v3.26.1
Acquisitions
 6 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Acquisitions
Note 2:
Acquisitions
Apellis Pharmaceuticals, Inc.
On May 14, 2026, we completed the acquisition of all of the issued and outstanding shares of Apellis, a commercial-stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic compounds to treat diseases with high unmet needs. As a result of this acquisition we acquired two FDA-approved products from Apellis: SYFOVRE (pegcetacoplan injection) for the treatment of GA, an immune-mediated retinal disease; and EMPAVELI (pegcetacoplan) for the treatment of PNH, a rare blood disorder, and C3G and primary IC-MPGN, rare immune-mediated kidney diseases. The addition of Apellis is expected to enhance our short- and long-term revenue growth profile by adding two commercialized, differentiated, specialized immunology products to our growth portfolio.
Under the terms of this acquisition, Apellis shareholders were entitled to $41.00 in cash for each issued and outstanding Apellis share, which totaled approximately $5.3 billion, and one contractual, non-transferable contingent value right per share representing the right to receive contingent cash payments of up to an aggregate of $4.00 per share in cash, subject to the achievement of specified annual global net sales thresholds for SYFOVRE. In addition, the total purchase price included approximately $70.7 million of future consideration attributable to pre-acquisition services.
We funded this acquisition of Apellis with available cash and marketable securities on hand, supplemented by the issuance of a $2.0 billion term loan under our 2026 Term Loan and a $400.0 million drawdown from our revolving credit facility.
For additional information on our 2026 Term Loan, please read Note 12, Indebtedness, to these condensed consolidated financial statements.
We accounted for this acquisition as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, and recorded assets acquired and liabilities assumed at their respective fair values as of the acquisition date.
Purchase Price Consideration
Total consideration transferred for the acquisition of Apellis is summarized as follows:
(In millions)
As of May 14, 2026
Cash consideration paid/payable to Apellis shareholders$5,406.0 
Contingent consideration(1)
4.1 
Total consideration$5,410.1 
(1) Contingent consideration represents the fair value of CVRs that are subject to the achievement of specified annual global net sales thresholds for SYFOVRE.
Apellis Compensation Expense: In connection with our acquisition, we converted Apellis's outstanding unvested equity awards into cash awards totaling $416.3 million. These awards will vest over the remaining requisite service periods of the original awards and are payable only if the applicable service conditions are satisfied, unless accelerated under specified termination provisions.
Of the total $416.3 million, approximately $70.7 million was attributable to pre-acquisition services and is therefore reflected as a component of total purchase price paid. The remaining $345.6 million is attributable to the post-acquisition service period, of which approximately $116.0 million was recognized at transaction close for employees who were immediately terminated upon the acquisition close date. The remaining cash awards will be recognized over the employees' remaining service vesting period; if any of these employees are terminated subsequent to the acquisition date and prior to the estimated service vesting period, all compensation expense not previously recognized will be accelerated due to a double-trigger provision, resulting in immediate recognition.
Preliminary Purchase Price Allocation
The following table summarizes the preliminary purchase price allocation of the separately identifiable assets acquired and liabilities assumed as of May 14, 2026:
(In millions)
Amounts Recognized as of Acquisition Date
May 14, 2026
Cash and cash equivalents$310.7 
Accounts receivable384.4 
Inventory712.0 
Other current assets46.1 
Intangible assets (completed technology)4,630.0 
Operating lease assets12.5 
Accounts payable(32.9)
Accrued expense and other(117.4)
Senior secured term loan(395.2)
Convertible note(101.5)
Operating lease liabilities(18.1)
Deferred tax liability(522.1)
Other, net0.1 
Total identifiable net assets4,908.6 
Goodwill501.5 
Total assets acquired and liabilities assumed$5,410.1 
Inventory: Total inventory acquired was approximately $712.0 million, which reflects a step-up in the fair value of finished goods and work-in-process inventory for SYFOVRE and EMPAVELI. The fair value was determined based on the estimated selling price of the inventory, less the remaining manufacturing and selling costs and a normal profit margin on those manufacturing and selling efforts. The fair value step-up adjustment will be amortized to cost of sales within our condensed consolidated statements of income when the inventory is sold, which is expected to be within approximately 3 years from the acquisition date.
Intangible assets: Intangible assets are comprised of $2.4 billion related to EMPAVELI commercialization rights in the U.S., $1.9 billion related to SYFOVRE commercialization rights and $380.0 million related to royalty rights associated with Sobi sales of EMPAVELI outside the U.S. under the brand name ASPAVELI. The estimated fair values of the program related intangible assets were determined using the multi-period excess earnings method and discounted cash flow method, forms of the income approach, and a discount rate of 13.25%. These fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 fair value measurements.
The more significant assumptions utilized in our asset valuations related to commercialization rights included the estimated net cash flows for each year for each asset, including total revenue, cost of sales, research and development and other operating expense, the potential regulatory and commercial success risks, as well as other factors.
The more significant assumptions utilized in our asset valuation related to royalty rights included our estimated timing and volume of ASPAVELI sales by Sobi outside the U.S.
Senior secured term loan: In connection with our acquisition of Apellis we assumed responsibility for a senior secured term loan facility with Sixth Street Lending Partners of approximately $395.2 million, relating to the outstanding principal balance as of the acquisition date, accrued interest and prepayment fees incurred as a result of settling the term loan prior to its contractual maturity. We funded a post-close repayment of the senior secured term loan facility prior to its contractual maturity. As of June 30, 2026, the senior secured term loan was paid in full.
