For the Three Months
                                                           Ended September 30,
(In millions, except per share amounts and
percentages)                                        2012           2011        Change %
Total revenues                                  $  1,385.5     $  1,309.9           5.8 %
Income from operations                          $    535.3     $    488.5           9.6 %
Net income attributable to Biogen Idec Inc.     $    398.4     $    351.8          13.2 %
Diluted earnings per share attributable to
Biogen Idec Inc.                                $     1.67     $     1.43          16.7 %

As described below under "Results of Operations," our operating results for the three months ended September 30, 2012 reflect the following:
• Worldwide AVONEX revenues totaled $736.2 million in the third quarter of 2012, representing an increase of 8.0% over the same period in 2011.

• Our share of TYSABRI revenues totaled $274.8 million in the third quarter of 2012, representing a decrease of 0.9% over the same period in 2011.

• Our share of RITUXAN revenues totaled $287.8 million in the third quarter of 2012, representing an increase of 8.0% over the same period in 2011.

• Total cost and expenses increased 7.4% in the third quarter of 2012, compared to the same period in 2011. This increase was primarily the result of a 12.8% increase in cost of sales, a 0.9% increase in research and development expense, and a 14.6% increase in selling, general and administrative costs over the same period in 2011. These increases reflect an increase in manufacturing costs driven by higher sales, spending associated with the development of our early stage product candidates and preparing for the potential launch of BG-12 in 2013.

• Income from operations includes $31.7 million of gain on sale of rights. For additional information related to this transaction, please read Note 3, Gain on Sale of Rights to our condensed consolidated financial statements included within this report.

We generated $1,372.0 million of net cash flows from operations for the three months ended September 30, 2012, which were primarily driven by earnings. Cash, cash equivalents and marketable securities totaled approximately $3,347.3 million as of September 30, 2012.
Business Environment
We conduct our business within the biotechnology and pharmaceutical industries, which are highly competitive. Many of our competitors are working to develop or have commercialized products similar to those we market or are developing, including oral and other alternative formulations that may compete with AVONEX, TYSABRI or other products we are developing. In addition, the commercialization of certain of our own pipeline product candidates, such as BG-12, may negatively impact future sales of AVONEX, TYSABRI or both. We may also face increased competitive pressures from the emergence of biosimilars. In the U.S., AVONEX, TYSABRI, and RITUXAN are licensed under the Public Health Service Act (PHSA) as biological products. In March 2010, U.S. healthcare reform legislation amended the PHSA to authorize the U.S. Food and Drug Administration (FDA) to approve biological products, known as biosimilars, that are similar to or interchangeable with previously approved biological products based upon potentially abbreviated data packages.
Global economic conditions continue to present challenges for our industry. Governments in many international markets where we operate have announced or implemented austerity measures to constrain the overall level of government expenditures. These measures, which include efforts aimed at reforming health care coverage and reducing health care costs, particularly in certain countries in Europe, continue to exert pressure on product pricing, have delayed reimbursement for our products, and have negatively impacted our revenues and results of operations. For additional information about certain risks that could negatively impact our financial position or future results of operations, please read the "Risk Factors" section of this report. The Affordable Care Act
On June 28, 2012, the United States Supreme Court upheld the constitutionality of the Affordable Care Act's mandate to purchase health insurance but rejected specific funding provisions that incentivized states to expand their current Medicaid programs. As a result of this ruling, we currently expect implementation of most of the major provisions of the Act to continue. Changes to the Act, or other federal legislature regarding health care access, financing, or delivery and other actions taken by individual states concerning the possible expansion of Medicaid could impact our financial position or results of operations.
Key Pipeline and Product Development
Long-Lasting Recombinant Factor IX
In September 2012, we announced positive top-line results from the global, Phase
3 "B-LONG" study of our long-lasting hemophilia B product candidate, which is known as rFIXFc (recombinant Factor IX-Fc fusion protein). Hemophilia B is a rare inherited disorder which inhibits blood coagulation. We plan to submit marketing applications for rFIXFc by the first quarter of 2013. BG-12
The FDA has accepted our New Drug Application (NDA) for marketing approval of BG-12 in the United States and granted us a standard review timeline. On October 18, 2012, we announced that the FDA extended the initial PDUFA date for its review of our NDA by three months, which is a standard extension period. The extended PDUFA target date is in late March 2013. The FDA has indicated that the extension of the PDUFA date is needed to allow additional time for review of the application. The agency has not asked for additional studies.
The European Medicines Agency (EMA) has validated our Marketing Authorisation Application (MAA) for review of BG-12 in the European Union and we have submitted additional regulatory applications for BG-12 in Australia, Canada and Switzerland.
AVONEX PEN and Dose Titration
On February 28, 2012, the FDA approved two separate dosing innovations designed to improve the treatment experience for patients receiving once-a-week AVONEX for relapsing forms of MS: AVONEX PEN and a new dose titration regimen. AVONEX PEN, the first intramuscular autoinjector approved for MS, incorporates a smaller needle and easier administration to help reduce patients' anxiety about AVONEX self-injection. Our new dose titration regimen gradually escalates the dose of AVONEX at treatment initiation and reduces the incidence and severity of flu-like symptoms that can occur at the beginning of therapy with any interferon. AVONEX PEN was approved in the E.U. and Canada in the first half of 2011.

