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," "may," "plan," "project," "target," "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, liabilities, the impact of competitive products, the incidence, outcome or impact of litigation, proceedings related to patents and other intellectual property rights, tax assessments and other legal proceedings, our effective tax rate for future periods, the impact of accounting standards, the development and timing of programs in our clinical pipeline, our ability to finance our operations, meet our manufacturing needs and source 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. Important factors which could cause actual results to differ from our expectations and which could negatively impact our financial position 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

Business Overview

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. Our business strategy is focused on discovering and developing first-in-class or best-in-class products that we can deliver to specialty markets globally. Patients around the world benefit from Biogen Idec's significant products that address medical needs in the areas of neurology, oncology and immunology.

We currently have four marketed products. Our marketed products are used for the treatment of multiple sclerosis, or MS, non-Hodgkin's lymphoma, or NHL, rheumatoid arthritis, or RA, Crohn's disease and psoriasis, and are summarized in the table below.

      Product                                            Indications
      AVONEX®                                            Relapsing MS
      (interferon beta-1a)

      RITUXAN®*                                          Certain B-cell NHL
      (rituximab)                                        RA

      TYSABRI®**                                         Relapsing MS
      (natalizumab)                                      Crohn's disease

      FUMADERMTM                                         Severe psoriasis
      (dimethylfumarate and monoethylfumarate salts)

* Outside the United States, Canada and Japan, MabThera is the trade name for rituximab. We refer to rituximab, RITUXAN and MabThera collectively as RITUXAN.

** TYSABRI is indicated in the United States for the treatment of some patients with moderately to severely active Crohn's disease.

As part of our on-going development efforts, we are seeking to expand our marketed products into treatment of other diseases, such as chronic lymphocytic leukemia, or CLL, ANCA-associated vasculitis, multiple myeloma and ulcerative colitis. In addition to the on-going development of our marketed products, we continue to focus our research and development efforts on finding novel therapeutics in areas of high unmet medical needs, both within our current focus areas of neurology, oncology, immunology and cardiology, as well as in new therapeutic areas.

Financial Highlights

The following table is a summary of results achieved for the three months ended
September 30, 2009 and 2008:


                                                                      For the Three Months Ended September 30,
(In millions, except per share amounts and percentages)             2009                  2008              Change %

Total revenues                                                 $       1,120.5       $       1,093.0              2.5 %
Income from operations                                         $         384.2       $         345.9             11.1 %
Net income attributable to Biogen Idec Inc.                    $         277.7       $         206.8             34.3 %
Diluted earnings per share attributable to Biogen Idec Inc.    $          0.95       $          0.70             35.7 %

As described below under Results of Operations, our operating results for the three months ended September 30, 2009 were primarily driven by:

• Continued TYSABRI growth. TYSABRI provided $207.0 million of revenue during the third quarter 2009, representing an increase of 20.9% over the same period in the prior year.

• Increased AVONEX worldwide revenue. Total AVONEX revenues totaled $580.0 million in the current period, representing a 1.1% increase over the prior year comparable period.

• $283.9 million in revenues from our unconsolidated joint business; driven by net sales of RITUXAN to third-party customers in the United States recorded by Genentech totaling $670.4 million during the current period, representing a 2.3% increase over the same period in 2008. Our share of co-promotion profits of RITUXAN in the United States totaled $203.3 million for the third quarter of 2009, representing an increase of 5.8% over the same period in the prior year. These amounts were offset by a $25.2 million decrease in our share of co-promotion profits in Canada and royalty revenues on sales of RITUXAN outside of the United States primarily driven by royalty expirations in our rest of world markets.

• Excluding the impact of amortization related to our acquired intangible assets, total costs and expenses increased 5.0% as compared to the prior year comparable period. This increase was driven by a 13.1% increase in research and development spending primarily related to the continued advancement of our pipeline and a 39.4% increase in collaboration profit sharing expense due to TYSABRI growth. These increases were partially offset by a 13.0% decrease in costs of sales and a reduction in selling, general and administrative expense of 2.6%. Amortization of acquired intangible assets decreased 45.6% which is further described within in Note 4, Intangible Assets and Goodwill, in "Notes to Consolidated Financial Statements". Including amortization of acquired intangible assets, total costs and expenses decreased 1.4% over the same period in the prior year.

In addition to the strong operating results achieved for the three months ended September 30, 2009, year to date we generated $792.7 million of net cash flows from operations, which are primarily driven by increases in our earnings.

Cash and cash equivalents and marketable securities totaled approximately $2,905.1 million as of September 30, 2009.

Business Highlights

• On October 19, 2009, our Board of Directors authorized the repurchase of our common stock in an amount of up to $1.0 billion. This is in addition to the 6.0 million shares remaining from our previous share repurchase authorization. We have used the prior share repurchase program principally for share stabilization. This new $1.0 billion authorization is intended to reduce our shares outstanding, with the objective of returning excess cash to shareholders. The Company intends to retire these shares following repurchase on the open market. This repurchase program does not have an expiration date.

