditions, to obtain a 7.5% secured term
loan with a bank for up to $25 million for a period of up to 10 years.
Under the terms of a contract manufacturing agreement signed in the
third quarter of 1994, the Company is committed to purchasing manufacturing
capacity for the production of its clinical material through 1997 at a cost
of approximately $3 million each year. Under this same agreement, the
Company is also required to construct for the manufacturer additional
manufacturing capacity, the cost of which is not expected to exceed $4.5
million. A portion of this amount is reimbursable by the manufacturer upon
completion of the agreement.
In the second quarter of 1994, the Company made a payment of $2.6
million to SmithKline, which amount had been previously reserved, in
settlement of the dispute between the Company and SmithKline regarding the
rate of royalties payable from non-U.S. sales of hepatitis B vaccines by
SmithKline. In the first quarter of 1993, SmithKline initiated arbitration
in the United States regarding similar royalty provisions in a separate
agreement governing sales of hepatitis B vaccines by SmithKline in the
United States. The amount paid by SmithKline and in dispute as of December
31, 1994 was approximately $18 million. A hearing is scheduled for March
1995 and a decision is expected shortly thereafter. The Company believes
that an adverse ruling in the United States is not probable, and therefore
no amount has been accrued.
During the fourth quarter of 1994, a total of six class action lawsuits
were initiated against the Company and several of its directors and
officers. These cases have been consolidated into a single proceeding in
the United States District Court for the District of Massachusetts. The
lawsuits generally allege that the Company and the named directors and
officers violated federal securities laws in connection with the Company's
public disclosures, including disclosures relating to its HirulogTM thrombin
inhibitor and other disclosures made in connection with patent matters
related to beta interferon. The plaintiffs seek damages in unspecified
amounts. The Company believes that an adverse ruling is not probable, and
therefore no amount has been accrued.
The Company believes that the financial resources available to it,
including its current working capital and its existing and anticipated
contractual relationships, may be sufficient to finance its planned
operations and capital expenditures for the near term. However, the
Company expects that it may have additional funding needs, the extent of
which will depend upon the level of royalties and product sales, the
outcome of clinical trial programs, the receipt and timing of required
regulatory approvals for products, the results of research and development
efforts and business expansion opportunities. Accordingly, from time to
time, the Company may obtain funding through various means which could
include collaborative agreements, lease or mortgage financings, sales of
equity or debt securities and other financing arrangements.
<PAGE>
BIOGEN, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
December 31 1994 1993
ASSETS
CURRENT ASSETS
Cash and cash equivalents . . . . $ 54,682 $ 74,546
Marketable securities . . . . . . 213,120 195,805
Accounts receivable . . . . . . . 18,502 31,695
Other . . . . . . . . . . . . . . 8,480 7,378
Total current assets. . . . . . . 294,784 309,424
PROPERTY AND EQUIPMENT, NET. . . . . 73,162 38,500
OTHER ASSETS
Patents, net. . . . . . . . . . . 8,116 7,164
Other . . . . . . . . . . . . . . 1,800 1,862
Total other Assets. . . . . . . . 9,916 9,026
$ 377,862 $356,950
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable. . . . . . . . . $ 9,991 $ 2,916
Accrued expenses and other. . . . 37,937 28,860
Total current liabilities . . . . 47,928 31,776
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share
(55,000,000 shares authorized;
issued: 1994 - 33,128,771;
1993 - 32,299,835 . . . . . . . 331 323
Additional paid-in capital. . . . . 368,784 353,247
Deficit . . . . . . . . . . . . . . (33,359) (28,462)
Unrealized losses on
marketable securities. . . . . . (5,867) - -
Accumulated translation adjustment. 45 66
Total shareholders' equity. . . . . 329,934 325,174
$ 377,862 $ 356,950
See Notes to Consolidated Financial Statements.
<PAGE>
BIOGEN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Years Ended December 31 1994 1993 1992
REVENUES
Royalties and product sales . . . $ 140,433 $ 136,418 $ 121,714
Research and development contracts. - - - - 2,035
Interest. . . . . . . . . . . . . . 15,911 12,869 11,365
Total revenues. . . . . . . . . . . 156,344 149,287 135,114
EXPENSES
Cost of sales . . . . . . . . . . . 9,948 12,139 9,384
Research and development. . . . . . 91,213 79,315 60,399
General and administrative. . . . . 24,686 17,236 16,985
Other . . . . . . . . . . . . . . . 32,404 5,980 8,415
Total expenses. . . . . . . . . . . 158,251 114,670 95,183
INCOME (LOSS) BEFORE INCOME TAXES. . . (1,907) 34,617 39,931
Income taxes . . . . . . . . . . . . . 2,990 2,200 1,620
NET INCOME (LOSS). . . . . . . . . . . $ (4,897) $ 32,417 $ 38,311
EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Primary . . . . . . . . . . . . . . $ (0.15) $ 0.93 $ 1.12
Fully diluted . . . . . . . . . . . $ (0.15) $ 0.92 $ 1.08
Average number of shares outstanding
Primary . . . . . . . . . . . . . . 32,774 34,720 34,198
Fully diluted . . . . . . . . . . . 32,774 35,124 35,429
See Notes to Consolidated Financial Statements.
<PAGE>
BIOGEN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31 1994 1993 1992
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) . . . . . . . . . . . $ (4,897) $ 32,417 $ 38,311
Adjustments to reconcile net income
(loss) to net cash provided from
operating activities:
Depreciation and amortization . . . . . 8,056 6,657 7,141
Write-down of investment in joint venture - - 1,803 5,118
Other . . . . . . . . . . . . . . . . . . 3,484 (330) 306
Changes in:
Accounts receivable. . . . . . . . . . 13,193 1,720 (15,026)
Other current assets. . . . . . . . . . (1,102) (234) (2,359)
Accounts payable, accrued expenses
and other liabilities 16,152 5,537 9,561
Net cash provided from operating activities . 34,886 47,570 43,052
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of marketable securities, net . .(26,625) (53,228) (11,557)
Acquisitions of property and equipment. . .(40,540) (10,770) (9,379)
Additions to patents. . . . . . . . . . . . (3,130) (2,697) (2,933)
Net cash used by investing activities . . .(70,295) (66,695) (23,869)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock and option
exercises . . . . . . . . 15,545 7,808 10,033
Net cash provided from financing activities 15,545 7,808 10,033
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS. . . . . . . . . . . . . (19,864) (11,317) 29,216
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR . . . . . . . . . . . . . . . . . 74,546 85,863 56,647
CASH AND CASH EQUIVALENTS, END OF YEAR . . . $ 54,682 $ 74,546 $ 85,863
See Notes to Consolidated Financial Statements.
<PAGE>
BIOGEN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
(in thousands)
Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
Additional Losses on Accumulated
Common Paid-in Marketable Translation Shareholders'
Stock Capital Deficit Securities Adjustment Equity
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1991 $ 308 $ 335,421 $ (99,190) $ -- $ 2,450 $238,989
Issuance of common . . . . . . . . 345 345
Exercise of options. . . . . . . . 9 9,679 9,688
Net income . . . . . . . . . . . . 38,311 38,311
Write-down of joint venture (3,352) (3,352)
Translation adjustment . . . . . . 972 972
Balance, December 31, 1992 317 345,445 (60,879) -- 70 284,953
Issuance of common . . . . . . . . 475 475
Exercise of options. . . . . . . . 6 7,327 7,333
Net income . . . . . . . . . . . . 32,417 32,417
Translation adjustment . . . . . . (4) (4)
Balance, December 31, 1993 323 353,247 (28,462) -- 66 325,174
Conversion of warrants . . . . . . 5 10,889 10,894
Issuance of common . . . . . . . . 457 457
Exercise of options. . . . . . . . 3 4,191 4,194
Unrealized losses on
marketable securities. . . . . (5,867) (5,867)
Net loss . . . . . . . . . . . . . (4,897) (4,897)
Translation adjustment . . . . . . (21) (21)
Balance, December 31, 1994 $331 $ 368,784 $(33,359) $ (5,867) $ 45 329,934
See Notes to Consolidated Financial Statements.<PAGE>
</TABLE>
BIOGEN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Biogen, Inc. (the "Company") is a biopharmaceutical company principally
engaged in developing and manufacturing drugs for human healthcare through
genetic engineering. The Company's revenues are generated from the
worldwide sales by licensees of five products, including alpha interferon
and hepatitis B vaccines and diagnostic products. Biogen is focused
primarily on developing and testing products for the treatment of multiple
sclerosis, inflammatory and respiratory diseases, and certain viruses and
cancers.