Other
We expect to have clinical trial data readouts for our late-stage long-lasting Factor VIII program for hemophilia A in the fourth quarter of 2012, dexpramipexole program for amyotrophic lateral sclerosis (ALS) by late 2012 or early 2013, and PEGylated interferon program for relapsing multiple sclerosis in early 2013.

Results of Operations
Revenues
Revenues are summarized as follows:
                              For the Three Months                               For the Nine Months
                               Ended September 30,                               Ended September 30,
(In millions,
except
percentages)              2012                     2011                     2012                     2011
Product revenues
United States    $   560.2       40.4 %   $   495.9       37.9 %   $ 1,605.6       39.2 %   $ 1,447.0       38.9 %
Rest of world        478.9       34.6 %       479.9       36.6 %     1,485.8       36.3 %     1,392.6       37.4 %
Total product
revenues           1,039.1       75.0 %       975.8       74.5 %     3,091.4       75.4 %     2,839.6       76.3 %
Unconsolidated
joint business       287.8       20.8 %       266.5       20.3 %       857.0       20.9 %       739.1       19.9 %
Other                 58.6        4.2 %        67.7        5.2 %       150.1        3.7 %       143.3        3.9 %
Total revenues   $ 1,385.5      100.0 %   $ 1,309.9      100.0 %   $ 4,098.5      100.0 %   $ 3,721.9      100.0 %

Product Revenues
Product revenues are summarized as follows:
                             For the Three Months                              For the Nine Months
                              Ended September 30,                              Ended September 30,
(In millions,
except
percentages)              2012                    2011                    2012                     2011
AVONEX           $   736.2       70.8 %   $ 681.7       69.9 %   $ 2,159.9       69.9 %   $ 1,983.4       69.8 %
TYSABRI              274.8       26.4 %     277.3       28.4 %       840.7       27.2 %       810.1       28.5 %
Other                 28.1        2.7 %      16.8        1.7 %        90.8        2.9 %        46.1        1.6 %
Total product
revenues         $ 1,039.1      100.0 %   $ 975.8      100.0 %   $ 3,091.4      100.0 %   $ 2,839.6      100.0 %

AVONEX
Revenues from AVONEX are summarized as follows:
                                For the Three Months                       For the Nine Months
                                 Ended September 30,                       Ended September 30,
(In millions, except
percentages)               2012          2011        Change %       2012          2011        Change %
United States          $    462.0     $   410.7         12.5 %   $ 1,326.8     $ 1,207.4          9.9 %
Rest of world               274.2         271.0          1.2 %       833.1         776.0          7.4 %
Total AVONEX revenues  $    736.2     $   681.7          8.0 %   $ 2,159.9     $ 1,983.4          8.9 %