• On September 21, 2009, we commenced a tender offer to acquire all of the outstanding shares of Facet Biotech, or Facet, for approximately $356.0 million or $14.50 per share in cash. On October 16, 2009, we extended the tender offer to December 16, 2009, unless otherwise extended. The tender offer was previously set to expire on October 19, 2009. The offer price remained unchanged at $14.50 per share in cash. Our all-cash proposal is not subject to any financing contingency or approval by Biogen Idec shareholders.

Under our current collaboration agreement with Facet, we have been jointly developing daclizumab for the treatment of relapsing multiple sclerosis and volociximab for the treatment of solid tumors. Refer to Note 14, Collaborations, in "Notes to Consolidated Financial Statements", for additional discussion.

• On July 1, 2009, we made a $110.0 million upfront payment to Acorda Therapeutics, Inc., or Acorda, pursuant to our June 30, 2009 collaboration and license agreement to develop and commercialize products containing Fampridine-SR in markets outside the United States.

Product and Pipeline Highlights

• We currently believe that the risk of developing PML increases with the number of TYSABRI infusions received. We continue to believe the overall rate of developing PML with TYSABRI therapy remains consistent with the rate implied in the label. We have proposed and are currently discussing with regulatory authorities a potential label change to reflect this increased risk of PML with increased duration of TYSABRI exposure.

• On October 19, 2009, Biovitrum AB and we announced plans to advance the companies' long-acting, fully-recombinant Factor IX Fc fusion protein (rFIXFc) into a registrational clinical trial in hemophilia B patients. The decision to advance the program was based on data from a Phase 1/2a open-label, multi-center, safety dose-escalation and pharmacokinetic study of intravenous rFIXFc in severe, previously treated hemophilia B patients. rFIXFc was well tolerated in the study. In addition, rFIXFc demonstrated a prolonged half-life compared to historical data for existing therapies, supporting advancement of the program.

• We and Genentech, Inc., or Genentech, a member of the Roche Group, previously submitted a supplemental Biologics License Application, or sBLA, to the U.S. Food and Drug Administration, or FDA, seeking to extend the RITUXAN label to a broader DMARD-IR population. On October 16, 2009, the FDA issued a Complete Response expressing concern related to the prolonged nature of RITUXAN-mediated B-cell depletion and the risk for PML in a less refractory RA population than that covered by our current label. We expect to meet with the FDA to discuss risk-benefit for RITUXAN in a less refractory RA population and determine the appropriate next steps.

• In September 2009, we were issued U.S. patent no. 7,588,755 for the use of beta interferon for immunomodulation or treating a viral condition, viral disease, cancers or tumors. The patent expires in September 2026. This patent covers the treatment of multiple sclerosis with AVONEX, which is our brand of recombinant beta interferon.

• In September 2009, Genentech and we announced that a Phase 3 study (PRIMA) met its endpoint during a pre-planned interim analysis, and the study was stopped early on the recommendation of an independent data and safety monitoring board. The primary endpoint was progression-free survival of patients with follicular lymphoma who continued receiving RITUXAN alone after responding to RITUXAN and

chemotherapy compared to those who did not continue to receive RITUXAN. The safety profile of RITUXAN observed in the study was consistent with that previously reported.

• In August 2009, Facet announced its continued plans for the Phase 3 trial of daclizumab high-yield process in MS and that it would request a Special Protocol Assessment from the FDA prior to the initiation of this study. The Phase 3 trial is expected to begin during the first half of 2010. Upon enrollment of the first patient into the Phase 3 study, Facet would receive a $30.0 million milestone payment from us.

• In July 2009, the FDA granted PEGylated interferon beta-1a Fast Track designation for relapsing MS. We are currently enrolling patients in a global Phase 3 study evaluating the efficacy and safety of either bi-weekly or once-monthly injections of PEGylated interferon beta-1a in this patient population. The FDA's Fast Track program is designed to expedite the review of new drugs that are intended to treat serious or life-threatening conditions and demonstrate the potential to address unmet medical needs.

• In July 2009, Cardiokine enrolled the 300th patient in the Phase 3 clinical trial for Lixivaptan. We made a $20.0 million payment to Cardiokine upon achievement of this milestone which was included within research and development expense in the quarter ended September 30, 2009.

• Acorda previously announced that the European Medicines Agency, or EMEA, notified Acorda that Fampridine-SR is eligible to be submitted for a Marketing Authorization Application via the EMEA's Centralized Procedure as a new active substance.

Additional information about our product pipeline appears under the heading "Research and Development" in Management's Discussion and Analysis of Financial Condition and Results of Operations of this quarterly report on Form 10-Q.