Convertible notes: In connection with our acquisition of Apellis we assumed the obligation for outstanding convertible notes of approximately $101.5 million, that upon the close of the acquisition would allow holders the option to convert notes into cash consideration. As of June 30, 2026, the outstanding convertible notes were paid in full with the exception of a de minimis amount. Our subsequent repayment represented a post-acquisition debt extinguishment.
Goodwill: Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. We recognized goodwill of approximately $501.5 million, which is not deductible for tax purposes. The goodwill recognized from our acquisition of Apellis is primarily the result of the deferred tax consequences from the transaction recorded for financial statement purposes.
Acquisition-related expense: Acquisition-related expense, which was comprised primarily of regulatory, advisory and legal fees, and other transaction costs, totaled approximately $27.0 million and $30.8 million for the three and six months ended June 30, 2026, respectively, and are included within selling, general and administrative expense within our condensed consolidated statements of income.
Assumptions in the Allocations of Purchase Price
The results of operations of Apellis, along with the estimated fair values of the assets acquired and liabilities assumed in the Apellis acquisition, have been included in our condensed consolidated financial statements since the closing of the Apellis acquisition on May 14, 2026.
The Apellis operations had an immaterial impact to our results of operations for the three and six months ended June 30, 2026. Due to the immateriality of Apellis' revenues and expenses, additional pro forma information combining the results of operations of Biogen and Apellis have not been included.
Our preliminary estimate of the fair value of the specifically identifiable assets acquired and liabilities assumed as of the date of acquisition is subject to the finalization of management's analysis related to certain matters, including finalizing our assessment of the intangible assets, inventory, R&D programs, goodwill, leases, contingencies, and income taxes. The final determination of these fair values will be completed as additional information becomes available but no later than one year from the acquisition date. The final determination may result in asset and liability fair values that are different from the preliminary estimates.
TJ Biopharma (Hangzhou) Co., Ltd.
In April 2026 we entered into an asset purchase agreement with TJ Biopharma (Hangzhou) Co., Ltd. to acquire TJ Bio's exclusive rights to felzartamab in the greater China region. With this agreement, we own exclusive worldwide rights to felzartamab.
Under the terms of this agreement we made an upfront payment of $100.0 million to TJ Bio, which was recorded in acquired in-process research and development, upfront and milestone expense within our condensed consolidated statements of income for the three and six months ended June 30, 2026.
TJ Bio will also be eligible to receive potential commercial and sales milestone payments of up to $20.0 million and $730.0 million, respectively, if all specified milestones set forth in this collaboration are achieved. In addition, we may pay TJ Bio tiered royalties on potential net sales of felzartamab in the greater China region in the mid-single digit to low-double digit percentages.
Additionally, we assumed regulatory and sales milestone obligations under a pre-existing agreement between TJ Bio and MorphoSys (a wholly-owned subsidiary of Novartis) and may pay MorphoSys tiered royalties on potential net sales of felzartamab in the greater China region.
Alcyone Therapeutics, Inc.
In November 2025 we completed the acquisition of all of the issued and outstanding shares of Alcyone Therapeutics, Inc., a clinical-stage biotechnology company focused on pediatric care through precision CNS therapeutics and dosing platforms. The lead asset acquired is ThecaFlex DRx, an implantable subcutaneous port and catheter device being investigated for the intrathecal delivery of ASOs, including SPINRAZA.
Total consideration for this transaction of approximately $85.0 million was recorded in acquired in-process research and development, upfront and milestone expense within our consolidated statements of income for the year ended December 31, 2025, and included a $35.0 million payment that was considered probable as of December 31, 2025, and made upon FDA approval of a supplemental application in January 2026.
We may pay additional development and regulatory milestone payments to the former shareholders of Alcyone of up to a total of $75.0 million if approval is received for ThecaFlex DRx administration of SPINRAZA or other additional pipeline products.
We accounted for this transaction as an asset acquisition as the value being acquired primarily relates to a single asset. Under the terms of this acquisition, we will oversee the end-to-end development, manufacturing and commercialization of ThecaFlex DRx.
Alcyone's remaining therapeutic assets were divested from Alcyone into Neela Therapeutics, Inc., a newly formed independent company, prior to the closing of this acquisition.
RayThera Inc.
In June 2026 we entered into a definitive agreement to acquire all of the issued and outstanding shares of RayThera Inc., a private biotechnology company focused on discovering and developing small molecule therapies in immunology. RayThera's portfolio includes a lead program which entered Phase 1 development during the third quarter of 2026 and other anti-inflammatory assets that could potentially treat immune-mediated conditions across a range of indications.
We have agreed to pay an upfront cash payment of $225.0 million upon closing, plus additional potential amounts payable upon the achievement of future clinical and regulatory milestones totaling $775.0 million.
We plan to account for this proposed acquisition as an asset acquisition as the value being acquired primarily relates to the lead program and will record the upfront payment in acquired in-process research and development, upfront and milestone expense within our condensed consolidated statements of income upon the completion of this proposed acquisition. We anticipate the proposed acquisition to close during the third quarter of 2026, subject to the satisfaction of customary closing conditions. Under the terms of this proposed acquisition, we will lead future development, manufacturing and global commercialization efforts.
The proposed acquisition excludes certain preclinical assets, which will be divested from RayThera into a newly formed independent company prior to the expected closing of this acquisition.