For the three months ended September 30, 2012, compared to the same period in 2011, the increase in U.S. AVONEX revenues was due to price increases and a 1% increase in U.S. AVONEX unit sales volume.
For the nine months ended September 30, 2012, compared to the same period in 2011, the increase in U.S. AVONEX revenues was due to price increases offset by a 3% decrease in U.S. AVONEX unit sales volume.
For the three and nine months ended September 30, 2012, compared to the same periods in 2011, the increase in rest of world AVONEX revenues was due to increased demand primarily in Europe driven by customer penetration attributable to the AVONEX PEN launch and gains recognized in relation to the settlement of certain cash flow hedge instruments under our foreign currency hedging program. These increases were partially offset by the negative impact of foreign currency exchange

rates and pricing reductions resulting from austerity measures enacted in some countries. Rest of world AVONEX unit volume primarily in Europe increased 8% and 9%, respectively, for the three and nine months ended September 30, 2012, over the prior year comparative periods. Gains recognized in relation to the settlement of certain cash flow hedge instruments under our foreign currency hedging program totaled $8.6 million and $22.5 million, respectively, for the three and nine months ended September 30, 2012, compared to losses recognized of $8.7 million and $30.9 million, respectively, in the prior year comparative periods.
We expect AVONEX to continue facing increased competition in the MS marketplace in both the U.S. and rest of world. We and a number of other companies are working to develop or have commercialized additional treatments for MS, including oral and other alternative formulations that may compete with AVONEX. In addition, the continued growth of TYSABRI and the commercialization of certain of our own pipeline product candidates, such as BG-12, may negatively impact future sales of AVONEX. Increased competition also may lead to reduced unit sales of AVONEX, as well as increasing price pressure.

TYSABRI
We collaborate with Elan Pharma International, Ltd (Elan) an affiliate of Elan
Corporation, plc, on the development and commercialization of TYSABRI. For
additional information related to this collaboration, please read Note 20,
Collaborations to our consolidated financial statements included within our 2011
Form 10-K.
Revenues from TYSABRI are summarized as follows:
                                       For the Three Months               For the Nine Months
                                        Ended September 30,               Ended September 30,
(In millions, except percentages)   2012       2011     Change %      2012       2011     Change %
United States                     $  98.2    $  85.2      15.3  %   $ 278.8    $ 239.6      16.4  %
Rest of world                       176.6      192.1      (8.1 )%     561.9      570.5      (1.5 )%
Total TYSABRI revenues            $ 274.8    $ 277.3      (0.9 )%   $ 840.7    $ 810.1       3.8  %

For the three and nine months ended September 30, 2012, compared to the same periods in 2011, the increase in U.S. TYSABRI revenues was due to increased unit sales volume and price increases. U.S. TYSABRI unit sales volume increased approximately 10% for the three and nine months ended September 30, 2012, over the prior year comparative periods. Net sales of TYSABRI from our collaboration partner, Elan, to third-party customers in the U.S. for the three and nine months ended September 30, 2012 totaled $230.4 million and $642.9 million, respectively, compared to $197.2 million and $550.1 million, respectively, in the prior year comparative periods.
For the three and nine months ended September 30, 2012, compared to the same periods in 2011, the decrease in rest of world TYSABRI revenues reflects the deferral of a portion of our revenues recognized on sales of TYSABRI in Italy (as described below), the negative impact of foreign currency exchange rates, net of hedging gains and pricing reductions from austerity measures enacted in some countries, offset by an increase in demand. Increased demand resulted in an increase of approximately 8% and 14%, respectively, in rest of world TYSABRI unit sales volume for the three and nine months ended September 30, 2012. The change in rest of world TYSABRI revenues for the three and nine months ended September 30, 2012, compared to the same periods in 2011, also reflects gains recognized in relation to the settlement of certain cash flow hedge instruments under our foreign currency hedging program. Gains recognized in relation to the settlement of certain cash flow hedge instruments under our foreign currency hedging program totaled $3.4 million and $8.5 million, respectively, for the three and nine months ended September 30, 2012, compared to losses recognized of $2.1 million and $6.7 million, respectively, for the three and nine months ended September 30, 2011.
In the fourth quarter of 2011, Biogen Idec SRL received a notice from the Italian National Medicines Agency (AIFA) stating that sales of TYSABRI for the period from February 2009 through February 2011 exceeded by EUR30.7 million a reimbursement limit established pursuant to a Price Determination Resolution (Price Resolution) granted by AIFA in February 2007. In December 2011, we filed an appeal against AIFA in administrative court seeking a ruling that the reimbursement limit does not apply and that the position of AIFA is unenforceable. As a result of being notified that AIFA believes a reimbursement limit is in effect, we have deferred $46.6 million and $13.8 million of revenue of TYSABRI made in Italy during the first nine months of 2012 and fourth quarter of 2011, respectively. We expect to continue to defer a portion of our revenues on future sales of TYSABRI in Italy until this matter is resolved. For additional information, please read Note 20, Litigation to our condensed consolidated financial statements included within this report.
We expect TYSABRI to continue facing increased competition in the MS marketplace in both the U.S. and rest of world. We and a number of other companies are working to develop or have commercialized additional treatments for MS, including oral and other alternative formulations that may compete with TYSABRI. The commercialization of certain of our own pipeline product candidates, such as BG-12, also may negatively impact future sales of TYSABRI. Increased competition may also lead