Results of Operations

Revenues

Revenues were as follows:


                                            For the Three Months Ended September 30,                    For the Nine Months Ended September 30,
(In millions, except percentages)                2009                          2008                         2009                          2008

Product revenues
United States                        $      407.8            36.4 %   $   380.6         34.8 %   $    1,223.9           37.7 %   $ 1,084.8         35.8 %
Rest of world                               393.9            35.2 %       377.7         34.6 %        1,102.2           33.9 %     1,023.0         33.8 %

Total product revenues               $      801.7            71.6 %   $   758.3         69.4 %   $    2,326.1           71.6 %   $ 2,107.8         69.6 %
Unconsolidated joint business               283.9            25.3 %       299.0         27.3 %          838.3           25.8 %       825.0         27.2 %
Other revenues                               34.9             3.1 %        35.7          3.3 %           85.9            2.6 %        95.8          3.2 %

Total revenues                       $    1,120.5           100.0 %   $ 1,093.0        100.0 %   $    3,250.3          100.0 %   $ 3,028.6        100.0 %

Product Revenues

Product revenues were as follows:


                                            For the Three Months Ended                         For the Nine Months Ended
                                                   September 30,                                     September 30,
(In millions, except percentages)          2009                    2008                     2009                      2008

AVONEX                              $ 580.0        72.3 %   $ 573.5        75.6 %   $ 1,726.5        74.2 %   $ 1,636.8        77.7 %
TYSABRI                               207.0        25.8 %     171.2        22.6 %       559.8        24.1 %       433.0        20.5 %
FUMADERM                               12.6         1.6 %      11.1         1.5 %        35.4         1.5 %        32.8         1.6 %
Other                                   2.1         0.3 %       2.5         0.3 %         4.4         0.2 %         5.2         0.2 %

Total product revenues              $ 801.7       100.0 %   $ 758.3       100.0 %   $ 2,326.1       100.0 %   $ 2,107.8       100.0 %

AVONEX

We currently market and sell AVONEX for the treatment of relapsing MS, including
patients with a first clinical episode and MRI features consistent with MS.
AVONEX has been shown in clinical trials in relapsing MS both to slow the
accumulation of disability and to reduce the frequency of flare-ups.

Revenues from AVONEX were as follows:


                                          For the Three Months Ended                   For the Nine Months Ended
                                                 September 30,                               September 30,
(In millions, except percentages)      2009           2008        Change %         2009          2008         Change %

AVONEX
United States                       $    348.5       $ 321.9            8.3 %    $ 1,054.2     $   935.9           12.6 %
Rest of world                            231.5         251.6           (8.0 )%       672.3         700.9           (4.1 )%

Total AVONEX revenues               $    580.0       $ 573.5            1.1 %    $ 1,726.5     $ 1,636.8            5.5 %

The increase in revenues from the sales of AVONEX in the United States for both the three and nine months ended September 30, 2009, as compared to the prior year comparative periods, was primarily due to price increases, partially offset by decreased patient demand and participation in our AVONEX Access Program, which provides free product to eligible patients.

Revenues from the sale of AVONEX within our rest of world markets decreased for both the three and nine months ended September 30, 2009, as compared to the same periods in the prior year, primarily due to the negative impact of foreign currency exchange rate changes, partially offset by price increases and increased patient demand.

We expect to face increasing competition in the MS marketplace in both the United States and rest of world from existing and new MS treatments, including oral and other alternative formulations developed by our competitors, the continued growth of TYSABRI and the commercialization of our other pipeline product candidates, 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

In August 2000, we entered into a collaboration agreement with Elan Pharma International, Ltd, or Elan, an affiliate of Elan Corporation, plc. 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. TYSABRI is sold as a monotherapy treatment for relapsing MS to slow the progression of disability and reduce the frequency of clinical relapses.

TYSABRI is marketed under risk management or minimization plans as agreed to with local regulatory authorities. In the United States, TYSABRI was reintroduced with a risk minimization action plan known as

the TOUCH Prescribing Program, a rigorous system intended to educate physicians and patients about the risks involved and help assure appropriate use of the product. Since the reintroduction of TYSABRI to the market in July 2006, we have disclosed cases of progressive multifocal leukoencephalopathy, or PML, a known side effect, in patients taking TYSABRI in the post-marketing setting. We currently believe that the risk of developing PML increases with the number of TYSABRI infusions received. We continue to believe the overall rate of developing PML with TYSABRI therapy remains consistent with the rate implied in the label. We have proposed and are currently discussing with regulatory authorities a potential label change to reflect this increased risk of PML with increased duration of TYSABRI exposure.

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 outcome of PML in patients being treated with TYSABRI. We believe that the reported cases of PML have slowed the growth of TYSABRI in both the United States and rest of world.

In the United States, we sell TYSABRI to Elan who sells the product to third party distributors. Our sales price to Elan in the United States is set prior to the beginning of each quarterly period to effect an approximate equal sharing of the gross margin on sales in the United States between Elan and us. We recognize revenue for sales of TYSABRI in the United States upon Elan's shipment of the product to the third party distributors. In the rest of world markets, we are responsible for distributing TYSABRI to customers and are primarily responsible for all operating activities. We recognize revenue for sales of TYSABRI in the rest of world at the time of product delivery to our customers.

Revenues from TYSABRI were as follows:

                                          For the Three Months Ended                  For the Nine Months Ended
                                                 September 30,                              September 30,
(In millions, except percentages)      2009           2008        Change %        2009           2008        Change %

TYSABRI
United States                       $     59.3       $  56.2            5.5 %   $   169.7       $ 144.0           17.8 %
Rest of world                            147.7         115.0           28.4 %       390.1         289.0           35.0 %

Total TYSABRI revenues              $    207.0       $ 171.2           20.9 %   $   559.8       $ 433.0           29.3 %

The increase in revenues from the sale of TYSABRI in the United States, as compared to the prior year comparative periods, during the three and nine months ended September 30, 2009, were primarily due to an increase in number of patients using TYSABRI in the United States.

Net sales of TYSABRI from our collaboration partner, Elan, to third-party customers in the United States for the three and nine months ended September 30, 2009 totaled $130.7 million and $371.1 million, respectively, as compared to $121.5 million and $307.0 million, respectively, in the prior year comparative periods.

Rest of world sales of TYSABRI for the three and nine months ended September 30, 2009, increased as compared to the same periods in the prior year, primarily due to an increase in number of patients using TYSABRI in the United States, partially offset by the negative impact of foreign currency exchange rate changes. TYSABRI rest of world revenues for the three and nine months ended September 30, 2009 also include losses of $4.2 million recognized in relation to the settlement of certain cash flow hedge instruments.

In accordance with our collaboration agreement, Elan has paid to us milestone payments totaling $125.0 million. We have recorded these amounts as deferred revenue upon receipt which is being recognized as product revenue in our consolidated statements 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. The following table summarizes the amount of these milestone payments recognized as revenue for the three and nine months ended September 30, 2009 and 2008:

                                            For the Three Months Ended                     For the Nine Months Ended
                                                  September 30,                                  September 30,
(In millions, except percentages)      2009             2008         Change %         2009             2008         Change %

Revenue recognized from milestone
payments                            $      1.9       $      0.6          216.7 %   $      5.1       $      0.6          750.0 %

Unconsolidated Joint Business Revenue

We collaborate with Genentech on the development and commercialization of RITUXAN which is approved for treating certain B-cell NHL and RA. While Genentech is responsible for the worldwide manufacturing of RITUXAN, development and commercialization rights and responsibilities under this collaboration are divided between us and Genentech as described in Note 14, Collaborations, in "Notes to Consolidated Financial Statements"

Revenues from unconsolidated joint business consists of (1) our share of pretax co-promotion profits in the United States; (2) reimbursement of selling and development expense in the United States; and (3) revenue on sales of RITUXAN outside the United States, which consist of our share of pretax co-promotion profits in Canada and royalty revenue on sales of RITUXAN outside the United States and Canada by F. Hoffmann-La Roche Ltd., or Roche, Zenyaku Kogyo, Inc., or Zenyaku and Chugai Pharmaceutical Co. Ltd., or Chugai, an affiliate of Roche. Pre-tax co-promotion profits are calculated and paid to us by Genentech in the United States and by Roche in Canada. Pre-tax co-promotion profits consist of United States 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, and joint development expenses incurred by Genentech, Roche and us.

The following table provides a summary of revenues from unconsolidated joint business for the three and nine months ended September 30, 2009 and 2008, respectively:

                                            For the Three Months Ended                       For the Nine Months Ended
                                                  September 30,                                    September 30,
(In millions, except percentages)      2009            2008         Change %           2009             2008         Change %

Biogen Idec Inc.'s share of
co-promotion profits in the
United States                       $     203.3     $    192.2             5.8 %    $     581.3      $    527.9            10.1 %
Reimbursement of selling and
development expense in the United
States                                     15.8           16.8            (6.0 )%          47.5            45.4             4.6 %
Revenue on sales of RITUXAN
outside the United States                  64.8           90.0           (28.0 )%         209.5           251.7           (16.8 )%

Total unconsolidated joint
business revenues                   $     283.9     $    299.0            (5.1 )%   $     838.3      $    825.0             1.6 %

Biogen Idec Inc.'s Share of Co-promotion Profits in the United States

The following table provides a summary of amounts comprising our share of
co-promotion profits in the United States:

. . .