10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-12042

BIOGEN, INC.

(Exact name of Registrant as specified in its charter)

Massachusetts
(State or other jurisdiction
of incorporation or organization) 04-3002117
(I.R.S. Employer
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 o

     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. x

     Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934 ). Yes x No o

     The aggregate market value of the Registrant’s Common Stock held by non-affiliates of the Registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the common stock was last sold as of the last business day of the Registrant’s most recently completed second fiscal quarter was $6,076,061,862.

     As of March 7, 2003, the registrant had 149,607,567 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our definitive Proxy Statement for our 2003 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report, and portions of our 2002 Annual Report to Shareholders are incorporated by reference into Parts II and IV of this Report.

TABLE OF CONTENTS

	PART I
	ITEM 1 — BUSINESS
	ITEM 2 — PROPERTIES
	ITEM 3 — LEGAL PROCEEDINGS
	ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	PART II
	ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
	ITEM 6 — SELECTED FINANCIAL DATA
	ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
	PART III
	ITEM 10 — DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11 — EXECUTIVE COMPENSATION
	ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
	ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	ITEM 14 – CONTROLS AND PROCEDURES
	PART IV
	ITEM 15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
Ex-3.1 Articles of Organization
Ex-10.20 1982 Incentive Stock Option Plan
Ex-10.21 1985 Non-Qualified Stock Option Plan
Ex-10.22 1987 Scientific Board Stock Option Plan
Ex 10.44 Letter agreement - Thomas Bucknum 6/11/99
Ex 10.45 Letter agreement - T. Bucknum 10/19/01
Ex 10.48 Antegren Development and Marketing Coll.
Ex 10.49 Letter agreement - J. Mullen 2/15/02
Ex 10.50 Letter agreement - J. Mullen 3/06/03
Ex 10.51 Letter agreement - H. P. Hasler 6/22/01
Ex 10.52 Letter agreement - H. P. Hasler 10/19/01
Ex 13 Portions of the Financial Statements
Ex 21 Subsidiaries of the Registrant
Ex 23 Consent of PricewaterhouseCoopers LLP

PART I

ITEM 1 — BUSINESS

OVERVIEW

     Biogen, Inc. is a global biopharmaceutical company that develops, manufactures and markets novel human therapeutic products. Our primary focus is developing pharmaceutical products that meet unmet medical needs, particularly in our core therapeutic areas of neurology, dermatology and rheumatology. We currently sell AVONEX® (Interferon beta-1a) for the treatment of relapsing multiple sclerosis (“MS”) and, commencing in February 2003, AMEVIVE® (alefacept) for the treatment of adult patients with moderate-to-severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy. We also receive revenues from royalties on sales by our licensees of a number of products covered under patents that we control. In addition, we have a pipeline of development stage products and a number of research programs in our core therapeutic areas and in other areas of interest.

     AVONEX is the most prescribed therapeutic product in MS worldwide. Globally over 122,000 patients have chosen AVONEX as their treatment of choice. In 2002, we focused our sales and marketing efforts on continuing to drive AVONEX growth in the United States (“U.S.”) and the European Union (“EU”) in the face of increasing competition. As a result of these efforts, we achieved revenues from sales of AVONEX of approximately $1,034.4 million in 2002, compared to $970.5 million in 2001.

     We launched our second product, AMEVIVE, in February 2003 in the U.S. AMEVIVE is approved in the U.S. for the treatment of adult patients with moderate-to-severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy. In February 2003, we withdrew our application for approval to market AMEVIVE in the EU. Our decision was based on a determination by the Committee for Proprietary Medicinal Products ("CPMP"), the scientific advisory board of the regulatory authority in the EU, that more clinical information is needed to approve AMEVIVE. We plan to develop the additional information necessary to obtain approval of AMEVIVE for psoriasis patients in the EU. Developing the data and re-filing the application may take several years.

     In addition to ongoing development work with our marketed products, we continue to devote significant resources to other ongoing development efforts, including our collaboration with Elan Corporation plc (“Elan”) on ANTEGREN® (natalizumab) and our collaboration with ICOS Corporation (“ICOS”) on orally active, small molecule LFA-1 antagonists.

     With Elan, we are developing ANTEGREN for use in the treatment of MS and Crohn’s disease. In January 2003, the results of the Phase 2 clinical studies of ANTEGREN in MS and Crohn’s were published in the New England Journal of Medicine. Based on the promising Phase 2 results, together with Elan, we are currently conducting four Phase 3 clinical studies of ANTEGREN, two in MS and two in Crohn’s disease. These four studies became fully enrolled during 2002.

     In collaboration with ICOS, we are developing orally active, small molecule LFA-1 antagonists for the treatment of psoriasis and other autoimmune diseases. In June 2002, we completed Phase 1 clinical studies of IC747, the lead molecule of the LFA-1 antagonist program. Based on the results of the Phase 1 studies, we have initiated Phase 2a clinical studies of IC747 in patients with moderate-to-severe psoriasis.

     In addition to our development programs, we have a number of preclinical and earlier-stage research programs. Our research strategy is to direct our primary effort toward finding therapeutics in our focus areas: neurology, dermatology and rheumatology. We supplement our internal research efforts to find novel therapeutics in these areas and in other areas of interest with genomics tools and other innovative technologies. We also seek to advance our research efforts through collaborations. Our most recent example is a collaboration entered into in January 2003 with IDEC Pharmaceuticals Corporation to develop three oncology candidates from our pipeline of early stage products. We believe that our biologically-focused research strength, along with expertise in protein and bio-organic chemistry, will allow us to be in a position to capitalize on the potential of the post-genomics era.

     We are a Massachusetts corporation with our principal executive offices located at 10 Cambridge Center, Cambridge, Massachusetts 02142. Our telephone number is (617) 679-2000 and our web site address is www.biogen.com. We make available free of charge through the Investor Relations section of our web site our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”). We include our web site address in this Annual Report on Form 10-K only as an inactive textual reference and do not intend it to be an active link to our web site.

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PRODUCTS

AVONEX® (INTERFERON BETA-1A)

     We currently market and sell AVONEX worldwide for the treatment of relapsing MS. MS is a progressive neurological disease in which the body loses the ability to transmit messages along nerve cells, leading to a loss of muscle control, paralysis and, in some cases, death. Patients with active relapsing MS 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. AVONEX is a recombinant form of a protein produced in the body by fibroblast cells in response to viral infection. AVONEX has been shown in clinical trials in relapsing forms of the disease both to slow the accumulation of disability and to reduce the frequency of exacerbations. We began selling AVONEX in the U.S. in 1996, and in the EU in 1997. Currently AVONEX is on the market in more than 50 countries and is the most prescribed product in MS worldwide. Over 122,000 patients worldwide have chosen AVONEX as their treatment of choice.

     In 2002, we focused our marketing and sales activities on continuing to drive AVONEX growth in the U.S. and the EU in the face of increased competition. The result was revenues from sales of AVONEX in 2002 of $1,034.4 million, compared to revenues from sales of AVONEX of $970.5 million in 2001 and $760.3 million in 2000. Of these revenues, approximately 72% in 2002, 73% in 2001 and 73% in 2000 were generated in the U.S.

     Our efforts have also included work on the legislative front. In May 2002, the Center for Medicare and Medicaid Services restored Medicare coverage for certain injectable medicines, including AVONEX. Medicare now provides coverage for MS patients treated with AVONEX as part of physician services, making AVONEX the only product in the MS market that is covered by Medicare.

     We also continue to work to expand the quantity and quality of data available about AVONEX. In 2002 the results of our efforts in this area included the FDA’s approval of a change to the AVONEX label to lower the specified rate of occurrence of neutralizing antibodies associated with AVONEX from 24% to 5%. The AVONEX label was amended again in January 2003 to include in the indication section MS patients with a first clinical episode and MRI features consistent with MS. This label change is based on the data from our Controlled High Risk AVONEX Multiple Sclerosis Prevention Study (“CHAMPS”) study. In the CHAMPS study, AVONEX was shown to have a highly statistically significant beneficial effect on delaying the development of clinically definite MS in patients who had experienced a single neurological event consistent with MS. Based on the CHAMPS data, the regulatory authorities in the EU made a similar change to the AVONEX label earlier in 2002.

     An important component of our activities related to AVONEX is our ongoing clinical trial work. In 2002, we completed an open-label, follow-up study of AVONEX initiated in 1995 to obtain long-term safety and antigenicity data. The data from this study will be submitted to the FDA and the regulatory authorities in the EU as part of our post-marketing commitment. In 2001, we completed a randomized, double-blind, placebo controlled study initiated in 1998 to evaluate the efficacy of a higher dose of AVONEX IM formulation delivered once a week in the treatment of secondary progressive MS. We are currently discussing the outcome and endpoints of the study with the FDA and regulatory authorities in the EU. Ongoing studies of AVONEX also include an open label follow-up study initiated in 2000 to study the long-term effect of AVONEX on patients who participated in the CHAMPS study.

     As part of our commitment to AVONEX, we also work to improve the product. In the first half of 2002, we filed with the FDA and regulatory authorities of the EU for approval to market a pre-filled syringe formulation of AVONEX. In February 2003, the CPMP issued a positive opinion for the pre-filled syringe formulation. We expect to receive approval in the U.S. and the EU in the second or third quarter of 2003. We continue to explore other ways to improve delivery of AVONEX.

     In the past year, we have also been working to enhance the services associated with AVONEX. In July 2002, we launched a newly enhanced version of MSActiveSource.com, a comprehensive Internet site for people living with MS, their caregivers and healthcare professionals. Registrants on the site are provided with a broad selection of customizable content and resources, including disease information, current news and the latest research studies about MS. We also maintain AVONEX.com, an Internet site designed for people taking AVONEX. AVONEX.com incorporates the personalized information and customizable features of MSActiveSource.com to facilitate the management of therapy programs.

     In the U.S., Canada, Australia and most of the major countries of the EU, we use our own sales force to market and sell AVONEX. In those countries, we distribute AVONEX principally through wholesale distributors of pharmaceutical products, mail order, specialty distributors or shipping service providers. Sales to a specialty distributor and three major wholesale distributors in the U.S. accounted for approximately 20%, 19%, 17% and 16%, respectively, of total revenues in 2002. In countries outside the U.S., Canada, Australia and the major countries of the EU, we sell AVONEX to distribution partners who are then responsible for most marketing and distribution activities.

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     AMEVIVE® (ALEFACEPT)

     In February 2003, we began marketing and selling AMEVIVE in the U.S. for the treatment of patients with moderate-to-severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy. Psoriasis is an autoimmune skin disease in which skin cells multiply 10 times faster than the normal rate. The excess cells pile up on the skin’s surface, forming red, raised, scaly plaques that can be painful and disfiguring. AMEVIVE is a systemic therapy that works by helping to rebalance the overactive cells in the immune system that cause psoriasis. These cells, called T-cells, are central to the immune response when working properly, but are directed inappropriately against the body’s own tissues in psoriasis and other autoimmune disorders. AMEVIVE is designed to reduce the number of these cells as a means of treating these diseases.

     In February 2003, we withdrew our application for approval to market AMEVIVE in the EU. Our decision was based on a determination by the Committee for Proprietary Medicinal Products, the scientific advisory board of the regulatory authority in the EU, that more clinical information is needed to approve AMEVIVE. We plan to develop the additional information necessary to obtain approval of AMEVIVE for psoriasis patients in the EU. Developing the data and re-filing the application may take several years. Our filings for approval in Australia, Canada, New Zealand and Switzerland are currently being reviewed by regulatory authorities.

     Our regulatory filings for AMEVIVE are based on our pivotal Phase 3 clinical studies completed in 2001. We have other ongoing or planned clinical studies of AMEVIVE. For example, as part of our post marketing commitments to the FDA we began a Phase 3b international study in 2002. This is a multiple course study that will provide further safety data regarding the use of AMEVIVE in the context of standard dermatology practices. In 2003, we expect to begin clinical studies investigating AMEVIVE in combination with other systemic therapies and exploring alternative dosing regiments for AMEVIVE.

     In the U.S., we use our own sales force to market and sell AMEVIVE. AMEVIVE is distributed in the U.S. principally through specialty distributors of pharmaceutical products.

     In April 2002, we launched PsoriasisSupport.com, a comprehensive Internet site that provides psoriasis patients with in-depth information and community support to help people learn more about the disease. Registrants on the site are provided with a broad selection of customizable content, including disease information, current news and the latest research studies about psoriasis. In connection with the launch of AMEVIVE, we also launched Amevive.com, an Internet site designed for people taking AMEVIVE that incorporates the features of PsoriasisSupport.com with information relevant to the management of therapy programs.

MAJOR RESEARCH AND DEVELOPMENT PROGRAMS

     We focus our research and development efforts on continuing to develop and study AVONEX and AMEVIVE, as described above, and finding novel therapeutics in areas of unmet medical need particularly in our key focus areas of neurology, dermatology and rheumatology. Our programs include:

     ANTEGREN® (NATALIZUMAB)

     The furthest along of our development-stage products is ANTEGREN, a humanized monoclonal antibody that is the first of a new class of potential therapeutics known as selective adhesion molecule inhibitors. We are developing ANTEGREN in collaboration with Elan Corporation plc as a potential treatment for MS and Crohn’s disease. In MS, immune cells migrate through the blood-brain barrier into the brain leading to inflammation and destruction of the myelin sheath (the insulation for the nerves) and eventual nerve cell death. In Crohn’s disease, a chronic inflammatory disease of the gastrointestinal tract, a similar process of inflammation occurs in the gastrointestinal tract. Adhesion molecules on the surface of the immune cells play an important role in the migration of the immune cells in the inflammatory process. ANTEGREN binds to a specific adhesion molecule on the immune cell surface known as alpha-4 integrin. By binding to alpha-4 integrin, ANTEGREN is designed to inhibit immune cells from leaving the bloodstream and prevent them from migrating into the brain, in the case of MS, or the inflamed gastrointestinal tissue, in the case of Crohn’s disease, and worsening the condition.

     In January 2003, the promising results of two large Phase 2 clinical studies of ANTEGREN in MS and Crohn’s disease were published in the New England Journal of Medicine. Based on these results, together with Elan, we are currently conducting four Phase 3 clinical studies of ANTEGREN, two in MS and two in Crohn’s disease. All of the studies were fully enrolled by the end of 2002.

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     SMALL MOLECULE LFA-1 ANTAGONISTS

     Leveraging our expertise in psoriasis and other inflammatory diseases, we are collaborating with ICOS Corporation on the development of small molecule antagonists to a cell adhesion molecule known as Leukocyte function – Associated Antigen-1 (LFA-1). LFA-1 promotes T-cell migration and activation that can lead to inflammatory diseases such as psoriasis, rheumatoid arthritis and MS. Together with ICOS, we are developing antagonists to LFA-1 designed to interfere with T-cell migration and activation by blocking LFA-1 activity as a means of potentially treating these inflammatory diseases. In June 2002, we completed Phase 1 clinical studies of IC747, an orally available LFA-1 antagonist. Based on the promising results from the Phase 1 studies, we have initiated Phase 2a clinical studies of IC747 in patients with moderate-to-severe psoriasis.

     OTHER RESEARCH AND DEVELOPMENT PROGRAMS

     We also have a pipeline of earlier stage programs in our focus areas and in other areas of interest. For example:

• We are developing a humanized monoclonal antibody directed against alpha-1/beta-1 integrin (VLA-1). VLA-1 is found on a variety of cells associated with tissue inflammation and fibrosis, including activated T-cells, macrophages and myofibroblasts. Reduction of VLA-1 activity is associated with sharply reduced inflammation and fibrosis in experimental models of disease.

• In January 2003, we entered into a collaboration with IDEC Pharmaceuticals Corporation to co-develop three oncology candidates from our pipeline of early stage products. The three product candidates in this collaboration are: an anti-lymphotoxin beta receptor monoclonal antibody that has shown activity in inhibiting tumor growth in animal models, Cripto antibody, a monoclonal antibody that is designed to inhibit Cripto, a novel cell surface signaling molecule that is over-expressed in solid tumors, and an interferon beta gene delivery product that is currently in Phase 1 clinical trials in glioma.

• In 2002 we completed a Phase 2a clinical study of a small molecule antagonist of the adenosine A1 receptor in patients with stable congestive heart failure. The adenosine A1 receptor mediates vasoconstriction, renal function and reabsorbtion of fluids in the kidney. To maximize the opportunity for this product, we plan to license our rights to another company for further development and commercialization.

     We also have a number of other ongoing research programs. Our research strategy is to direct our primary effort toward finding therapeutics in our focus areas: neurology, dermatology and rheumatology. We supplement our internal research efforts to find novel therapeutics in these areas and in other areas of interest with genomics tools and other innovative technologies. We also seek to advance our research efforts through collaborations. For example, in late 2002, we entered into a collaboration with Sunesis Pharmaceuticals, Inc. (“Sunesis”) under which we will work together to apply Sunesis’ proprietary fragment-based drug discovery technology, known as “Tethering,” to generate small molecule leads that target select cytokines in the immune system. We believe that our biologically-focused research effort, along with the leveraging of our strengths in protein and bio-organic chemistry, will allow us to be in a position to capitalize on the potential of the post-genomics era.

     RESEARCH AND DEVELOPMENT COSTS

     For the years ended December 31, 2002, 2001 and 2000, our research and development costs were approximately $367.6 million, $314.6 million and $302.8 million, respectively.

RISKS ASSOCIATED WITH DRUG DEVELOPMENT AND COMMERCIALIZATION

     Certain of the statements set forth in this report regarding our products and our research and development programs, such as statements regarding the anticipated commencement or completion of clinical trials of drugs in development, statements regarding the potential for such drugs as therapeutics and our predictions as to the timing and result of deliberations by regulatory authorities are forward-looking, and are based upon our current belief as to the outcome and timing of such future events. These events are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. Many important factors affect our ability to successfully develop and commercialize drugs, including the need to demonstrate the safety and efficacy of drug candidates at each stage of the clinical trial process, to overcome technical hurdles that may arise, to meet applicable regulatory standards, to receive required regulatory approvals, to be capable of producing drug candidates in commercial quantities at reasonable costs, to obtain and maintain all necessary patents or licenses, to compete successfully against other products, to market products successfully, to receive adequate prices for our products, and to effectively and

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efficiently work with collaborators. Success in early stage clinical trials or preclinical work does not ensure that later stage or larger scale clinical trials will be successful. Even if later stage clinical trials are successful, the risk exists that unexpected concerns may arise from analysis of data or from additional data or that obstacles may arise or issues be identified in connection with review of clinical data with regulatory authorities or that regulatory authorities may disagree with our view of the data or require additional data or information or additional studies. There can be no assurance that any of the products described in this report or resulting from our research and development programs will be successfully developed and commercialized, overcome technical hurdles that may arise, prove to be safe and efficacious at each stage of clinical trials, meet applicable regulatory standards, receive required regulatory approvals, survive challenges based on patents, not be affected by pricing pressures from public and private payors, be capable of being produced in commercial quantities at reasonable costs, or successfully meet challenges from competitive products. There also can be no assurance that we will be able to work effectively with collaborators or that we will be able to obtain licenses necessary to market and develop the products described in this section on terms acceptable to us.

     For a detailed discussion of the risks associated with our drug development and commercialization program, see “Business — Patents and Other Proprietary Rights,” “Business — Competition,” and our 2002 Annual Report to Shareholders — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Outlook,” which is incorporated by reference into this Annual Report on Form 10-K under Item 7 hereof.

PRINCIPAL LICENSED PRODUCTS

     We receive royalties from Schering-Plough Corporation (“Schering-Plough”) under an exclusive license to our alpha interferon patents and patent applications. Schering-Plough sells its INTRON® A (interferon alfa-2b) brand of alpha interferon in various countries, including the U.S., for a number of indications, including the treatment of chronic hepatitis B and hepatitis C. Schering-Plough also sells other alpha interferon products for the treatment of hepatitis C, including REBETRON® Combination Therapy containing INTRON A and REBETOL® (ribavirin, USP), PEG-INTRON® (peginterferon alfa-2b), a pegylated form of alpha interferon, and PEG-INTRON in combination with REBETOL. Royalties from Schering-Plough on sales of alpha interferon products accounted for approximately 5%, 2% and 10% of our revenues in 2002, 2001 and 2000, respectively. We expect royalties from Schering-Plough on sales of alpha interferon products in the U.S. to increase in future years as compared to 2002, as the result of the settlement of a royalty dispute with Schering-Plough related to royalties payable on sales in the U.S. For a description of this settlement, see “Patents and Other Proprietary Rights — Recombinant Alpha Interferon.”

     We also hold several important patents related to hepatitis B antigens produced by genetic engineering techniques. See “Patents and Other Proprietary Rights — Recombinant Hepatitis B Antigens.” These antigens are used in recombinant hepatitis B vaccines and in diagnostic test kits used to detect hepatitis B infection. We receive royalties from sales of hepatitis B vaccines in several countries, including the U.S., from GlaxoSmithKline plc and Merck and Co. Inc. We have also licensed our proprietary hepatitis B rights, on an antigen-by-antigen and nonexclusive basis, to several diagnostic kit manufacturers, including Abbott Laboratories, the major worldwide marketer of hepatitis B diagnostic kits. For a discussion of the length of the royalty obligation of GlaxoSmithKline and Merck on sales of hepatitis B vaccines and the obligation of our other licensees on sales of hepatitis B-related diagnostic products, see “Patents and Other Proprietary Rights — Recombinant Hepatitis B Antigens.”

     We also receive ongoing royalties on sales of the recombinant human growth hormone product, Genotropin®, by Pharmacia Corporation in the U.S., Canada and Japan, and on sales of ANGIOMAX® (bivalirudin) by The Medicines Company (“TMC”). TMC sells ANGIOMAX in the U.S. for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing percutaneous transluminal coronary angioplasty. TMC sells ANGIOMAX through distributors in Europe, Canada and Latin America.

     Financial information about our foreign operations and export sales is included in our 2002 Annual Report to Shareholders — Notes to Consolidated Financial Statements — Note 11, incorporated by reference under Item 8 of this Annual Report on 10-K.

PATENTS AND OTHER PROPRIETARY RIGHTS

     We have filed numerous patent applications in the U.S. and various other countries seeking protection of a number of our processes and products. Patents have been issued on many of these applications. We have also obtained rights to various patents and patent applications under licenses with third parties which provide for the payment of royalties by us. The ultimate degree of patent protection that will be afforded to biotechnology products and processes, including ours, in the U.S. and in other important markets remains uncertain and is dependent upon the scope of protection decided upon by the patent offices, courts and lawmakers in these countries. There is no certainty that our existing patents or others, if obtained, will afford us substantial protection or commercial benefit. Similarly, there is no assurance that our pending patent applications or patent applications licensed from third parties will ultimately be granted as patents or that those patents that have been issued or are issued in the future will prevail if they are challenged

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in court. There has been, and we expect that there may continue to be, significant litigation in the industry regarding patents and other intellectual property rights. Intellectual property litigation could therefore create business uncertainty and consume substantial financial and human resources.

     In general, we obtain licenses to third party patents which we deem necessary or desirable for the manufacture, use and sale of our products. We are aware that others, including various universities and companies working in the biotechnology field, have filed patent applications and have been granted patents in the U.S. and in other countries claiming subject matter potentially useful or necessary to our business. Some of those patents and patent 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. There is considerable uncertainty within the biotechnology industry about the validity, scope and enforceability of many issued patents in the U.S. and elsewhere in the world, and, to date, there is no consistent policy regarding the breadth of claims allowed in biotechnology patents. For example, Genentech has been granted patents and is prosecuting other patent applications in the U.S. and certain other countries which it may allege are currently used by us and the rest of the biotechnology industry to produce recombinant proteins in host cells. Genentech has offered us and others in the industry non-exclusive licenses under some of those patents as to some products but not to others. We cannot currently determine 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 or which patents might be asserted to be infringed by the manufacture, use and sale of our products. We are currently unable to assess the extent to which we may wish or be required to acquire rights under such patents and the availability and cost of acquiring such rights, or whether a license to such patents will be available on acceptable terms or at all.