to reduced unit sales of TYSABRI, as well as increasing price pressure. In addition, safety warnings included in the TYSABRI label, such as the risk of progressive multifocal leukoencephalopathy (PML), and any future safety-related label changes, may limit the growth of TYSABRI unit sales. We continue to research and develop protocols and therapies that may reduce risk and improve outcomes of PML in patients. Our efforts to stratify patients into lower or higher risk for developing PML, including through the JCV antibody assay, and other on-going or future clinical trials involving TYSABRI may have a negative impact on prescribing behavior, which may result in decreased product revenues from sales of TYSABRI.
Other Product Revenues
Other product revenues are summarized as follows:

                                      For the Three Months             For the Nine Months
                                       Ended September 30,             Ended September 30,
(In millions, except percentages)  2012      2011     Change %     2012      2011     Change %
FAMPYRA                           $ 12.2    $    -        **      $ 46.9    $    -        **
FUMADERM                            15.9      13.6      16.9  %     43.9      41.2       6.6  %

We have a license from Acorda Therapeutics, Inc. (Acorda) to develop and commercialize FAMPYRA in all markets outside the U.S. In July 2011, the European Commission granted a conditional marketing authorization, renewable annually, for FAMPYRA in the E.U. This marketing authorization was renewed as of July 2012. To meet the conditions of this marketing authorization, we will provide additional data from on-going clinical studies regarding FAMPYRA's benefits and safety in the long term. FAMPYRA is the first treatment that addresses the unmet medical need of walking improvement in adult patients with MS who have walking disability. We have launched FAMPYRA in Australia, Canada and a number of European countries and expect to launch the product in additional countries throughout the remainder of 2012.
In 2011, the German government implemented new legislation to manage pricing related to new drug products introduced within the German market through a review of each product's comparative efficacy. We launched FAMPYRA in Germany in August 2011. During the second quarter of 2012, the government agency completed its comparative efficacy assessment of FAMPYRA indicating a range of pricing below our initial launch price, which was unregulated for the first 12 months after launch consistent with German law. We entered into pricing negotiations in the third quarter of 2012. As a result, during the quarter, we began recognizing revenue based on the lowest point of the initially indicated German pricing authority range.
For information about our relationship with Acorda, please read Note 20, Collaborations to our consolidated financial statements included within our 2011 Form 10-K.

Unconsolidated Joint Business Revenues
We collaborate with Genentech on the development and commercialization of RITUXAN. For information about our relationship with Genentech, including information regarding the pre-tax co-promotion profit sharing formula for RITUXAN and its impact on future unconsolidated joint business revenues, please read Note 20, Collaborations to our consolidated financial statements included within our 2011 Form 10-K.
Revenues from unconsolidated joint business are summarized as follows: