Forward-Looking Information

In addition to historical information, this report contains forward-looking statements that are based on our current beliefs and expectations. These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. These forward-looking statements do not relate strictly to historical or current facts and they may be accompanied by such words as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "plan," "project," "target," "may," "will" and other words and terms of similar meaning. Reference is made in particular to forward-looking statements regarding the anticipated level and mix of future product sales, royalty revenues, milestone payments, expenses, contractual obligations, the value of our portfolio of marketable securities, the development and marketing of additional products, the impact of competitive products, the incidence or anticipated outcome of pending or anticipated litigation, patent-related proceedings, tax assessments and other legal proceedings, our effective tax rate for future periods, our collaborations, our ability to finance our operations and meet our manufacturing needs and the source of funding for such activities, the completion and use of our manufacturing facility in Hillerød, Denmark, our share repurchase program, and our plans to spend additional capital on external business development and research opportunities. Risk factors which could cause actual results to differ from our expectations and which could negatively impact our financial condition and results of operations are discussed in the section entitled "Risk Factors" in Part II of this report and elsewhere in this report. Forward-looking statements, like all statements in this report, speak only as of the date of this report (unless another date is indicated). Unless required by law, we do not undertake any obligation to publicly update any forward-looking statements.

The following discussion should be read in conjunction with our consolidated financial statements and related notes beginning on page 3 of this quarterly report on Form 10-Q.

Executive Summary

Biogen Idec Inc. ("Biogen Idec," "we," "us" or "the Company") is a global biotechnology company that creates new standards of care in therapeutic areas with high unmet medical needs.

We currently have four marketed products:

• AVONEX® (interferon beta-1a);

• RITUXAN® (rituximab);

• TYSABRI® (natalizumab); and,

• FUMADERM® (dimethylfumarate and monoethylfumarate salts).

Results for the first three months of 2009 included total revenue of $1,036.5 million, net income attributable to Biogen Idec Inc. of $244.0 million and diluted net income per share of $0.84. The 2009 first quarter revenues increased 10.0% over the same period in 2008. The diluted net income per share represents a 55.6% increase over the same period in 2008. These results were primarily driven by the continued growth of TYSABRI revenue to $165.2 million in the quarter, a 3.6% increase in AVONEX revenues to $555.3 million, a 12.8% increase in RITUXAN revenues from our unconsolidated joint business arrangement totaling $278.8 million, and a 21.7% decrease in income tax expense, partially offset by a 5.1% increase in total costs and expenses.

During the first quarter of 2009, Biogen Idec recognized revenue of $165.2 million related to TYSABRI. This amount represents an increase of 44.0% as compared to the same period in 2008 and is comprised of $53.0 million related to product sold through Elan in the U.S. and $112.2 million related to product sold outside the U.S., or the rest of world. This growth is primarily due to an overall increase in the number of patients using TYSABRI in both the United States and in our rest of world markets. Pursuant to our collaboration agreement with Elan, Elan paid us a $50.0 million milestone payment during the first quarter of

2009 in order to maintain the current collaboration profit sharing split, which is further discussed below under Results of Operations.

U.S. Sales of AVONEX increased 10.2% to $340.0 million during the three months ended March 31, 2009 as compared to the same period in 2008. This increase was primarily due to price increases partially offset by a decrease in patient demand. The increase in U.S. sales was partially offset by a 5.4% decrease in international sales, primarily resulting from the negative impact of exchange rates.

As described below under Results of Operations, we record our share of the pretax co-promotion profits from our joint business arrangement related to sales of RITUXAN. Net sales of RITUXAN to third-party customers in the U.S. for the three months ended March 31, 2009 totaled $641.6 million, which resulted in $179.5 million of co-promotion profits recognized as unconsolidated joint business revenue. In addition, we achieved a 10.2% increase in royalty revenues on sales of RITUXAN outside of the U.S. These increases were primarily due to increased unit sales resulting from continued growth for treatment of B-cell NHL and chronic lymphocytic leukemia (an unapproved and unpromoted use of RITUXAN) and increased unit sales for the treatment of rheumatoid arthritis.

The effect of the 10.0% increase in total revenue was partially offset by a 5.1% increase in total costs and expenses. Research and development expense increased $21.3, million or 8.2,% primarily due to the continued advancement of several of our late stage programs. Selling, general and administrative expense increased $6.0 million, or 2.8,% as a result of increased census costs and personnel to support the AVONEX business and support TYSABRI growth. The increases in research and development and selling, general and administrative expenses were partially offset by a 2.7% decrease in cost of sales and 10.6% reduction in costs associated with amortization of acquired intangible assets and acquired in-process research and development. The reduction in income tax expense is more fully described within Note 10, Income Taxes, in "Notes to Consolidated Financial Statements" of this Form 10-Q.

Results of Operations

Revenues

Revenues were as follows (in millions):


                                             For the Three Months Ended March 31,
                                               2009                        2008

      Product revenues
      United States                   $   393.0          38.0 %   $  350.0          37.2 %
      Rest of world                       340.4          32.8 %      315.1          33.4 %

      Total product revenues          $   733.4          70.8 %   $  665.1          70.6 %
      Unconsolidated joint business       278.8          26.9 %      247.2          26.2 %
      Other revenues                       24.3           2.3 %       29.9           3.2 %

      Total revenues                  $ 1,036.5         100.0 %   $  942.2         100.0 %

Product Revenues

Product revenues were as follows (in millions):


                                         For the Three Months Ended March 31,
                                            2009                       2008

          AVONEX                   $  555.3          75.8 %   $  536.1          80.6 %
          TYSABRI                     165.2          22.5 %      114.7          17.2 %
          FUMADERM                     10.6           1.4 %       11.7           1.8 %
          Other                         2.3           0.3 %        2.6           0.4 %

          Total product revenues   $  733.4         100.0 %   $  665.1         100.0 %

Cost of Sales, excluding Amortization of Intangible Assets

Costs of sales, excluding amortization of intangible assets were as follows (in millions):

                                                        For the Three Months Ended March 31,
                                                         2009                         2008

Cost of product revenues                        $     97.0         98.8 %    $   99.7           98.8 %
Cost of other revenues                                 1.2          1.2 %         1.2            1.2 %

Cost of sales, excluding amortization of
intangible assets                               $     98.2          100 %    $  100.9          100.0 %

Cost of product revenues decreased $2.7 million to $97.0 million for the three months ended March 31, 2009 as compared to the same period in 2008. This decrease was primarily the result of a decrease in royalty payments partially offset by higher sales volume resulting in an increase in cost of product revenues and an increase in write-offs relative to unmarketable inventory.

During the three months ended March 31, 2009 and 2008, we have written-down $9.4 million and $4.4 million, respectively, in unmarketable inventory, which was charged to cost of sales.

AVONEX

Revenues from AVONEX were as follows (in millions):


                                        For the Three Months Ended March 31,
                                           2009                       2008

          AVONEX
          United States           $  340.0          61.2 %   $  308.4          57.5 %
          Rest of world              215.3          38.8 %      227.7          42.5 %

          Total AVONEX revenues   $  555.3         100.0 %   $  536.1         100.0 %

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, U.S. sales of AVONEX increased $31.6 million, or 10.2%, due primarily to price increases partially offset by a decrease in patient demand.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, rest of world sales of AVONEX decreased $12.4 million, or 5.4%, primarily due to the negative impact of exchange rates offset by price increases.

We expect to face increasing competition in the multiple sclerosis, or MS, marketplace in both the U.S. and rest of world from existing and new MS treatments, including TYSABRI and our other pipeline products, which may have a continued negative impact on the unit sales of AVONEX. We expect future unit sales of AVONEX to be dependent to a large extent on our ability to compete successfully with the products of our competitors.

TYSABRI

Revenues from TYSABRI were as follows (in millions):


                                         For the Three Months Ended March 31,
                                            2009                       2008

          TYSABRI
          United States            $   53.0          32.1 %   $   41.3          36.0 %
          Rest of world               112.2          67.9 %       73.4          64.0 %

          Total TYSABRI revenues   $  165.2         100.0 %   $  114.7         100.0 %

In August 2000, we entered into a collaboration agreement with Elan Pharma International, Ltd, or Elan, an affiliate of Elan Corporation, plc, to collaborate in the development, manufacture and commercialization of

ANTEGREN® (natalizumab), a humanized monoclonal antibody. The drug has since been renamed TYSABRI. Under the terms of the agreement with Elan, we manufacture TYSABRI and collaborate with Elan on the product's marketing, commercial distribution and on-going development activities.