Consolidation Principles
The financial statements include the accounts of Biogen, Inc. and its
subsidiaries, each of which is wholly owned. Intercompany balances and
transactions have been eliminated.
Translation of Foreign Currencies
Adjustments resulting from the translation of the financial statements of
the Company's foreign operations are excluded from the determination of
net income and accumulated in a separate component of shareholders'
equity. Foreign exchange transaction gains and losses are included in the
results of operations. Such amounts for the years presented were
insignificant.
Cash, Cash Equivalents and Marketable Securities
The Company considers only those investments which are highly liquid,
readily convertible to cash and which mature within three months from date
of purchase to be cash equivalents. The Company invests in U.S.
government securities and corporate bonds and notes with strong credit
ratings. The Company limits the amount of investment exposure as to
institution, maturity and investment type. As of January 1, 1994,
marketable securities are recorded at fair value and unrealized gains and
losses are recorded as part of shareholders' equity in accordance with
Statement of Financial Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities. The impact of this
statement at adoption was not material. The carrying amount of marketable
securities for 1993 was at amortized cost.
Accounts Receivable
During the first quarter of 1994, the Company entered into an agreement
with a bank to sell certain foreign based accounts receivable, with
recourse, up to $14 million per quarter which approximated the proceeds in
each quarter. The exposure to credit risk under the recourse provision is
minimal since the debtors are highly rated companies. The selling price
is partially determined by foreign exchange rates at the end of each
quarter. Resulting gains and losses are recorded in other expenses when
the receivables are sold.
Property and Equipment
Property and equipment is carried at cost and depreciation is calculated
on the straight-line basis over the estimated useful lives of the assets.
Leasehold improvements are being amortized over the terms of leases, up to
20 years. Equipment is being depreciated over estimated useful lives from
5 to 10 years.
<PAGE>
Patents
The costs of patents and patent applications are amortized on the
straight-line basis over estimated useful lives, up to 15 years.
Accumulated amortization of patent costs as of December 31, 1994 and 1993
was $7.9 million and $5.8 million, respectively.
Revenues
The Company receives revenues under license agreements with a number of
third parties that sell products based on technologies developed by the
Company. All of these agreements provide for the payment of royalties to
the Company based on sales of the licensed product. The Company records
these revenues based on estimates of the sales that occurred during the
relevant period. Many of these agreements also provide for the payment of
one-time, non-refundable fees when the agreement is signed or when
commercial goals are achieved. These fees are recorded as revenue in
accordance with the terms of the particular agreement.
Research and Development Expenses
Research and development costs are expensed as incurred.
Income Taxes
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes, which is an
asset and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events
that have been recognized in the Company's financial statements or tax
returns.
Per Share Data
Earnings (loss) per share is based upon the weighted average number of
common shares and, if dilutive, all common stock equivalents outstanding,
which include options and warrants.
2. RESEARCH AND DEVELOPMENT AGREEMENT
During 1989, the Company entered into a funding arrangement for one of its
research projects with an insurance company, which expired on December 31,
1992. Under this agreement, the Company received $20 million.
Approximately $5 million of this amount was received in exchange for
issuing 1.8 million common stock warrants with an exercise price of $17
per share. The Company began receiving the remainder of the funds at the
end of 1989 at a rate of fifty percent of development costs incurred,
subject to certain limits. These payments were used to partially fund the
Company's development costs for rsCD4-based products. Biogen will pay
royalties to the insurance company on worldwide sales of rsCD4-based
products subject to specified maximums.
3. FINANCIAL INSTRUMENTS
As of January 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt
and Equity Securities. Under this statement, the Company is required to
classify its marketable securities (all of which are debt securities) into
one or more of the following categories: held-to-maturity, trading or
available-for-sale. All of the Company's marketable securities, including
cash equivalents, are classified as available-for-sale. Under this
statement, these securities are recorded at fair market value and
unrealized gains and losses are recorded as part of shareholders' equity.
Following is a summary of marketable securities as of December 31, 1994:
Fair Unrealized Amortized
(in thousands) Value Gains Losses Cost
U.S. Government securities . . . $191,458 $ 16 $ 4,160 $ 195,602
(average maturity of 15 months)
Corporate debt securities. . . . 61,923 - - 1,723 63,646
(average maturity of 15 months)
Proceeds from maturities and other sales of securities, which were
primarily reinvested, for the year ended December 31, 1994, were $754.4
million. Gross realized losses on these sales were $3.4 million. The
carrying amount of marketable securities for 1993 was at amortized cost
which approximated fair value.
In October 1994, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 119 "Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments." The
statement is effective for the current fiscal year. The Company has only
limited involvement with derivative financial instruments and does not use
them for trading purposes. They are used to manage interest rate and
foreign currency movement risks for specific transactions.
The Company enters into forward contracts from time to time to limit its
exposure to fluctuations in foreign currency exchange rates. Differences
between the fair value as of the period end and the contracted value were
insignificant and are recorded as gains or losses in other expenses.
The Company has entered into a forward interest rate swap agreement with a
bank to limit its exposure to fluctuations in interest rates and to lower
its financing costs. This was done in connection with an option to enter
into a term loan upon completion of its research laboratory and office
building in Cambridge, Massachusetts. The effective date of the swap
agreement is May 8, 1995 with a termination date of May 9, 2005. Under
the swap agreement, the Company agrees to exchange with the bank semi-
annually the difference between a fixed rate and a floating rate computed
on a notional amount beginning at $25 million and amortizing according to
the terms of the loan agreement. Under the terms of the loan and swap
agreements, the Company has fixed its interest rate at 7.5%. The fair
value of the swap agreement was $1.6 million at December 31, 1994 which
represents the estimated amount the Company would receive to terminate the
swap agreement taking into consideration current interest rates. The
market risk is limited to interest rate movements.
<PAGE>
4. CONSOLIDATED BALANCE SHEET DETAILS
(in thousands) 1994 1993
Property and equipment:
Land . . . . . . . . . . . . . . . . . . $ 2,691 $ 603
Construction in progress . . . . . . . . 29,117 3,409
Leasehold improvements . . . . . . . . . 34,168 31,544
Equipment. . . . . . . . . . . . . . . . 38,675 28,555
Total cost . . . . . . . . . . . . . . . 104,651 64,111
Less accumulated depreciation. . . . . . 31,489 25,611
$ 73,162 $ 38,500
Accrued expenses and other:
Royalties and licensing fees . . . . . . $ 8,379 $ 14,614
Clinical trial costs . . . . . . . . . . 5,097 4,614
Discontinuance of HirulogTM program . . . 7,813 - -
Income taxes . . . . . . . . . . . . . . 5,312 2,481
Other. . . . . . . . . . . . . . . . . . 11,336 7,151
$ 37,937 $ 28,860
5. PENSIONS
The Company has a defined benefit pension plan which provides benefits to
substantially all of its employees. The Company also has a supplemental
retirement benefit plan which covers certain employees. The pension plans
are noncontributory with benefit formulas based on employee earnings and
credited years of service. The Company's funding policy for its pension
plans is to contribute amounts deductible for federal income tax purposes.
Funds contributed to the plans are invested primarily in fixed income and
equity securities. Pension cost for the years ended December 31 are
summarized below:
(in thousands) 1994 1993 1992
Service cost . . . . . . . . . . . . . . $ 791 $ 477 $ 356
Interest cost. . . . . . . . . . . . . . 313 236 215
Actual return on plan assets . . . . . . 9 (113) (155)
Net amortization and deferral. . . . . . (149) (33) (28)
Net pension cost . . . . . . . . . . . . $ 964 $ 567 $ 388
<PAGE>
The funded status of the defined benefit plans at December 31, is as
follows:
(in thousands) 1994 1993
Actuarial present value of:
Vested benefits obligation . . . . . $ (2,720) $ (2,462)
Non-vested benefits. . . . . . . . . (300) (266)
Accumulated benefit obligation . . . $ (3,020) $ (2,728)
Projected benefit obligation . . . . . $ (4,419) $ (4,018)
Plan assets at fair value. . . . . . . $ 2,289 $ 1,815
Projected benefit obligation in excess
of plan assets . . . . . . . . . . . $ (2,130) $ (2,203)
Unrecognized net asset . . . . . . . . (83) (104)
Unrecognized net loss. . . . . . . . . 137 559
Unrecognized prior service cost. . . . 183 202
Accrued pension cost . . . . . . . . . $ (1,893) $ (1,546)
The projected benefit obligation was determined using an assumed discount
rate of 8.5% for 1994 and 7.5% for 1993. The assumed long-term
compensation increase rates were 5% for 1994 and 1993. The assumed long-
term rate of return on plan assets was 8% for both years.
6. INCOME TAXES
The components of income (loss) before income taxes and of income tax
expense for the years ended December 31 follow:
(in thousands) 1994 1993 1992
Income (loss) before income taxes:
Domestic . . . . . . . . . . . . $ (1,533) $ 37,218 $ 45,522
Foreign. . . . . . . . . . . . . (374) (2,601) (5,591)
$ (1,907) $ 34,617 $ 39,931
Income tax expense:
Federal. . . . . . . . . . . . . $ 2,540 $ 1,700 $ 1,300
State. . . . . . . . . . . . . . 415 476 313
Foreign. . . . . . . . . . . . . 35 24 7
$ 2,990 $ 2,200 $ 1,620
<PAGE>
Deferred tax assets (liabilities) are comprised of the following at
December 31:
(in thousands) 1994 1993
Tax credits. . . . . . . . . . . . . $ 18,287 $ 15,210
Loss carryforwards . . . . . . . . . 29,017 31,753
Discontinuance of HirulogTM program . 7,548 - -
Other. . . . . . . . . . . . . . . . 7,702 4,858
Gross deferred tax assets. . . . . . 62,554 51,821
Depreciation and amortization. . . . (4,117) (4,222)
Gross deferred tax liabilities . . . (4,117) (4,222)
Deferred tax assets valuation allowance. (58,437) (47,599)
$ - - $ - -
The net change in the valuation allowance was an increase of $10.8 million
in 1994 and a decrease of $3.7 million in 1993. Of the $58.4 million
valuation allowance at December 31, 1994, $29.3 million relating to
deductions for non-qualified stock options will be credited to paid-in
capital, if realized.
A reconciliation between the amount of reported income tax expense and the
amount computed using the U.S. federal statutory rate of 35% for 1994 and
1993 and 34% for 1992 follows:
(in thousands) 1994 1993 1992
Income tax (benefit) at statutory rates. $ (667) $ 12,116 $ 13,577
Foreign losses without tax benefit
and foreign rate differential . 391 934 1,907
Effects of losses not currently utilizable 2,962 - - - -
Utilization of net operating loss
carryforwards. . . . . . . . . . - - (11,159) (14,070)
Other. . . . . . . . . . . . . . . 304 309 206
Reported income tax expense. . . . $ 2,990 $ 2,200 $ 1,620
At December 31, 1994, the Company had net operating loss carryforwards
available in the United States for federal income tax return purposes of
$80 million and tax credits of $13 million which expire at various dates
through 2009. Total income tax payments for the years ended December 31,
1994, 1993 and 1992 amounted to $170,000, $983,000 and $745,000,
respectively.
7. COMMITMENTS AND CONTINGENCIES
The Company rents laboratory and office space and certain equipment under
noncancellable operating leases. The rental expense under these leases,
which terminate at various dates through 2004, amounted to $4.7 million in
1994, $3.6 million in 1993 and $3.5 million in 1992. The lease agreements
contain various clauses for renewal at the option of the Company and, in
certain cases, escalation clauses linked generally to rates of inflation.
At December 31, 1994, minimum annual rental commitments under
noncancellable leases were as follows:
(in thousands)
Year
1995 . . . . . . . . . . . . . . $ 4,444
1996 . . . . . . . . . . . . . . 4,341
1997 . . . . . . . . . . . . . . 4,073
1998 . . . . . . . . . . . . . . 2,078
1999 . . . . . . . . . . . . . . 741
Thereafter . . . . . . . . . . . 3,291
Total minimum lease payments . . $ 18,968
Under the terms of a contract manufacturing agreement signed in the third
quarter of 1994, the Company is committed to purchasing manufacturing
capacity for the production of its clinical material through 1997 at a
cost of approximately $3 million each year. Under this same agreement,
the Company is also required to construct for the manufacturer additional
manufacturing capacity, the cost of which is not expected to exceed $4.5
million. A portion of this amount is reimbursable by the manufacturer
upon completion of the agreement.
During the fourth quarter of 1993, the Company commenced construction of a
150,000 square foot building in Cambridge, Massachusetts to house research
laboratories and offices. The anticipated cost of construction including
land is approximately $36 million. As of December 31, 1994, the Company
had commitments totaling approximately $5 million on this project. Upon
completion of the building in the first half of 1995, the Company has the
option, subject to certain conditions, to obtain a 7.5% secured term loan
with a bank for up to $25 million for a period of up to 10 years.
In the second quarter of 1994, the Company made a payment of $2.6 million
to SmithKline Beecham plc ("SmithKline"), which amount had been previously
reserved, in settlement of the dispute between the Company and SmithKline
regarding the rate of royalties payable from non-U.S. sales of hepatitis B
vaccines by SmithKline. In the first quarter of 1993, SmithKline
initiated arbitration in the United States regarding similar royalty
provisions in a separate agreement governing sales of hepatitis B vaccines
by SmithKline in the United States. The amount paid by SmithKline and in
dispute as of December 31, 1994 was approximately $18 million. A hearing
is scheduled for March 1995 and a decision is expected shortly thereafter.
The Company believes that an adverse ruling in the United Sates is not
probable, and therefore no amount has been accrued.
During the fourth quarter of 1994, a total of six class action lawsuits
were initiated against the Company and several of its directors and
officers. These cases have been consolidated into a single proceeding in
the United States District Court for the District of Massachusetts. The
lawsuits generally allege that the Company and the named directors and
officers violated federal securities laws in connection with the Company's
public disclosures, including disclosures relating to its HirulogTM
thrombin inhibitor and other disclosures made in connection with patent
matters related to beta interferon. The plaintiffs seek damages in
unspecified amounts. The Company believes that an adverse ruling is not
probable, and therefore no amount has been accrued.
<PAGE>
8. SHAREHOLDERS' EQUITY
Convertible Exchangeable Preferred Stock
The Company has authority to issue 20,000,000 shares of $.01 par value
preferred stock.
Shareholder Rights Plan
In 1989, the Company's Board of Directors declared a dividend of one
preferred share purchase right (a "right") for each share of common stock
outstanding. Each right entitles the holder to purchase from the Company
one one-hundredth of a share of $.01 par value Series A junior
participating preferred stock at a price of $68.00 per one-hundredth of a
share, subject to certain adjustments. The rights are exercisable only if
a person or group acquires 20% or more of the outstanding common stock of
the Company or commences a tender offer which would result in the
ownership of 20% or more of the outstanding common stock of the Company;
or if 10% of the Company's common stock is acquired and the acquirer is
determined by the Board of Directors to be an adverse person (as defined
in the rights plan). Once a right becomes exercisable, the plan allows
the Company's shareholders to purchase common stock at a substantial
discount. Unless earlier redeemed, the rights expire on May 8, 1999. The
Company is entitled to redeem the rights at $.01 per right subject to
adjustment for any stock split, stock dividend or similar transaction.
As of December 31, 1994, the Company has authorized the issuance of
400,000 shares of Series A junior participating preferred stock for use in
connection with the shareholder rights plan.
Share Option and Purchase Plans
The Company has several plans and arrangements under which it may grant
options to employees, Directors, Scientific Board members and consultants
to purchase common stock. Options are granted for periods of up to 10
years and become exercisable in installments over periods of up to 7 years
or upon the achievement of scientific or other goals. Activity under
these plans and arrangements follows:
1994 1993 1992
Outstanding, January 1 . . 4,755,330 4,785,293 4,381,635
Granted. . . . . . . . . . 1,211,697 917,327 1,464,153
Exercised. . . . . . . . . (268,539) (564,021) (902,278)
Cancelled. . . . . . . . . (316,420) (383,269) (158,217)
Outstanding, December 31 . 5,382,068 4,755,330 4,785,293
Options were exercised during the three years ended December 31, 1994 at
prices ranging from $4.25 to $45.19 per share. The exercise price of
options outstanding at December 31, 1994, 1993, and 1992 ranged from $4.25
to $54.88 per share. At December 31, 1994, 2,594,307 options were
exercisable and 944,636 shares were reserved for issuance of additional
options which may be granted under the plans.
The Company also has an employee stock purchase plan covering
substantially all of its employees. This plan allows employees to
purchase common stock at 85% of the lower of the fair market value at
either the date of the beginning of the plan period or the purchase date.
Purchases under this plan are subject to certain limitations and may not
exceed an aggregate of 250,000 shares during the term of the plan; no
shares may be issued after December 31, 1997. Through December 31, 1994,
99,798 shares have been issued under this plan.
Common Stock Warrants
At December 31, 1994, 1.8 million warrants issued in connection with a
research agreement with an insurance company were outstanding. Each
warrant entitles the holder to purchase one share of the Company's common
stock and may be exercised at $17.00 per share through December 31, 1996.
During the year ended December 31, 1994, the Company received $10.9
million from the exercise of 544,600 common stock warrants issued in
connection with the original sale of limited partnership interests in
Biogen Medical Products Limited Partnership ("BMPLP"). Each BMPLP warrant
entitled the holder to purchase one share of the Company's common stock
and was exercisable at $20 per share. The BMPLP warrants expired on June
30, 1994, with the settlement period extending through July 8, 1994.
9. GEOGRAPHIC DATA
Revenues, excluding interest, were derived in the following geographic
areas for the years ended December 31:
(in thousand) 1994 1993 1992
United States. . . . . . . . . $ 44,083 $ 45,846 $ 45,885
Japan. . . . . . . . . . . . . 27,216 43,959 27,576
Europe . . . . . . . . . . . . 56,881 32,273 41,582
Other. . . . . . . . . . . . . 12,253 14,340 8,706
$ 140,433 $136,418 $ 123,749
The Company received revenues from three unrelated parties in 1994
accounting for 40%, 34% and 11% of revenues before interest (two unrelated
parties in 1993 accounting for 57% and 25%, and two unrelated parties in
1992 accounting for 53% and 28%).
10. OTHER EXPENSES
During the third quarter of 1994, the Company incurred a pre-tax charge to
other expenses of $25 million as a result of its decision to discontinue
its major activities associated with HirulogTM development. The charge
relates entirely to third-party expenses associated with the manufacturing
of drug supplies and wind-down of clinical trial activities.
During the third quarter of 1992, the Company incurred a charge of
approximately $5.1 million, included in other expenses, for the write-down
of its fifty percent interest in a European joint venture. In connection
with this write-down the Company discontinued use of the equity method of
accounting for the venture. During the first quarter of 1993, the Company
incurred a charge to other expenses of approximately $1.8 million for the
write-off of its remaining interest in the venture. These adjustments
occurred as a result of the venture entering bankruptcy proceedings and
the Company's reassessment of its European operations strategy.
11. QUARTERLY FINANCIAL DATA (UNAUDITED)
(in thousands, except per share amounts)
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
1994
Total revenues . . . . $ 44,780 $36,779 $ 31,812 $ 42,973 $156,344
Royalties and product
sales. . . . . . 41,167 32,793 27,733 38,740 140,433
Total expenses and taxes 33,551 36,168 58,233 33,289 161,241
Net income (loss). . . . . 11,229 611 (26,421) 9,684 (4,897)
Earnings (loss) per share
of common stock
Primary and fully
diluted 0.31 0.02 (0.80) 0.27 (0.15)
1993
Total revenues . . . . . $ 35,421 $37,854 $ 37,305 $ 38,707 $149,287
Royalties and product
sales. . . 32,540 34,714 33,942 35,222 136,418
Total expenses and taxes . 24,161 32,210 26,030 34,469 116,870
Net income . . . . . . . . 11,260 5,644 11,275 4,238 32,417
Earnings per share of
common stock
Primary. . . . . . . . . 0.32 0.17 0.33 0.11 0.93
Fully diluted. . . . . . 0.32 0.17 0.32 0.11 0.92
Total expenses for the third quarter of 1994 includes a pre-tax charge of
$25 million as a result of the Company's decision to discontinue its
major activities associated with HirulogTM development.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of Biogen, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows and of shareholders' equity
present fairly, in all material respects, the financial position of Biogen,
Inc. and its subsidiaries at December 31, 1994, and 1993, and the results of
their operations and their cash flows for each of the three years in the
period ended December 31, 1994, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Boston, Massachusetts
February 7, 1995
SHAREHOLDER INFORMATION SEC FORM 10-K:
A copy of the Company's annual report
CORPORATE HEADQUARTERS to the Securities and Exchange
Biogen, Inc. Commission on Form 10-K is available
14 Cambridge Center without charge upon written request
Cambridge, MA 02142 to the Corporate Communications
Telephone: (617) 679-2000 Department, Biogen, Inc.,
Fax: (617) 679-2617 14 Cambridge Center, Cambridge, MA
02142.
ANNUAL MEETING TRANSFER AGENT:
Friday, June 23, 1995 at 10:00 a.m., For shareholder questions regarding
See proxy for location. lost certificates, address changes
All shareholders are welcome and changes of ownership or name in
which the shares are held, direct
MARKET FOR SECURITIES: inquiries to:
Biogen's securities are quoted on
the NASDAQ National Market System: State Street Bank and Trust Company
Common Stock symbol: BGEN P.O. Box 8200
Boston, MA 02266-8200
Telephone: (800)426-5523
As of February 17, 1995, there were
approximately 3,181 holders of record INDEPENDENT ACCOUNTANTS:
of the Company's Common Stock. The Price Waterhouse
Company has not paid any dividends on 160 Federal Street
its Common Stock since its inception, Boston, MA 02110
and does not intend to pay any
dividends in the foreseeable future. U.S. LEGAL COUNSEL:
The quarterly high and low closing Mintz, Levin, Cohn, Ferris, Glovsky
sales price of the Common Stock on the and Popeo, P.C.
NASDAQ National Market System for 1994 One Financial Center
and 1993 are as follows: Boston, MA 02111
High Low
FISCAL 1994
First Quarter.....52 3/4 32 7/8 The Biogen logo is a registered
Second Quarter....38 3/4 27 1/4 trademark of Biogen, Inc.
Third Quarter.....55 3/4 27 3/4 Hirulog TM is a trademark of
Fourth Quarter....55 32 3/4 Biogen, Inc.
Intron R A is a registered
FISCAL 1993 trademark of Schering-Plough
First Quarter.....47 3/4 27 1/4 Corporation.
Second Quarter....39 25 3/4
Third Quarter.....37 1/4 25 3/4 C Biogen, Inc. 1995 All rights
Fourth Quarter....42 1/4 34 1/2 reserved.
SUBSIDIARIES OF BIOGEN, INC.
State or Other
Jurisdiction of
Name of Incorporation
Biogen Securities Corp. Massachusetts
Biogen Realty Corp. Massachusetts
Biogen GmbH Germany
Biogen Limited U.K.
Biogen France, S.A. France
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of its Registration Statements on Form S-3, as amended
(Nos. 33-14741, 33-14743, 33-20183, and 33-51639) and in the Registration
Statements on Form S-8, as amended (Nos. 2-87550, 2-96157, 33-9827, 33-
14742, 33-37312, 33-22378, 33-41077 and as filed on September 21, 1993) of
Biogen, Inc. and its subsidiaries of our report dated February 7, 1995
appearing in the 1994 Annual Report to Shareholders which is incorporated
in this Annual Report on Form 10-K.
Price Waterhouse LLP
Boston, Massachusetts
March 6, 1995