In the U.S., Elan and we co-market TYSABRI, with us primarily responsible for marketing TYSABRI for MS and Elan primarily responsible for marketing TYSABRI for Crohn's disease. We sell TYSABRI to Elan who sells the product to third party distributors. Our sales price to Elan in the U.S. is set prior to the beginning of each quarterly period to effect an approximate equal sharing of the gross margin between Elan and us. We recognize revenue for U.S. sales of TYSABRI upon Elan's shipment of the product to the third party distributors. We incur manufacturing and distribution costs, research and development expenses, commercial expenses and general and administrative expenses. We record these expenses to their respective line items within our consolidated statement of income when they are incurred. Research and development and sales and marketing expenses are shared with Elan and the reimbursement of these expenses is recorded as reductions of the respective expense categories.

In the rest of world, we are responsible for distributing TYSABRI to customers and are primarily responsible for all operating activities. We recognize revenue for sales of TYSABRI in rest of world at the time of product delivery to our customers. Payments are made to Elan for their share of rest of world net operating profits to effect an equal sharing of collaboration operating profit. These payments include the reimbursement of our portion of third-party royalties that Elan pays on behalf of the collaboration, relating to rest of world sales. These amounts are reflected in the collaboration profit sharing line in our consolidated statement of income. As sales of TYSABRI outside the U.S. increase, our collaboration profit sharing expense is expected to increase.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, U.S. sales of TYSABRI increased $11.7 million, or 28.3%. These increases are primarily due to an increase in patients using TYSABRI in the U.S.

For the three months ended March 31, 2009, compared to the three months ended March 31, 2008, rest of world sales of TYSABRI increased $38.8 million, or 52.9%. These increases are primarily due to an increase in the number of patients using TYSABRI offset by the negative impact of exchange rates.

Net sales of TYSABRI from our collaboration partner, Elan, to third-party customers in the U.S. for the three months ended March 31, 2009 and 2008 were $116.0 million and $86.3 million, respectively.

Since the reintroduction of TYSABRI in the U.S. and the introduction of TYSABRI in the rest of world in July 2006, we have disclosed six cases of progressive multifocal leukoencephalopathy, or PML, a known side effect, in patients taking TYSABRI in the post marketing setting. These patients were the only confirmed cases of PML reported to us during this period. We continue to monitor the growth of TYSABRI unit sales in light of these results and we continue to develop protocols to potentially mitigate the risk and outcome of PML in patients being treated with TYSABRI. We believe that the reported cases of PML have negatively impacted the growth of TYSABRI in both the U.S. and rest of world.

Pursuant to our collaboration agreement with Elan, Elan paid us $75.0 million in 2008 and $50.0 million in 2009, respectively, representing milestone payments made in order to maintain the current collaboration profit sharing split. We have recorded these amounts as deferred revenue upon receipt and are recognizing the entire $125.0 million as product revenue in our consolidated statement of income over the term of our collaboration with Elan based on a units of revenue method whereby the revenue recognized is based on the ratio of units shipped in the current period over the total units expected to be shipped over the remaining term of the collaboration. As of March 31, 2009, we have recognized $2.9 million of these milestones as revenue, of which $1.4 million was recognized during the current period.

Unconsolidated Joint Business Revenue

We have a collaboration with Genentech Inc., or Genentech, a wholly-owned subsidiary of Roche Holdings, Inc., that was created and operates by agreement rather than through a joint venture or other legal entity. Our rights under the terms of our amended and restated collaboration agreement with Genentech include co-exclusive rights to develop, commercialize and market RITUXAN in the U.S. and Canada with Genentech. Genentech has the exclusive right to develop, commercialize and market RITUXAN in the rest of

the world. We have assigned our rights to develop, commercialize and market RITUXAN in Canada to F. Hoffman-La Roche Ltd., or Roche. Genentech shares a portion of the pretax U.S. co-promotion profits with us and Roche shares a portion of the pretax Canadian co-promotion profits of RITUXAN with us.

In the U.S., we contribute resources to selling and the continued development of RITUXAN. Genentech is responsible for worldwide manufacturing of RITUXAN. Genentech also is responsible for the primary support functions for the commercialization of RITUXAN in the U.S. including selling and marketing, customer service, order entry, distribution, shipping and billing. Genentech also incurs the majority of continuing development costs for RITUXAN. Under the arrangement, we have a limited sales force as well as limited development activity.

Under the terms of separate sublicense agreements between Genentech and Roche, Roche is responsible for commercialization of RITUXAN outside the U.S., except in Japan where RITUXAN is co-marketed by Zenyaku Kogyo Co. Ltd., or Zenyaku, and Chugai Pharmaceutical Co. Ltd, or Chugai, an affiliate of Roche. There is no direct contractual arrangement between us and Roche, Zenyaku or Chugai.

Revenues from unconsolidated joint business consists of (1) our share of pretax co-promotion profits in the U.S.; (2) reimbursement of selling and development expense in the U.S.; and (3) revenue on sales of RITUXAN outside the U.S., which consist of our share of pretax co-promotion profits in Canada and royalty revenue on sales of RITUXAN outside the U.S. and Canada by Roche, Zenyaku and Chugai. Pre-tax co-promotion profits are calculated and paid to us by Genentech in the U.S. and by Roche in Canada. Pre-tax co-promotion profits consist of U.S. and Canadian sales of RITUXAN to third-party customers net of discounts and allowances less the cost to manufacture RITUXAN, third-party royalty expenses, distribution, selling, and marketing expenses, and joint development expenses incurred by Genentech, Roche and us.

Revenues from unconsolidated joint business consist of the following (in millions):

                                                                        For the
                                                                     Three Months
                                                                         Ended
                                                                       March 31,
                                                                   2009        2008

 Co-promotion profits in the U.S.                                 $ 179.5     $ 158.0
 Reimbursement of selling and development expenses in the U.S.       15.0        12.7
 Revenue on sales of RITUXAN outside the U.S.                        84.3        76.5

 Total unconsolidated joint business                              $ 278.8     $ 247.2

Co-promotion profits in the U.S. consist of the following (in millions):

                                                                       For the
                                                                    Three Months
                                                                        Ended
                                                                      March 31,
                                                                  2009        2008

 Product revenues, net                                           $ 641.6     $ 604.6
 Costs and expenses                                                180.3       197.2

 Co-promotion profits in the U.S.                                $ 461.3     $ 407.4

 Biogen Idec Inc.'s share of co-promotion profits in the U.S.    $ 179.5     $ 158.0

Net sales of RITUXAN to third-party customers in the U.S. recorded by Genentech for the three months ended March 31, 2009 were $641.6 million compared to $604.6 million in the three months ended March 31, 2008. The increase in sales to third-party customers was primarily due to increased unit sales resulting from continued growth for treatment of B-cell NHL and chronic lymphocytic leukemia (an unapproved and unpromoted use of RITUXAN), increased unit sales for the treatment of rheumatoid arthritis, or RA, and price increases of RITUXAN.

Total collaboration costs and expenses decreased $16.9 million or approximately 8.6%. This change was primarily the result of additional costs incurred during the three months ended March 31, 2008 associated with the development of RITUXAN in RA.

Selling and development expenses incurred by us in the U.S. and reimbursed by Genentech were $15.0 million and $12.7 million for the three months ended March 31, 2009 and 2008, respectively. This increase was primarily due to increased sales and marketing costs.

Revenue on sales of RITUXAN outside the U.S. consists of our share of co-promotion profits in Canada and royalty revenue on sales of RITUXAN outside of the U.S. and Canada. Our royalty revenue on sales of RITUXAN is based on Roche, Zenyaku and Chugai's net sales to third-party customers. We record our royalty revenue and co-promotion profit revenue on sales of RITUXAN outside the U.S. on a cash basis. Revenues on sales of RITUXAN outside the U.S. for the three months ended March 31, 2009 and 2008 were $84.3 million and $76.5 million, respectively. The increase was due to several factors, including increased market penetration.

The royalty period with respect to all products is 11 years from the first commercial sale of such product on a country-by-country basis. For the majority of European countries, the first commercial sale of RITUXAN occurred in the second half of 1998. Therefore, we expect a significant decrease in royalty revenues on sales of RITUXAN outside the U.S. and Canada beginning in the latter half of 2009. Specifically, the royalty period with respect to sales in France, Spain, Germany and the United Kingdom will expire in 2009. As a result, royalty revenue is expected to be in the range of $250.0 million to $290.0 million in 2009. The royalty period with respect to sales in Italy will expire in 2010. The royalty period with respect to sales in other countries will expire through 2012.

Under the amended and restated collaboration agreement, our current pretax co-promotion profit-sharing formula, which resets annually, is as follows:

                                                    Biogen Idec's
                                                      Share of
                                                     Copromotion
                 Co-promotion Operating Profits        Profits

                 First $50 million                          30 %
                 Greater than $50 million                   40 %

In 2009 and 2008, the 40% threshold was met during the first quarter.

Under the collaboration agreement, we have the right to participate with Genentech in the development and commercialization of any anti-CD20 product acquired or developed by Genentech, which we refer to as a New Anti-CD20 Product, as well as the right to participate with Genentech in the development and commercialization of any anti-CD20 product that Genentech licenses from a third party, which we refer to as a Third Party Anti-CD20 Product. Under the terms of the collaboration agreement there are different rights and obligations that apply depending on whether an anti-CD20 product is a New Anti-CD20 Product or a Third Party Anti-CD20 Product. Currently, there is only one New Anti-CD20 Product, ocrelizumab, and only one Third Party Anti-CD20 Product, GA101. Our agreement with Genentech provides that the successful development and commercialization of the first New Anti-CD20 Product will decrease our percentage of co-promotion profits of the collaboration and that we will participate in Third Party Anti-CD20 Products on similar financial terms as for ocrelizumab.

For each calendar year or portion thereof following the approval date of the first New Anti-CD20 Product, the pretax co-promotion profit-sharing formula for RITUXAN and New Anti-CD20 Products sold by us and Genentech will change to the following:

                                                                           Biogen Idec's
                                                                             Share of
                                     First New Anti-CD20 Product U.S.      Co-promotion
Co-promotion Operating Profits             Gross Product Sales                Profits

First $50 million(1)                               N/A                             30 %
Greater than $50 million               Until such sales exceed $150
                                     million in any calendar year(2)               38 %
                                                    Or
                                       After such sales exceed $150
                                       million in any calendar year
                                       until such sales exceed $350
                                     million in any calendar year(3)               35 %
                                                    Or
                                       After such sales exceed $350
                                     million in any calendar year(4)               30 %

(1) not applicable in the calendar year the first New Anti-CD20 Product is approved if $50 million in co-promotion operating profits has already been achieved in such calendar year through sales of RITUXAN.

(2) if we are recording our share of RITUXAN co-promotion profits at 40%, upon the approval date of the first New Anti-CD20 Product, our share of co-promotion profits for RITUXAN and the New Anti-CD20 Product will be immediately reduced to 38% following the approval date of the first New Anti-CD20 Product until the $150 million in first New Anti-CD20 Product sales level is achieved.

(3) if $150 million in first New Anti-CD20 Product sales is achieved in the same calendar year the first New Anti-CD20 Product receives approval, then the 35% co-promotion profit-sharing rate will not be effective until January 1 of the following calendar year. Once the $150 million in first New Anti-CD20 Product sales level is achieved then our share of co-promotion profits for the balance of the year and all subsequent years (after the first $50 million in co-promotion operating profits in such years) will be 35% until the $350 million in first New Anti-CD20 Product sales level is achieved.

(4) if $350 million in first New Anti-CD20 Product sales is achieved in the same calendar year that $150 million in new product sales is achieved, then the 30% co-promotion profit-sharing rate will not be effective until January 1 of the following calendar year (or January 1 of the second following calendar year if the first New Anti-CD20 Product receives approval and, in the same calendar year, the $150 million and $350 million in first New Anti-CD20 . . .