     RECOMBINANT BETA INTERFERON

     Third parties have pending patent applications or issued patents in the U.S., Europe and other countries with claims to key intermediates in the production of beta interferon (the “Taniguchi patents”) and to beta interferon itself (the “Roche patents”). We have obtained non-exclusive rights in various countries of the world, including the U.S., Japan and most European countries, to manufacture, use and sell AVONEX, our brand of recombinant beta interferon, under the Taniguchi patents and have obtained worldwide, non-exclusive rights under the Roche patents.

     In January 2002, we settled litigation with Berlex Laboratories, Inc. (“Berlex”). Berlex had claimed that our production of AVONEX in the U.S. infringed certain U.S. patents which we refer to as the “McCormick” patents. A District Court decision in 2000 rendered final judgment in our favor determining that the manufacture, use and sale of AVONEX in the U.S. did not infringe any of the claims of the asserted McCormick patents, but Berlex appealed the decision to the Court of Appeals for the Federal Circuit. Under the settlement agreement, we agreed to pay Berlex $20 million, which we recorded as a charge in the fourth quarter of 2001 under “Other income (expense)”, and to make a second and final payment to Berlex if the Court of Appeals were to reverse the District Court’s previous ruling granting summary judgment in our favor. As part of the settlement, both parties agreed not to pursue further litigation about these patents. On January 31, 2003, the Court of Appeals decided that the District Court had properly construed the claims of the McCormick patents and that we did not literally infringe the McCormick patents. The Court of Appeals remanded the case to the District Court to determine if one of the Berlex patents might be infringed under a redefinition of the “doctrine of equivalents” recently handed down by the U.S. Supreme Court. As a result of the decision, we were required to make a final payment to Berlex of $55 million under the settlement agreement which we recorded as a charge in the fourth quarter of 2002 under “Other income (expense)”.

     On October 13, 1998, we filed an opposition with the Opposition Division of the European Patent Office opposing the grant of a European patent (the “Rentschler II Patent”) issued to Dr. Rentschler Biotechnologie GmbH (“Rentschler”) claiming compositions of matter of beta interferon having specific glycosylation patterns. On November 6, 2002, a hearing took place with regard to our opposition of the Rentschler II Patent in the European Patent Office. The Opposition Board of the European Patent Office ruled in an appealable decision that the present claims of the Rentschler II Patent should be maintained. Following this decision, Rentschler Biotechnologie GmbH & Co. KG sued our German subsidiary, Biogen GmbH, for infringement of the Rentschler II Patent in Germany. We intend to appeal the decision of the Opposition Division to the European Patent Office’s Technical Board of Appeals. We believe that we have arguments to support the invalidation of the Rentschler II Patent before the Technical Board of Appeals. A decision on our appeal is not likely to be issued until at least two years after we file the appeal. We believe that we have solid arguments to support our defense against Rentschler’s infringement claims in the German infringement lawsuit. A hearing in the German proceeding is scheduled to occur in September 2003, with a decision likely to follow within a month or two after the hearing. The non-prevailing party will then have the right to appeal the decision. A ruling on such an appeal would likely take another 12 to 18 months. We are closely examining the Opposition Board’s recent written ruling and the claims made in the German infringement suit and exploring various alternatives for handling these matters. If we were to be enjoined from selling AVONEX in Germany by the German district court pending our appeal of an adverse judgment or, if we lost any appeal of the German infringement suit, or if, through other legal proceedings, Rentschler were to obtain a determination that our sale of AVONEX in other European countries infringed a valid Rentschler II Patent, it could have a material adverse effect on our results of operations and financial condition. See our 2002 Annual

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Report to Shareholders — “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Legal Matters” incorporated by reference under Item 7 of this Annual Report in Form 10-K.

     AMEVIVE® (ALEFACEPT)

     AMEVIVE is presently claimed in a number of patents granted in the U.S. and the EU, which cover LFA-3 polypeptides and DNA, LFA-3 fusion proteins and DNA, host cells, manufacturing methods and pharmaceutical compositions. We have obtained composition of matter patent coverage for the commercial product and important intermediates in the manufacturing process. Our patent portfolio also includes patents granted in the U.S. and the EU, which cover the use of LFA-3 polypeptides and LFA-3 fusion proteins in methods to inhibit T cell responses and use of LFA-3 polypeptides and fusion proteins to treat skin diseases, specifically including psoriasis. Our patent portfolio further includes pending patent applications, which seek coverage for the use of LFA-3 polypeptides and fusion proteins in the treatment of other indications of possible future interest as well for certain combination therapy treatments of potential interest and utility. Patents issued or which may be issued on these various patent applications expire between 2007 (for patents relating to manufacturing intermediates) and 2021 (in the case of recently filed patent applications). Our principal patents covering the drug product expire in 2013 subject to potential patent term extensions in countries where such extensions are available and by supplemental protection certificates in countries of the EU. Method of use patent protection for the product to treat skin diseases, including psoriasis, extends until 2017 in the U.S. and generally until 2015 in the rest of the world.

     We are aware that Genentech has been granted patents and is presently prosecuting other patent applications in the U.S. and certain other countries pertaining to immunoadheson technology. Genentech may allege that its patents on such immunoadheson technology are infringed by our commercial activities with AMEVIVE. We have had discussions with Genentech regarding licensing and are evaluating these patents to determine if a license should be taken. The ultimate scope and validity of Genentech’s immunoadheson patents and the availability and ultimate cost of acquiring rights, currently cannot be determined.

     RECOMBINANT ALPHA INTERFERON

     In 1979, we granted an exclusive worldwide license to Schering-Plough under our alpha interferon patents. Many of our alpha interferon patents have since expired, including expiration in January 2001 of patents in Japan and all countries of Europe other than France, Italy and Spain. We have obtained supplementary protection certificates in France and Italy extending the coverage (in France until 2003 and in Italy until 2007, although the Italian Legislature is considering legislation that may shorten this period). In Spain, our alpha interferon patents expire in 2003.

     In October 2002, we settled our dispute with Schering-Plough over royalties on U.S. sales of alpha interferon products. We received a final settlement payment resulting in a net gain of $37.2 million, which was classified to Other income (expense) in the fourth quarter of 2002. In addition, Schering-Plough agreed, effective October 1, 2002, to commence royalty payments on U.S. sales of alpha interferon products under an interference settlement entered into in 1998. Under the terms of the interference settlement, Schering-Plough agreed to pay us royalties commencing in mid-2002 under certain patents to be issued to Hoffman-La Roche Inc. (“Roche”) and Genentech in consideration of our assignment to Schering-Plough of the alpha interferon patent application that had been the subject of the settled interference with respect to the Roche/Genentech patent. Schering-Plough entered into an agreement with Roche as part of settlement of the interference. The first of the Roche/Genentech patents was issued on November 19, 2002 and has a seventeen-year term.

     RECOMBINANT HEPATITIS B ANTIGENS

     We have obtained numerous patents in countries around the world, including in the U.S. and in European countries, covering the recombinant production of hepatitis B surface, core and “e” antigens. We have licensed our recombinant hepatitis B antigen patent rights to manufacturers and marketers of hepatitis B vaccines and diagnostic test kits, and receive royalties on sales of the vaccines and test kits by our licensees. See “Licensed Products.” The obligation of GlaxoSmithKline and Merck to pay royalties on sales of hepatitis B vaccines and the obligation of our other licensees under our hepatitis B patents to pay royalties on sales of diagnostic products will terminate upon expiration of our hepatitis B patents in each licensed country. Following the conclusion of a successful interference proceeding in the U.S., we were granted patents in the U.S. expiring in 2018 which broadly claim hepatitis B virus polypeptides and vaccines and diagnostics containing such polypeptides. Our European hepatitis B patents expired at the end of 1999, except in those countries in which we have obtained supplementary protection certificates. Coverage under supplementary protection certificates still exists in France, Italy and Sweden. The additional coverage afforded by the supplementary protection certificates ranges from one to five years.

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     TRADE SECRETS AND CONFIDENTIAL KNOW-HOW

     Trade secrets and confidential know-how are important to our scientific and commercial success. Although we seek to protect our proprietary information by generally requiring our employees, consultants, advisors and corporate partners to sign confidentiality agreements, there can be no assurance that third parties will not either independently develop the same or similar information or obtain access to our proprietary information.

COMPETITION

     IN GENERAL

     Competition in the biotechnology and pharmaceutical industries is intense and comes from many and varied sources. We do not believe that any of the industry leaders can be considered dominant in view of the rapid technological change in the industry. We experience significant competition from specialized biotechnology firms in the U.S., Europe and elsewhere and from many large pharmaceutical, chemical and other companies. Certain of these companies have substantially greater financial, marketing, research and development and human resources than us. Most large pharmaceutical companies have considerable experience in undertaking clinical trials and in obtaining regulatory approval to market pharmaceutical products.

     We believe that competition and leadership in the industry will be based on managerial and technological superiority and establishing proprietary positions through research and development. Leadership in the industry may also be influenced significantly by patents and other forms of protection of proprietary information. See “Patents and Other Proprietary Rights”. A key aspect of such competition is recruiting and retaining qualified scientists and technicians. We believe that we have been successful in attracting skilled and experienced scientific personnel. The achievement of a leadership position depends largely upon our continued ability to attract and retain skilled and experienced personnel, our ability to identify and exploit commercially the products resulting from research and the availability of adequate financial resources to fund facilities, equipment, personnel, clinical testing, manufacturing and marketing.

     Many of our competitors are working to develop products similar to those that we are developing. 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. The EU has similar laws and other jurisdictions have or are considering such laws. Accordingly, the relative speed with which we can develop products, complete the testing and approval process and supply commercial quantities of the product to the market will have an important impact on our competitive position. In addition, competition among products approved for sale, including AVONEX and AMEVIVE, may be based, among other things, on patent position, product efficacy, safety, reliability, availability and price.

     AVONEX® (INTERFERON BETA-1a)

     In 2002, AVONEX competed in the U.S. and EU markets primarily with four products: COPAXONE® glatiramer acetate, sold by Teva Neuroscience, Inc. (“Teva”) in the U.S. and co-promoted by Teva and Aventis Pharma in the EU; BETASERON®, sold by Berlex in the U.S. and sold under the name BETAFERON® by Schering A.G. in the EU; NOVANTRONE® (mitoxantrone for injection) sold by Amgen, Inc. (“Amgen”) and Serono S.A. in the U.S. and sold by Amgen in the EU; and REBIF®, which was launched in the U.S. by Serono, Inc. (“Serono”) in March 2002. Serono announced in July 2002 that it reached an agreement to co-promote REBIF in the U.S. with Pfizer Inc. In 2002, AVONEX had worldwide revenues of approximately $1,034.4 million, BETASERON and BETAFERON had combined worldwide revenues of approximately $747.7 million, REBIF had worldwide revenues of approximately $548.8 million, COPAXONE had worldwide revenues of approximately $538.8 million, and NOVANTRONE had worldwide revenues of approximately $76.3 million.

     A number of companies, including us, are working to develop products to treat MS which may in the future compete with AVONEX. AVONEX also faces competition from off-label uses of drugs approved for other indications. Some of our current competitors are also working to develop alternative formulations for delivery of their products which may in the future compete with AVONEX.

     AMEVIVE® (ALEFACEPT)

     AMEVIVE competes with existing therapies for moderate-to-severe chronic plaque psoriasis, such as oral retinoids, steroids, methotrexate and cyclosporin, along with other drugs, as discussed below, approved for other indications. In the future, AMEVIVE

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will also compete with new drugs currently in development for psoriasis, drugs now approved for other indications that may be approved for psoriasis, and off-label uses of drugs approved for other indications. Genentech and Xoma Corporation are co-developing RAPTIVA® (efalizumab), an antibody designed to block certain immune cells as a potential treatment for moderate-to-severe psoriasis. Genentech has filed for regulatory approval of the drug in the U.S. Serono has an exclusive license to RAPTIVA in the EU and other countries and has filed for regulatory approval of the drug in the EU. ENBREL® (etanercept), a drug sold by Amgen, Inc. and Wyeth Pharmaceuticals, Inc. has been approved by the FDA as a treatment for psoriatic arthritis, a joint disease that can be associated with the skin plaques of moderate-to-severe chronic plaque psoriasis. In January 2003, Amgen announced positive results from a Phase 3 clinical study of ENBREL in the treatment of moderate-to-severe plaque psoriasis and is conducting a second Phase 3 clinical study in psoriasis. Centocor, Inc., a subsidiary of Johnson & Johnson, sells REMICADE® (infliximab) worldwide as a treatment for other indications, including rheumatoid arthritis, and has completed a Phase 2 proof of concept study for REMICADE as a potential treatment for psoriasis. HUMIRA® (adalimumab), a drug sold by Abbott Laboratories, was also recently approved by the FDA as a treatment for rheumatoid arthritis. Abbott is undertaking clinical trials in psoriasis and psoriatic arthritis. In addition, a number of other companies are working to develop products to treat psoriasis which may ultimately compete with AMEVIVE.

REGULATION

     Our 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 U.S. 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 1, 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 2, 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 3, 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 results of the preclinical and clinical testing of a biologic product are then submitted to the FDA in the form of a Biologics License Application (or BLA). In response to a BLA, the FDA may grant marketing approval, request additional information or deny the application if it determines the application does not provide adequate basis for approval. The receipt of regulatory approval 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. Even after initial FDA approval has been obtained, further clinical trials may be required to provide additional data on safety and effectiveness and are required to gain clearance for the use of a product as a treatment for indications other than those initially approved. In addition, side effects or adverse events that are reported during clinical trials can delay, impede, or prevent marketing approval. Similarly, adverse events that are reported after marketing approval can result in additional limitations being placed on the product’s use and, potentially, withdrawal of the product from the market. Any adverse event, either before or after marketing approval, could result in product liability claims against us.

     In connection with the commercialization of products, 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 U.S. 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 U.S. An example of this is the FDA’s current Good Manufacturing Practices (or GMP). Before approval of a product, the FDA will perform a prelicensing inspection of the manufacturing facilities to determine their compliance with GMP and other rules and regulations. In complying with GMP, manufacturers must continue to expend time, money and effort in the area of production and quality control to ensure full compliance. After the establishment is licensed for the manufacture of any product, manufacturers are subject to periodic inspections by the FDA. Any determination by the FDA of manufacturing related deficiencies could have a material adverse effect on our business.

     The regulatory requirements and approval processes for new products in the EU and Canada operate under similar principles as those applied in the U.S. The process of seeking and obtaining approval of the FDA or regulatory authorities in the EU or other regulatory authorities worldwide for a new product and licensing of the facilities in which the product is produced takes a number of years and involves the expenditure of substantial resources. In addition, the regulatory approval processes for products in the U.S., the countries of the EU and other countries around the world are undergoing or may undergo changes. We cannot determine what effect any changes in regulatory approval processes may have on our business.

     In the U.S., the federal government regularly considers reforming health care coverage and costs. Resulting legislation or regulatory actions may have a significant effect on our business. Our ability to successfully commercialize human pharmaceutical

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products also may depend in part on the extent to which reimbursement for the costs of such products and related treatments will be available worldwide 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.

     We are also subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback laws and false claims laws. Anti-kickback laws make it illegal for a prescription drug manufacturer to solicit, offer, receive, or pay any remuneration in exchange for, or to induce, the referral of business, including the purchase or prescription of a particular drug. The federal government has published regulations that identify “safe harbors” or exemptions for certain payment arrangements that do not violate the anti-kickback statutes. We seek to comply with the safe harbors where possible. Due to the breadth of the statutory provisions and the absence of guidance in the form of regulations or court decisions addressing some of the our practices, it is possible that our practices might be challenged under anti-kickback or similar laws. False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented for payment to third party payors (including Medicare and Medicaid) claims for reimbursed drugs or services that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services. Our activities relating to the sale and marketing of our products may be subject to scrutiny under these laws. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines and civil monetary penalties, as well as the possibility of exclusion from federal health care programs (including Medicare and Medicaid). If the government were to allege against or convict us of violating these laws, there could be a material adverse effect on our business, including our stock price. For a description of litigation in this area in which we are currently involved, see Item 3 — Legal Proceedings. Our activities could be subject to challenge for the reasons discussed above and due to the broad scope of these laws and the increasing attention being given to them by law enforcement authorities.

     We also participate in the Medicaid rebate program established by the Omnibus Budget Reconciliation Act of 1990, and under amendments of that law that became effective in 1993. Participation has included extending comparable discounts under the Public Health Service (“PHS”) pharmaceutical pricing program. Under the Medicaid rebate program, we pay a rebate for each unit of product reimbursed by Medicaid. The amount of the rebate for each product is set by law as a minimum 15.1% of the average manufacturer price (“AMP”) of that product, or if it is greater, the difference between AMP and the best price available from us to any customer. The rebate amount also includes an inflation adjustment if AMP increases faster than inflation. The PHS pricing program extends discounts comparable to the Medicaid rebate to a variety of community health clinics and other entities that receive health services grants from the PHS, as well as hospitals that serve a disproportionate share of poor Medicare and Medicaid beneficiaries. The rebate amount is recomputed each quarter based on our reports of current average manufacturer price and best price for each of our products to the Centers for Medicare and Medicaid Services. The terms of our participation in the program impose an obligation to correct the prices reported in previous quarters, as may be necessary. Any such corrections could result in an overage or underage in our rebate liability for past quarters, depending on the direction of the correction. In addition to retroactive rebates (and interest, if any), if we were found to have knowingly submitted false information to the government, in addition to other penalties available to the government, the statute provides for civil monetary penalties in the amount of $100,000 per item of false information.

     We also make our products available to authorized users of the Federal Supply Schedule (“FSS”) of the General Services Administration. As a result of the Veterans Health Care Act of 1992 (the “VHC Act”), federal law requires that product prices for purchases by the Veterans Administration, the Department of Defense, Coast Guard, and the PHS (including the Indian Health Service) be discounted by a minimum of 24% off the non-federal average manufacturer price (“non-FAMP”). Our computation and report of non-FAMP is used in establishing the price to these government agencies. The accuracy of the reported non-FAMP may be audited by the government under applicable federal procurement laws. Among the remedies available to the government for infractions of these laws is recoupment of any overages paid by FSS users during the audited years. In addition, if we were found to have knowingly reported a false non-FAMP, the VHC Act provides for civil monetary penalties of $100,000 per item that is incorrect.

     We conduct relevant research in compliance with the current U.S. National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (the “NIH Guidelines”) and all other applicable federal and state regulations. By local ordinance, we are required to, among other things, comply with the NIH Guidelines in relation to our facilities in Cambridge, Massachusetts, and are required to operate pursuant to certain permits.

     Additionally, the U.S. Foreign Corrupt Practices Act, to which we are subject, prohibits corporations and individuals from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity. It is illegal to pay, offer to pay, or authorize the payment of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. Our present and future business has been and will continue to be subject to various other laws and regulations.

     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 our research work are or may be

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applicable to our activities. The extent of government regulation which might result from future legislation or administrative action cannot accurately be predicted. Certain agreements entered into by us involving exclusive license rights may be subject to national or supranational antitrust regulatory control, the effect of which also cannot be predicted.

MANUFACTURING AND RAW MATERIALS

     We currently produce all of our bulk drug products at our manufacturing facilities located in Cambridge, Massachusetts and Research Triangle Park, North Carolina. We source all of our fill-finish and final product storage operations, along with a substantial part of our packaging operations, to a concentrated group of third party contractors. We believe that our existing manufacturing facilities and outside sources will allow us to meet, in the near term, manufacturing needs for AVONEX, AMEVIVE, ANTEGREN and other products in clinical trials. Our existing manufacturing facilities operate under multiple licenses from the FDA, regulatory authorities in the EU and other regulatory authorities. We believe that our existing manufacturing facilities comply in all material respects with applicable regulatory standards. We expect that additional manufacturing facilities and outside sources will be required to meet our long-term research, development and commercial production needs.

     Raw materials and supplies required for the production of AVONEX and AMEVIVE are generally available from various suppliers in quantities adequate to meet our needs.

EMPLOYEES

     At December 31, 2002, we employed 2,633 full-time employees worldwide, of whom 2,109 were located in the U.S.

ITEM 2 — PROPERTIES

     Our principal executive offices and a majority of our administrative and research and development facilities are located in Cambridge, Massachusetts. We own approximately 537,292 square feet of real estate space in Cambridge, consisting of a 150,000 square foot building that houses laboratories and office space; an approximately 259,000 square foot building that primarily contains research and development and process development operations; and two other buildings, consisting of an aggregate of approximately 128,292 square feet, which primarily contains laboratories, purification, aseptic bottling facilities, office space, and 6,130 square feet which we sublease under a sublease which expires in 2008. We also have development options for additional property in Cambridge. We lease a total of approximately 415,900 square feet, consisting of additional office, manufacturing, and research and development space, in all or part of five other buildings in Cambridge. The lease expiration dates for the leased sites range from 2004 to 2015.

     We also own a 100,000 square foot biologics manufacturing facility in Research Triangle Park, North Carolina (“RTP”). We have substantially completed construction of a 250,000 square foot large scale manufacturing plant in RTP. We are in the process of further expanding our RTP facilities to add a laboratory office building and additional manufacturing capacity. The projects are expected to be completed by the summer of 2003. In 2002, we purchased a 60-acre site with an option for an additional 36 acres in Hillerod, Denmark. We are completing plans to build a large scale manufacturing facility at the site and expect construction to commence in 2003. See also our 2002 Annual Report to Shareholders — “Note 9 – Notes to Consolidated Financial Statements.”

     We financed construction of the buildings we own in Cambridge, Massachusetts and the 100,000 square foot biologics manufacturing facility in RTP with term loans. The term loans are collateralized by the buildings. We have financed the construction of the other facilities at RTP with operating cash. We expect to finance the purchase of the Hillerod, Denmark property and the construction of the large scale manufacturing facility with operating cash. See our 2002 Annual Report to Shareholders — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” incorporated by reference under Item 7 into this Annual Report on Form 10-K.

     Our European headquarters consists of approximately 59,000 square feet of office space in a multi-tenant building in Nanterre, France. The lease for the Nanterre space terminates in 2008. In addition, we lease approximately 34,200 square feet of real estate in Hoopddorf, The Netherlands, which consists of office space, a storage facility and a packaging facility where we perform some of our AVONEX packaging operations. We also lease office space in several other EU countries, Japan and Australia.

ITEM 3 — LEGAL PROCEEDINGS

     Along with most other major pharmaceutical and biotechnology companies, we have been named as a defendant in a lawsuit filed by the County of Suffolk, New York, in the U.S. District Court in the Eastern District of New York in January 2003. In March 2003, the case was conditionally transferred to the United States District Court for the District of Massachusetts. The complaint alleges that the defendants overstated the Average Wholesale Price (“AWP”) for drugs for which Medicaid provides reimbursement

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(“Covered Drugs”); marketed and promoted the sale of Covered Drugs to providers based on the providers ability to collect inflated payments from the government and Medicaid beneficiaries that exceeded payments possible for competing drugs; provided financing incentives to providers to over-prescribe Covered Drugs or prescribe Covered Drugs in place of competing drugs; and overcharged Medicaid for illegally inflated Covered Drugs reimbursements. The complaint further alleges that the defendants failed to accurately report the “best price” on the Covered Drugs to New York’s Medicaid program. Under Medicaid, pharmaceutical and biotechnology companies agree to pay Medicaid programs a rebate for each product reimbursed by Medicaid. The amount of the rebate is often the difference between the average manufacturers price and the best price reported by companies to the Medicaid program. Plaintiff claims that it was harmed because it could have allotted the dollars that it wrongfully spent on Medicaid to other public needs. Plaintiff has brought the action under the Racketeering Influence and Corrupt Organizations Act (RICO), and for breach of contract, unjust enrichment, Medicaid fraud and common law fraud. We intend to vigorously defend ourselves against all of the allegations and claims in this lawsuit.

     For a description of legal proceedings relating to certain of our patent rights, including our litigation with Rentschler and Berlex, see Item 1 hereof, “Business — Patents and Other Proprietary Rights.” We are also a party to other litigation proceedings which are routine and incidental to our business.

ITEM 4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of our security holders during the fiscal quarter ended December 31, 2002.

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EXECUTIVE OFFICERS

     The following is a list of each of our senior executive officers, their respective age as of March 7, 2003 and their principal positions. Executive officers are elected and may be removed by the Board of Directors.

Name	Age		Positions
James C. Mullen		44	Chairman of the Board of Directors, President and Chief Executive Officer
Burt A. Adelman		50	Executive Vice President — Research and Development
Thomas J. Bucknum		56	Executive Vice President — General Counsel, Secretary and Clerk
Sylvie L. Gregoire		41	Executive Vice President — Technical Operations
Hans Peter Hasler		47	Executive Vice President — Commercial Operations
Peter N. Kellogg		46	Executive Vice President — Finance and Chief Financial Officer
Craig Eric Schneier		55	Executive Vice President — Human Resources

The background of these officers is as follows:

     James C. Mullen was appointed Chairman of Board of Directors in July 2002 and was appointed President and Chief Executive Officer in June 2000. Mr. Mullen served as President and Chief Operating Officer from January 1999 to June 2000. Mr. Mullen was appointed as a Director in April 1999. Mr. Mullen previously served as Vice President — International from August 1996 until January 1999, and Vice President — Operations from December 1991 until August 1996 and served as Senior Director — Operations from February 1991 to December 1991. Mr. Mullen joined Biogen in 1989. Before coming to Biogen, Mr. Mullen held various positions of responsibility from 1984 through 1988 at SmithKline-Beckman Corporation (now known as GlaxoSmithKline plc), including Director, Engineering, SmithKline and French Laboratories, Worldwide.

     Burt A. Adelman, M.D., was appointed Executive Vice President — Research and Development in October 2001 after serving as Vice President — Medical Research since January 1999. Dr. Adelman previously served as Vice President — Development Operations from August 1996 to January 1999 and Vice President — Regulatory Affairs from May 1995 until August 1996. From 1991 until May 1995, Dr. Adelman was Director of Medical Research at Biogen. Dr. Adelman has served as Lecturer of Medicine at Harvard Medical School and Brigham and Women’s Hospital since 1992.

     Thomas J. Bucknum was appointed Executive Vice President – General Counsel, Secretary and Clerk in October 2001 after serving as Vice President — General Counsel, Secretary and Clerk since July 1999. Mr. Bucknum served as Biogen’s Chief Corporate Counsel from 1996 to July 1999. Prior to joining Biogen, Mr. Bucknum was Senior Vice President and General Counsel of DuPont Merck Pharmaceutical Company from 1990 to 1995 with responsibility for legal, government and public affairs matters. Prior to joining DuPont Merck, Mr. Bucknum held a number of domestic and international positions with E.I. DuPont de Nemours & Company, Inc. in the legal, marketing and regulatory affairs departments.

     Sylvie L. Gregoire, Pharm.D., was appointed Executive Vice President – Technical Operations in August 2001 after serving as Vice President — Manufacturing since October 2000. Dr. Gregoire previously served as Vice President — Regulatory Affairs from January 1999 to October 2000. From July 1998 to January 1999, Dr. Gregoire was the Program Executive for Biogen’s LT-Beta Receptor program and from 1995 until July 1998, served as Director, European Regulatory Affairs of the Company. Prior to joining Biogen, Dr. Gregoire was Associate Director of European Regulatory Affairs for Merck Sharp and Dohme (Europe) Inc. from 1991 until the end of 1994.

     Hans Peter Hasler was appointed Executive Vice President – Commercial Operations in August 2001. Mr. Hasler joined Biogen from Wyeth Pharmaceuticals, Inc. (formerly known as Wyeth-Ayerst Pharmaceuticals, Inc.), a subsidiary of Wyeth (formerly known as American Home Products Corporation), where he served as Senior Vice President, Head of Global Strategic Marketing since 1998. Mr. Hasler was a member of the Wyeth/AHP Executive Committee and was chairman of the Commercial Council. From 1993 to 1998, Mr. Hasler served in a variety of senior management capacities for Wyeth-Ayerst Pharmaceuticals, including Managing Director of Wyeth Group, Germany, and General Manager of AHP/Wyeth in Switzerland and Central Eastern Europe. Prior to joining Wyeth-Ayerst Pharmaceuticals, Mr. Hasler served as the Head of Pharma Division at Abbott AG.

     Peter N. Kellogg was appointed Executive Vice President – Finance and Chief Financial Officer in October 2001 after serving as Vice President — Finance and Chief Financial Officer since July 2000. Mr. Kellogg joined Biogen from PepsiCo where from 1987 to 2000, he served in a variety of senior financial, international and general management positions, including Senior Vice President, PepsiCo E-Commerce from March to July 2000. From March 1998 to March 2000, Mr. Kellogg served as Senior Vice President and Chief Financial Officer, Frito-Lay International; from November 1996 to March 1998 as Vice President and Chief Financial Officer, Frito-Lay Latin America; from March 1994 to November 1996 as Vice President and Chief Financial Officer, Central/Eastern Europe and Russia, Pepsi-Cola International; and from February 1993 through March 1994 as Vice President and General Manager-Pepsi,

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South Franchise Business Unit. Prior to joining PepsiCo, Mr. Kellogg was a senior consultant with Booz Allen & Hamilton and Arthur Andersen & Co.

     Craig Eric Schneier, Ph.D., was appointed Executive Vice President – Human Resources in January 2003 after serving as Senior Vice President – Strategic Organization, Design and Effectiveness since October 2001. Prior to joining Biogen, Dr. Schneier was president of Craig Eric Schneier Associates, a management consulting firm in Princeton, New Jersey from 1991 to 2001. Dr. Schneier was Managing Partner of Sibson & Company, a consulting firm in Princeton, New Jersey, from 1987 to 1991. Dr. Schneier was a tenured professor at the University of Maryland from 1975 to 1987, and has also held faculty positions at the University of Michigan and Columbia University. Dr. Schneier has taught at the Tuck School of Business at Dartmouth College since 1998.

PART II

ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The section entitled “Market for Securities” in our 2002 Annual Report to Shareholders is incorporated by reference into this Annual Report on Form 10-K.

ITEM 6 — SELECTED FINANCIAL DATA

     The section entitled “Selected Financial Data” in our 2002 Annual Report to Shareholders is incorporated by reference into this Annual Report on Form 10-K.

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 our 2002 Annual Report to Shareholders is incorporated by reference into this Annual Report on Form 10-K.

ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The sections entitled “Outlook – Market Risk”, “Outlook – Foreign Exchange” and “Outlook – Interest Rates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2002 Annual Report to Shareholders are incorporated by reference into this Annual Report on Form 10-K.

ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The sections entitled “Consolidated Statements of Income,” “Consolidated Balance Sheets,” “Consolidated Statements of Cash Flows,” “Consolidated Statements of Shareholders’ Equity,” “Notes to Consolidated Financial Statements” and “Report of Independent Accountants” in our 2002 Annual Report to Shareholders are incorporated by reference into this Annual Report on Form 10-K.

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

     The sections entitled “Proposal 1 – Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement for our 2003 Annual Meeting of Stockholders, which we intend to file with the Securities and Exchange Commission (“SEC”) no later than April 30, 2003, are incorporated by reference into this Annual Report on Form 10-K.

     Information concerning our Executive Officers is set forth in Item 4 of Part I of this Annual Report on Form 10-K.

15

ITEM 11 — EXECUTIVE COMPENSATION

     The section entitled “Executive Compensation” in our definitive proxy statement for our 2003 Annual Meeting of Stockholders, which we intend to file with the SEC no later than April 30, 2003, is incorporated by reference into this Annual Report on Form 10-K.

ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     The sections entitled “Share Ownership” and “Disclosure with respect to our Equity Compensation Plans” in our definitive proxy statement for our 2003 Annual Meeting of Stockholders, which we intend to file with the SEC no later than April 30, 2003, are incorporated by reference into this Annual Report on Form 10-K.

ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The sections entitled “Information about our Board and its Committees”, “Executive Compensation — Employment Agreements and Change of Control Arrangements” and “Related Party Transactions” in our definitive proxy statement for our 2003 Annual Meeting of Stockholders, which we intend to file with the SEC no later than April 30, 2003, are incorporated by reference into this Annual Report on Form 10-K.

ITEM 14 – CONTROLS AND PROCEDURES

     (a)  Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer (the principal executive officer) and our Executive Vice President - Finance and Chief Financial Officer (the principal financial officer), after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) on March 14, 2003, have concluded that, based on such evaluation, our disclosure controls and procedures were adequate and effective to ensure that material information relating to the company, including our consolidated subsidiaries, was made known to them by others within those entities, particularly during the period in which this Annual Report on Form 10-K was being prepared.

     (b)  Changes in Internal Controls. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, nor were there any significant deficiencies or material weaknesses in our internal controls. Accordingly, no corrective actions were required or undertaken.

16

PART IV

ITEM 15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  The following documents are filed as a part of this report:

(1) The financial statements from our 2002 Annual Report to Shareholders are attached hereto as Exhibit 13 and incorporated by reference into this Annual Report on Form 10-K. The specific items and the locations of such items are set forth below:

Item	Location
Consolidated Statements of Income	Annual Report under the caption “Biogen, Inc. and Subsidiaries Consolidated Statements of Income.”
Consolidated Balance Sheets	Annual Report under the caption “Biogen, Inc. and Subsidiaries Consolidated Balance Sheets.”
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.”
Report of Independent Accountants	Annual Report under the caption “Report of Independent Accountants.”

     With the exception of the portions of Biogen’s 2002 Annual Report to Shareholders specifically incorporated by reference into this Annual Report on Form 10-K, such report shall not be deemed filed as part of this Annual Report on Form 10-K.

(2) The Financial Statement Schedule from our 2002 Annual Report to Shareholders are attached hereto in Exhibit 13 and incorporated by reference into this Annual Report on Form 10-K. A list of such Financial Statement Schedules is set forth below:

Report of Independent Accountants on Financial Statement Schedule, Schedule II — Valuation and Qualifying Accounts and Reserves

(3) Exhibits

Exhibit No.	Description
(3.1)	Articles of Organization, as amended*
(3.2)	By-Laws, as amended and restated through September 27, 2002(q)
(4.1)	Form of Common Stock Share Certificate(e)
(4.2)	Rights Agreement, dated as of May 8, 1999, between the Registrant and First National Bank of Boston as the Rights Agent, including Certificate of Elimination of Series A Junior Participating Preferred Stock and Certificate of Designation of Series A-1 Junior Participating Preferred Stock(m)
(4.3)	Agreement and Amendment to Rights Agreement dated as of May 31, 2002 between the Registrant, State Street Bank and Trust Company, as the old Rights Agent, and EquiServe, Inc., as the new Rights Agent, amending the Rights Agreement, dated as of May 8, 1999, between the Registrant and State Street Bank and Trust Company (successor in interest to First National Bank of Boston) as the Rights Agent(p)
(10.1)	Independent Consulting and Project Agreement dated as of June 29, 1979 between the Registrant and Kenneth Murray(a)#
(10.2)	Minute of Agreement dated February 5, 1981 among the Registrant, The University Court of the University of Edinburgh and Kenneth Murray(a)#
(10.3)	Independent Consulting Agreement dated as of June 29, 1979 between the Registrant and Phillip A. Sharp(a)#
(10.4)	Project Agreement dated as of December 15, 1979 between the Registrant and Phillip A. Sharp(a)#

17

(10.5)	Share Restriction and Repurchase Agreement between the Registrant and Phillip A. Sharp, dated as of December 15, 1979 (a)#
(10.6)	Letter agreement regarding employment of James L. Vincent, dated September 23, 1985(b)#
(10.7)	Letter agreement amending employment arrangement between the Registrant and James L. Vincent, dated as of November 21, 1996(i)#
(10.8)	Form of Stock Option Agreement with James L. Vincent under 1985 Non-Qualified Stock Option Plan(d)#
(10.9)	Form of Stock Option Agreement with James L. Vincent under 1985 Non-Qualified Stock Option Plan (1995)(h)#
(10.10)	Form of Stock Option Agreement with James L. Vincent under 1985 Non-Qualified Stock Option Plan (1997 and subsequent grant)(j)#
(10.11)	Form of Indemnification Agreement between the Registrant and certain directors and executive officers(c)#
(10.12)	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)
(10.13)	First Amendment to Lease dated January 19, 1989, amending Cambridge Center Lease dated October 4, 1982(d)
(10.14)	Second Amendment to Lease dated March 8, 1990, amending Cambridge Center Lease dated October 4, 1982(d)
(10.15)	Third Amendment to Lease dated September 25, 1991, amending Cambridge Center Lease dated October 4, 1982(d)
(10.16)	Fourth Amendment to Lease dated October 6, 1993, amending Cambridge Center Lease dated October 4, 1982(j)
(10.17)	Fifth Amendment to Lease dated October 9, 1997, amending Cambridge Center Lease dated October 4, 1982(j)
(10.18)	Lease dated October 6, 1993 between North Parcel Limited Partnership and Biogen Realty Limited Partnership(f)
(10.19)	1983 Employee Stock Purchase Plan (as amended and restated through December 14, 2001)(o)#
(10.20)	1982 Incentive Stock Option Plan (as amended and restated through December 13, 2002)*#
(10.21)	1985 Non-Qualified Stock Option Plan (as amended and restated through February 7, 2003)*#
(10.22)	1987 Scientific Board Stock Option Plan (as amended and restated through February 7, 2003)*#
(10.23)	Voluntary Executive Supplemental Savings Plan (as amended and restated through December 14, 2001)(o)#
(10.24)	Amended and Restated Supplemental Executive Retirement Plan(j)#
(10.25)	Amendment No. 1 dated September 27, 1999 to Amended and Restated Supplemental Executive Retirement Plan(l)#
(10.26)	Voluntary Board of Directors Savings Plan (as amended and restated through December 14, 2001)(o)#
(10.27)	Exclusive License and Development Agreement dated December 8, 1979 between the Registrant and Schering Corporation(a)
(10.28)	Amendatory Agreement dated May 14, 1985 to Exclusive License and Development Agreement dated December 8, 1979 between the Registrant and Schering Corporation(b)
(10.29)	Amendment and Settlement Agreement dated September 29, 1988 to Exclusive License and Development Agreement dated December 8, 1979 between the Registrant and Schering Corporation(d)
(10.30)	Amendment dated March 20, 1989 to Exclusive License and Development Agreement dated December 8, 1979 between the Registrant and Schering Corporation(d)
(10.31)	License Agreement (United States) dated March 28, 1988 between the Registrant and SmithKline Beecham Biologicals, S.A. (as successor to Smith Kline-R.I.T, S.A.)(d)
(10.32)	License Agreement (International) dated March 28, 1988 between the Registrant and SmithKline Beecham Biologicals, S.A. (as successor to Smith Kline-R.I.T., S.A.)(d)
(10.33)	Sublicense Agreement dated as of February 15, 1990 among the Registrant, SmithKline Beecham Biologicals, S.S (as successor to SmithKline Biologicals, S.A.) and Merck and Co., Inc.(d)
(10.34)	Supplemental Amendment and Agreement dated as of March 1, 1994 between the Registrant and Schering Corporation(g)
(10.35)	Agreement and Amendment between the Registrant and Schering Corporation dated May 1, 1998(k)
(10.36)	Letter agreement amending employment arrangement between the Registrant and James L. Vincent, dated March 10, 2000(n)#
(10.37)	Letter agreement regarding employment of Burt Adelman, M.D., dated April 2, 1996(l)#
(10.38)	Letter agreement regarding employment of Peter Kellogg, dated June 21, 2000(o)#

18

(10.39)	Letter agreement regarding employment arrangement between the Registrant and Peter Kellogg, dated October 19, 2001(o)#
(10.40)	Letter agreement regarding employment arrangement between the Registrant and Burt Adelman, M.D., dated September 5, 2001(o)#
(10.41)	Renewal of Independent Consulting Agreement of Kenneth Murray, dated September 27, 2001(o)#
(10.42)	Biogen Savings Plan, as amended and restated by the Thirteenth Amendment, dated as of December 31, 2001(o)#
(10.43)	Executive Severance — Senior/Executive Vice President(o)#
(10.44)	Letter agreement regarding employment arrangement between the Registrant and Thomas J. Bucknum, dated June 11, 1999*#
(10.45)	Letter agreement regarding employment arrangement between the Registrant and Thomas J. Bucknum, dated October 19, 2001*#
(10.46)	Letter agreement between the Registrant and James L. Vincent, dated as of July 15, 2002(q)#
(10.47)	Letter agreement regarding James L. Vincent, dated as of July 15, 2002(q)#
(10.48)	Antegren Development and Marketing Collaboration Agreement between the Registrant and Elan Pharma International Limited, dated June 30, 2000*+
(10.49)	Letter agreement regarding employment arrangement between the Registrant and James C. Mullen, dated February 15, 2002*#
(10.50)	Employment Agreement between the Registrant and James C. Mullen, dated March 6, 2003*#
(10.51)	Letter agreement regarding employment arrangement between the Registrant and Hans Peter Hasler, dated June 22, 2001*#
(10.52)	Letter agreement regarding employment arrangement between the Registrant and Hans Peter Hasler, dated October 19, 2001*#
(13)	Incorporated portions of the Registrant’s Financial Statements from its 2002 Annual Report to Shareholders*
(21)	Subsidiaries of the Registrant*
(23)	Consent of PricewaterhouseCoopers LLP*

(a)	Previously filed with the SEC as an exhibit to the Registrant’s Registration Statement on Form S-1, File No. 2-81689, and incorporated herein by reference.
(b)	Previously filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1985, as amended, File No. 0-12042, and incorporated herein by reference.
(c)	Previously filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 0-12042, and incorporated herein by reference
(d)	Previously filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992, File No. 0-12042, and incorporated herein by reference
(e)	Previously filed with the SEC as an exhibit to the Registrant’s Registration Statement on Form S-3, File No. 33-51639 filed December 21, 1993, and incorporated herein by reference
(f)	Previously filed with the SEC 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
(g)	Previously filed with the SEC 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.
(h)	Previously filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995, File No. 0-12042, and incorporated herein by reference
(i)	Previously filed with the SEC as an exhibit to an amendment to the Registrant’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 1996, File No. 0-12042, and incorporated herein by reference)
(j)	Previously filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 0-12042, and incorporated herein by reference.
(k)	Previously filed with the SEC as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998, File No. 0-12042, and incorporated herein by reference.
(l)	Previously filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 0-12042, and incorporated herein by reference.
(m)	Previously filed with the SEC as an exhibit to the Registrant’s Current Report on Form 8-K dated April 27, 1999, and incorporated herein by reference.
(n)	Previously filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 0-12042, and incorporated herein by reference.
(o)	Previously filed with the SEC as an exhibit to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, File No. 0-12042, and incorporated herein by reference.
(p)	Previously filed with the SEC as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, File No. 0-12042, and incorporated herein by reference.
(q)	Previously filed with the SEC as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002, File No. 0-12042, and incorporated herein by reference.
*	Filed herewith
#	Management contract or compensatory plan or arrangement
+	Confidential treatment requested as to certain portions of this Exhibit, which portions have been omitted and filed separately with the SEC.

(b) Reports on Form 8-K

We did not file any reports on Form 8-K during the fourth quarter of 2002.

19

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 C. Mullen
	James C. Mullen Chairman, President and Chief Executive Officer    Dated March 14, 2003

     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 C. Mullen James C. Mullen	Chairman of the Board of Directors, President and Chief Executive Officer (principal executive officer)	March 14, 2003
/s/ Peter N. Kellogg Peter N. Kellogg	Executive Vice President — Finance and Chief Financial Officer (principal financial and accounting officer)	March 14, 2003
/s/ Alan Belzer Alan Belzer	Director	March 14, 2003
/s/ Harold W. Buirkle Harold W. Buirkle	Director	March 14, 2003
/s/ Mary L. Good Mary L. Good	Director	March 14, 2003
/s/ Thomas F. Keller Thomas F. Keller	Director	March 14, 2003
/s/ Roger H. Morley Roger H. Morley	Director	March 14, 2003
/s/ Kenneth Murray Kenneth Murray	Director	March 14, 2003
/s/ Eckhard Pfeiffer Eckhard Pfeiffer	Director	March 14, 2003
/s/ Phillip A. Sharp Phillip A. Sharp	Director	March 14, 2003
/s/ Alan K. Simpson Alan K. Simpson	Director	March 14, 2003
/s/ James W. Stevens James W. Stevens	Director	March 14, 2003

20

CERTIFICATIONS

I, James C. Mullen, certify that:

1.	I have reviewed this annual report on Form 10-K of Biogen, Inc.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c.	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls;

6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 14, 2003

/s/ James C. Mullen

James C. Mullen
Chairman, Chief Executive Officer and
President

21

I, Peter N. Kellogg, certify that:

1.	I have reviewed this annual report on Form 10-K of Biogen, Inc.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
c.	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls;

6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 14, 2003

/s/ Peter N. Kellogg

Peter N. Kellogg
Executive Vice President – Finance and
Chief Financial Officer

22

EXHIBIT INDEX

Exhibit No.	Description
(3.1)	Articles of Organization, as amended
(10.20)	1982 Incentive Stock Option Plan (as amended and restated through December 13, 2002)
(10.21)	1985 Non-Qualified Stock Option Plan (as amended and restated through February 7, 2003)
(10.22)	1987 Scientific Board Stock Option Plan (as amended and restated through February 7, 2003)
(10.44)	Letter agreement regarding employment arrangement between the Registrant and Thomas J. Bucknum, dated June 11, 1999
(10.45)	Letter agreement regarding employment arrangement between the Registrant and Thomas J. Bucknum, dated October 19, 2001
(10.48)	Antegren Development and Marketing Collaboration Agreement between the Registrant and Elan Pharma International Limited, dated June 30, 2000+
(10.49)	Letter agreement regarding employment arrangement between the Registrant and James C. Mullen, dated February 15, 2002*#
(10.50)	Employment Agreement between the Registrant and James C. Mullen, dated March 6, 2003
(10.51)	Letter agreement regarding employment arrangement between the Registrant and Hans Peter Hasler, dated June 22, 2001
(10.52)	Letter agreement regarding employment arrangement between the Registrant and Hans Peter Hasler, dated October 19, 2001
(13)	Incorporated portions of the Registrant’s Financial Statements from its 2002 Annual Report to Shareholders
(21)	Subsidiaries of the Registrant
(23)	Consent of PricewaterhouseCoopers LLP

+ Confidential treatment requested as to certain portions of this Exhibit, which portions have been omitted and filed separately with the SEC.

23 EX-3.1 3 b45838biexv3w1.txt EX-3.1 ARTICLES OF ORGANIZATION Exhibit 3.1 FORM CD-26-5M-8-83 The Commonwealth of Massachusetts Office of the Massachusetts Secretary of State MICHAEL JOSEPH CONNOLLY, SECRETARY ONE ASHBURTON PLACE, BOSTON, MASS. 02108 FEDERAL IDENTIFICATION NO. 04-3002117 ---------- CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING A SERIES OF A CLASS STOCK General Laws, Chapter 156B, Section 26 --------- We, James L. Vincent, President and Frederic A. Eustis, III, Clerk of BIOGEN, INC. - -------------------------------------------------------------------------------- (Name of Corporation) located at 14 CAMBRIDGE CENTER, CAMBRIDGE, MASSACHUSETTS 02142 do hereby certify that at a meeting of the directors of the corporation held on MAY 8, 1989 , the following vote establishing and designating a series of a class of stock and determine the relative rights and preferences thereof was duly adopted. (see Continuation Sheets 2A through 2LL attached hereto) NOTE: Votes for which the space provided above is not sufficient should be set out on continuation sheets to be numbered 2A, 2B, etc. Continuation sheets must have a left-hand margin 1 inch for binding and shall be 8 1/2" x 11". Only one side should be used. Continuation Sheet 2A --------------------- Biogen, Inc. ---------------- CERTIFICATE OF DESIGNATION OF $2.125 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK (Pursuant to Section 26 of the Massachusetts Business Corporation Law) ---------------- Biogen, Inc., a corporation organized and existing under the Business Corporation Law of the Commonwealth of Massachusetts (hereinafter called the "Corporation"), do hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation as required by Section 26 of the Business Corporation Law (the "MBCL") at a meeting duly called and held on May 8, 1989: RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the "Board of Directors" of the "Board") in accordance with the provisions of the Articles of Organization, the Board of Directors hereby creates a series of $2.125 Convertible Exchangeable Preferred Stock, par value $.01 per shares, of the Corporation and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof (in addition to any provisions set forth in the Articles of Organization of the Corporation which are applicable to the preferred stock of all classes and series) as follows: Continuation Sheet 2B --------------------- $2.125 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK: Section 1. DESIGNATION AND AMOUNT. The Shares of such series shall be designated as "$2.125 Convertible Exchangeable Preferred Stock" (the "Exchangeable Preferred Stock") and the number of shares constituting the Exchangeable Preferred Stock shall be 2,760,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; PROVIDED; that no decrease shall reduce the number of shares of Exchangeable Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Exchangeable Preferred Stock. Section 2. STATED CAPITAL. The amount to be represented in stated capital at all times for each share of Exchangeable Stock shall be $.01. Section 3. RANK. All Exchangeable Preferred Stock shall rank prior to all of the Corporation's Common Stock, par value $.01 per share (the "Common Stock"), and Series A Junior Participating Preferred Stock, $.01 par value (the "Series A Preferred Stock"), now or hereafter issued, both as to payment of dividends and as to distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary. Continuation Sheet 2B --------------------- Section 4. DIVIDENDS AND DISTRIBUTIONS. The holders of shares of Exchangeable Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for such purpose, dividends at the rate of $2.125 per annum per share, and no more, which shall be fully cumulative, shall accrue without interest from the date of original issuance and shall be payable in cash quarterly on March 15, June 15, September 15, and December 15 of each year commencing September 15, 1989 (except that if such date is a Saturday, Sunday or legal holiday, then such dividend shall be payable on the next day that is not a Saturday, Sunday or legal holiday) to holders of record as they appear on the stock books of the Corporation on such record dates, not more than 60 nor less than 10 day preceding the payment dates for such dividends, as shall be fixed by the Board. The amount of dividends payable per share of Exchangeable Preferred Stock for each quarterly dividend period shall be computed by dividing the annual dividend amount by four. The amount of dividends payable for the initial dividend period and any period shorter than a full quarterly dividend period shall be computed on the basis of a 360-day year of twelve 30-day months. No dividends or other distributions, other than dividends payable solely in shares of Common Stock or Series A Preferred Stock or other capital stock of the Corporation ranking junior as to dividends to the Exchangeable Preferred Stock (collectively, the "Junior Continuation Sheet 2D --------------------- Dividend Stock"), shall be paid or set apart for payment on, and no purchase, redemption or other acquisition shall be made by the Corporation of, any shares of Junior Dividend Stock unless and until all accrued and unpaid dividends on the Exchangeable Preferred Stock, including the full dividend for the then-current quarterly dividend period, shall have been paid or declared and set apart for payment. If at any time any dividend on any capital stock or the Corporation ranking senior as to dividends to the Exchangeable Preferred Stock (the "Senior Dividend Stock") shall be in default, in whole or in part, no dividend shall be paid or declared and set apart for payment on the Exchangeable Preferred Stock unless and until all accrued and unpaid dividends with respect to the Senior Dividend Stock, including the full dividends for the then-current dividend period, shall have been paid or declared and set apart for payment, without interest. No full dividends shall be paid or declared and set apart for payment on any class or series of the Corporation's capital stock ranking, as to dividends, on a parity with the Exchangeable Preferred Stock (the "Parity Dividend Stock") for any period unless full cumulative dividends have been, or contemporaneously are, paid or declared and set apart for such payment on the Exchangeable Preferred Stock for all dividend payment periods terminating on or prior to the date of payment of such full cumulative dividends. No full dividends shall be Continuation Sheet 2E --------------------- paid or declared and set apart for payment on the Exchangeable Preferred Stock for any period unless full cumulative dividends have been, or contemporaneously are, paid or declared and set apart for payment on the Parity Dividend Stock for all dividend period terminating on or prior to the date of payment of such full cumulative dividends. When dividends are not paid in full upon the Exchangeable Preferred Stock and the Parity Dividend Stock, all dividends paid or declared and set apart for payment upon shares of Exchangeable Preferred Stock and the Parity Dividend Stock shall be paid or declared and set apart for payment pro rata, so that the amount of dividends paid or declared and set apart for payment per share on the Exchangeable Preferred Stock and the Parity Dividend Stock shall in all cases bear to each other the same ratio that accrued and unpaid dividends per share on the shares of Exchangeable Preferred Stock and the Parity Dividend Stock bear to each other. Any reference to "distribution" contained in this Section 4 shall be deemed to include any stock dividend or distributions made in connection with any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary. Section 5. LIQUIDATION PREFERENCE. In the event of a liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of Exchangeable Continuation Sheet 2F --------------------- Preferred Stock shall be entitled to receive out of the assets of the Corporation, whether such assets are stated capital or surplus of any nature, an amount equal to the dividends accrued and unpaid thereon to the date of final distribution to such holders, whether or not declared, without interest, and a sum equal to $25 per share, and no more, before any payment shall be made or any assets distributed to the holders of Common Stock, Series A Preferred Stock or any other class or series of the Corporation's capital stock ranking junior as to liquidation rights to the Exchangeable Preferred Stock (collectively, the "Junior Liquidation Stock"); PROVIDED, HOWEVER, that such rights shall accrue to the holders of Exchangeable Preferred Stock only in the event that the Corporation's payments with respect to the liquidation preferences of the holders of capital stock of the Corporation ranking senior as to liquidation rights to the Exchangeable Preferred Stock (the "Senior Liquidation Stock") are fully met. The entire assets of the Corporation available for distribution after the liquidation preferences of the Senior Liquidation Stock are fully met shall be distributed ratably among the holders of the Exchangeable Preferred Stock and any other class or series of the Corporation's capital stock which may hereafter be created having a parity as to liquidation rights with the Exchangeable Preferred Stock in proportion to the respective preferential amounts to which each is entitled (but Continuation Sheet 2G --------------------- only to the extent of such preferential amounts). Neither a consolidation or merger of the Corporation with another corporation nor a sale or transfer of all or part of the Corporation's assets for cash securities or other property will be considered a liquidation, dissolution or winding up of the Corporation. Section 6. REDEMPTION AT OPTION OF THE CORPORATION. The Corporation may not redeem the Exchangeable Preferred Stock prior to June 15, 1991. The Corporation, at its option, may after June 15, 1991, redeem at any time all, or from time to time a portion, of the Exchangeable Preferred Stock on any date set by the Board of Directors, if redeemed during the twelve-month period beginning June 15 of the year specified below, at the following cash redemption prices per share:

Year Redemption Price ---- ---------------- 1991 $26.7000 1992 $26.4875 1993 $26.2750 1994 $26.0625 1995 $25.8500 1996 $25.6375 1994 $25.4250 1998 $25.2125

and thereafter at $25 per share, plus, in each case an amount in cash equal to all dividends on the Exchangeable Preferred Stock accrued and unpaid thereon, whether or not declared, pro rata to the date fixed for redemption, each sum being hereinafter referred to as the "Redemption Price." Continuation Sheet 2H --------------------- In case of the redemption of less than all of the then outstanding Exchangeable Preferred Stock, the Corporation shall designate by lot, or in such other manner as the Board of Directors may determine, the shares to be redeemed, or shall effect such redemption pro rata. Notwithstanding the foregoing, the Corporation shall not redeem less than all of the Exchangeable Preferred Stock at any time outstanding until all dividends accrued and in arrears upon all Exchangeable Preferred Stock than outstanding shall have been paid for all past dividend periods. Not more than 60 nor less than 30 days prior to the redemption date, notice by first class mail, postage prepaid, shall be given to the holders of record of the Exchangeable Preferred Stock to be redeemed, address to such stockholders at their last addresses as shown on the books of the Corporation. Each such notice of redemption shall specify the date fixed for redemption, the redemption price, the place or places of payment, the then effective conversion price and that the right of holders of shares of Exchangeable Preferred Stock being redeemed to exercise their conversion right shall terminate as to such shares at the close of business on the date fixed for redemption (PROVIDED that no default by the Corporation in the payment of the Redemption Price shall have occurred and be continuing), that payment will be made upon presentation and surrender of the shares of Exchangeable Continuation Sheet 2I --------------------- Preferred Stock, that accumulated but unpaid dividends to the date fixed for redemption will be paid on the date fixed for redemption, and that on and after the redemption date, dividends will cease to accumulate on such shares. Any notice which is mailed as herein provided shall be conclusively presumed to have been duly given, whether or not the holder of the Exchangeable Preferred Stock receives such notice; and failure to give such notice by mail, or any defect in such notice, to the holders of any shares designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Exchangeable Preferred Stock. On or after the date fixed for redemption as stated in such notice, each holder of the shares called for redemption shall surrender the certificate (or certificates) evidencing such shares to the Corporation at the place designated in such notice and shall thereupon be entitled to receive payment of the Redemption Price. If fewer than all shares represented by any such surrendered certificate (or certificates) are redeemed, a new certificate shall be issued representing the unredeemed shares. If, on the date fixed for redemption, funds necessary for the redemption shall be available therefor and shall have been irrevocably deposited or set aside, then, notwithstanding that the certificates evidence any shares so called for redemption shall not have been surrendered, the dividends with respect to the shares so called shall cease to Continuing Sheet 2J ------------------- accrue after the date fixed for redemption, the shares shall no longer be deemed outstanding, the holders thereof shall cease to be stockholders, and all rights whatsoever with respect to the shares so called for redemption (except the right of the holders to receive the Redemption Price without interest upon surrender of their certificates therefor) shall terminate Shares of Exchangeable Preferred Stock redeemed by the Corporation shall be restored to the status of authorized but unissued shares of preferred stock of the Corporation shall be restored to the status of authorized but unissued shares of preferred stock of the Corporation, pursuant to Section 21A of the MBCL, without designation as to series, and may thereafter be reissued, but not as shares of Exchangeable Preferred Stock. Section 7. REDEMPTION AT OPTION OF HOLDERS. In the event that (i) any person (with the defined meaning as used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as defined in Ruled 13d-3 under the Exchange Act) of more than 50% of the Common Stock other than: (x) in a transaction or series of transactions in which such person acquires at least 50% of the total securities beneficially owned by such person in direct issuances from the Corporation or (y) by means of a merger of the Corporation with or into a subsidiary or affiliate of such person (a "Share Acquisition"), or (ii) the Corporation is a party to a business combination, including a merger or consolidation or the sale of all or substantially all Continuation Sheet 2K --------------------- of its assets and as a result of such business combination, the Exchangeable Preferred Stock thereafter is not convertible into common stock of the Corporation or of the ultimate parent of the Corporation which common stock is traded on the New York Stock Exchange, the American Stock Exchange or through the NASDAQ National Market System, each holder of Exchangeable Preferred Stock, subject to the conditions of this Section 7, shall have the option to require the Corporation to redeem all, but not less than all, of the Exchangeable Preferred Stock owned by such holder at $25 per share plus accrued and unpaid dividends, whether or not declared, pro rata to the redemption date. In the event of any Share Acquisition, the Corporation shall, at the close of business on the date which is 45 days after the date of such Share Acquisition, upon the written demand of any record holder of Exchangeable Preferred Stock who so requests, redeem all of the Exchangeable Preferred Stock owned by such holder at $25 per share plus accrued and unpaid dividends to but not including such 45th day. Within five days after the Corporation has knowledge that such Share Acquisition has occurred, it shall mail to each record holder of Exchangeable Preferred Stock a form of written demand to be used by such holder to exercise his right of redemption (a "Demand Form") and a notice which shall disclose the occurrence of the Share Acquisition and the right of such holder to Continuation Sheet 2L --------------------- require the Corporation to redeem such Exchangeable Preferred Stock pursuant to this Section 7 and shall state the redemption date, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of the shares of Exchangeable Preferred Stock and the date by which such holder must notify the Corporation if it elects to require the Corporation to make such redemption. Within 15 days after the Corporation has knowledge that a Share Acquisition has occurred, it also shall deposit in trust with The First National Bank of Boston ("The Bank of Boston") or a bank having a combined capital and surplus in excess of $50,000,000, as trustee, for the benefit of holder of Exchangeable Preferred Stock which elect to require the Corporation to redeem such stock pursuant to this Section 7, funds sufficient to redeem on the redemption date of all of the Exchangeable Preferred Stock outstanding on the date of delivery of the notice referred to above. Each record holder of Exchangeable Preferred Stock which elects to require the Corporation to redeem on the redemption date all of the Exchangeable Preferred Stock which such holder owns shall deliver to eh Company not later than the redemption date a completed Demand Form relating to the Exchangeable Preferred Stock to be redeemed. After the redemption date, the Corporation shall be entitled to receive from the funds which it deposited in trust for the redemption of Exchangeable Preferred Stock on such redemption date an amount equal Continuation Sheet 2M --------------------- to that portion of such funds which was deposited in respect of shares of Exchangeable Preferred Stock which the holders thereof did not elect to have redeemed pursuant to this Section 7. The term "redemption date," as used in connection with a redemption resulting from a Share Acquisition shall mean the close of business on the 45th day after the date of the Share Acquisition. In the event of any business combination described in the first paragraph of this Section 7, the Corporation shall, immediately prior to the effectiveness of such business combination, upon demand of any record holder of Exchangeable Preferred Stock which so requests, redeem all of the Exchangeable Preferred Stock owned by each such holder at $25 per share plus accrued and unpaid dividends to the date on which such business combination occurs. Not later than 35 days prior to the effectiveness of any such business combination, the Corporation shall mail to each record holder of Exchangeable Preferred Stock a Demand Form and a notice which shall disclose such business combination and the right of such holder of Exchangeable Preferred Stock pursuant to this Section 7 and shall state the anticipated redemption date, the redemption price, the place of places that payment will be made upon presentation and surrender of the shares of Exchangeable Preferred Stock and the date by which Continuation Sheet 2N --------------------- such holder must notify the Corporation if its elects to require the Corporation to make such redemption. Prior to the effectiveness of such business combination, the Corporation also shall deposit in trust it The Bank of Boston or a bank having a combined capital and surplus in excess of $50,000,00, as trustee, for the benefit of holders of Exchangeable Preferred Stock which elect to require the Corporation to redeem such stock pursuant to this Section 7, immediately available funds sufficient to redeem on the redemption date all of the Exchangeable Preferred Stock which, pursuant to this Section 7, holders have elected to require the Corporation to redeem. Each record holder of Exchangeable Preferred Stock which elects to require the Corporation to redeem on the redemption date all of the Exchangeable Preferred Stock which it owns must submit to the Corporation not later than the redemption date a completed Demand Form relating to the Exchangeable Preferred Stock to be redeemed. The Corporation agrees that it will not complete any business combination described in this Section 7 unless proper provision has been made to satisfy its obligations under this Section 7. The term "redemption date," as used in connection with a redemption upon the occurrence of a business combination under this Section 7, shall mean the time immediately prior to the effectiveness of such business combination referred to therein. Any notice by the Corporation which is mailed as herein provided shall be conclusively presumed to have been Continuation Sheet 2O --------------------- duly given, whether or not the holder of Exchangeable Preferred Stock receives such notice; and failure to give such notice by mail, or any defect in such notice, to the holders of any shares shall not affect the validity of the proceedings for the redemption of any other shares of Exchangeable Preferred Stock. An election by a holder of Exchangeable Preferred Stock to have the Corporation redeem such stock pursuant to this Section 7 shall become irrevocable on the relevant redemption date. On or after the date fixed for redemption as stated in any notice delivered by the Corporation, each holder of the shares called for redemption shall surrender the certificates evidence such shares to the Corporation at the place designated in such notice and shall thereupon be entitled to receive payment of the relevant redemption price in accordance with the terms of this Section 7. If any such certificates shall be so surrendered in connection with a redemption required to be made as a result of any business combination described in the first paragraph of this Section 7 and for whatever reason such business combination shall cause such certificates to be returned promptly to the respective holder thereof. If, on the date fixed for redemption under any provision of this Section 7, funds necessary for the redemption shall be available therefor and shall have been deposited in trust as required by this Section 7, then in the case of any Continuation Sheet 2P --------------------- shares of Exchangeable Preferred Stock to be redeemed as a result of a Share Acquisition, after the close of business on the redemption date and, in the case of any shares of Exchangeable Preferred Stock to be redeemed as a result of a business combination described in this first paragraph of this Section 7, after the effectiveness of the business combination, notwithstanding that the certificates evidencing any shares which the holders thereof had elected to have redeemed shall not have been surrendered, the dividends with respect to such shares shall cease to accrue, such shares shall no longer be deemed outstanding, the holders thereof shall cease to be stockholders, and all rights whatsoever with respect to such shares (except the right of the holders to receive the relevant redemption price without interest upon surrender of this certificates therefor) shall terminate. Shares of Exchangeable Preferred Stock redeemed by the Corporation shall be restored to the status of authorized but unissued shares of preferred stock of the Corporation, pursuant to Section 21A of the MBCL, without designation as to series, and may thereafter be reissued, but not as shares of Exchangeable Preferred Stock. Section 8. NO SINKING FUND. The shares of Exchangeable Preferred Stock shall not be subject to the operation of a purchase, retirement or sinking fund. Section 9. CONVERSION. The holders of the Exchangeable Preferred Stock may, upon surrender of the Continuation Sheet 2Q --------------------- certificates therefor, convent any or all of their shares of Exchangeable Preferred Stock into fully paid and nonassessable shares of Common Stock and such other securities and property as hereafter provided at any time after issuance thereof, but not later than (i) the close of business on the date, if any, fixed for redemption thereof in any notice of redemption given pursuant to the provisions of Section 6 hereof if there is no default in payment of the Redemption Price, (ii) in the case of Exchangeable Preferred Stock which the holder thereof has elected to require the Corporation to redeem in the event of a Share Acquisition pursuant to Section 7 hereof, the closet of business on the date fixed for the redemption thereof in any notice of redemption given pursuant to the provisions of Section 7 hereof and, in the case of a redemption to be made as a result of a business combination described in the first paragraph of Section 7 hereof, immediately prior to the effectiveness of such business combination, in either case if there is no default in payment of the relevant redemption price or (iii) the close of business on the date, if any, as may have been fixed for the exchange thereof in any notice of exchange given pursuant to the provisions of Section 11 hereof if any amount equal to all accrued and unpaid dividends to the date of exchange shall have been paid or declared and set apart for payment and the Debentures, as defined in Section 11, are legally and validly issuable upon surrender of shares of Continuation Sheet 2R --------------------- Exchangeable Preferred Stock. Each share of Exchangeable Preferred Stock shall be convertible at the office of any transfer agent for the Exchangeable Preferred Stock, and at such other office or offices, if any, as the Board of Directors may designate, into that number of fully paid and nonassessable shares of Common Stock (calculated as to each conversion to the nearest 1/100th of a share) as shall be equal to the Conversion Rate, determined as hereinafter provided, in effect at the time of conversion. Shares of Exchangeable Preferred Stock may initially be converted into full shares of Common Stock at the rate of 1,6393 shares of Common Stock for each share of Exchangeable Preferred Stock, subject to adjustment as hereinafter provided (the "Conversion Rate"). The "Conversion Price" shall be made in respect of cash dividends on Common Stock or Exchangeable Preferred Stock that may be accrued and unpaid at the date of surrender for conversion. Notwithstanding anything in this Section 9 to the contrary, no change in the Conversion Rate shall actually be made until the cumulative effect of the adjustments called for by this Section 9 since the date of the last change in the Conversion Rate would change the Conversion Rate by more than 1%. However, once the cumulative effect would result in a change, then the Conversion Rate shall actually be changed to reflect all adjustments called for by his Section 9 and not previously Continuation Sheet 2S --------------------- made. Notwithstanding anything in this Section 9, no change in the Conversion Rate shall be made which would result in a Conversion Price of less than the par value of the Common Stock into which shares of Exchangeable Preferred Stock are at the time convertible. Each share of Common Stock issued upon conversion of the Exchangeable Preferred Stock will be accompanied by one Right to Purchase Series A Preferred Stock (the "Right") which shall entitle the registered holder of the related share of Common Stock to the privileges relating to such Right as specified in the Rights Agreement, dated as of May 8, 1989, between the Corporation and The First National Bank of Boston, unless such conversion occur after May 8, 1999 or the Rights are redeemed by the Corporation prior to such conversion. The right of the holders of Exchangeable Preferred Stock to convert their shares shall be exercised by surrendering for such purpose to the Corporation or its agent, as provided above, certificates representing shares to be converted, duly endorsed in blank or accompanied by proper instruments or transfer. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery upon conversion of shares of Common Stock or other securities or property in a name other than that of the holder of the shares of the Exchangeable Preferred Stock being converted and the Continuation Sheet 2T --------------------- Corporation shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons requesting the issuance thereof shall have paid to the Corporation the amount of any such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. A number of shares of the authorized but unissued Common Stock sufficient to provide for the conversion of the Exchangeable Preferred Stock outstanding upon the basis hereinbefore provided shall at all times be reserved by the Corporation, free from preemptive rights, for such conversion, subject to the provisions of the next succeeding paragraph. If the Corporation shall issue any securities or make any change in its capital structure which would change the number of shares of Common Stock into which each share of the Exchangeable Preferred Stock shall be convertible as herein provided, the Corporation shall at the same time also make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Exchangeable Preferred Stock on the new basis. In case of any consolidation or merger of the Corporation with any other corporation (other than a wholly owned subsidiary of the Corporation), or in case of any sale or transfer of all or substantially all of the assets of the Continuation Sheet 2U --------------------- Corporation, or in the case of any share exchange pursuant to which all of the outstanding shares of Common Stock are converted into other securities or property, the Corporation shall make appropriate provision or cause appropriate provision to be made so that holders of each share of Exchangeable Preferred Stock then outstanding shall have the right thereafter to convert such share of Exchangeable Preferred Stock into the kind and amount of shares of stock and other securities and property receivable upon such consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock into which such shares of Exchangeable Preferred Stock might have been converted immediately prior to that effective date of such consolidation, merger, sale, transfer or share exchange. If in connection with any such consolidation, merger, sale, transfer or share exchange, each holder of shares of Common Stock is entitled to elect to receive either securities, case or other assets upon completion of such transaction, the Corporation shall provide or cause to be provided to each holder of Exchangeable Preferred Stock the right to elect the securities, cash or other assets into which the Exchangeable Preferred Stock held by such holder shall be convertible after completion of any such transaction on the same terms and subject to the same conditions applicable to holders of the Common Stock (including, without limitation, notice of the right to elect, Continuation Sheet 2V --------------------- limitations on the period in which such election shall be made and the effect of failing to exercise the election). The Corporation shall not effect any such transaction unless the provisions of this paragraph have been compiled with. The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges. Upon the surrender of certificates representing shares of Exchangeable Preferred Stock, the person converting shall be deemed to be the holder or record of the Common Stock issuable upon such conversion and all rights with respect to the shares surrendered shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets as herein provided. No fractional shares of Common Stock shall be issued upon conversion of Exchangeable Preferred Stock but, in lieu of any fraction of a share of Common Stock which would otherwise be issuable in respect to the aggregate number of such shares surrendered for conversion at one time by the same holder, the Corporation shall pay in cash an amount equal to the product of (i) the Closing Price of a share of Common Stock on the last trading day before the conversion date and (ii) such fraction of a share. The "Closing Price" for each day shall be the last reported sales price regular way or, in case no sale takes place on such day, the average of the closing bid and asked Continuation Sheet 2W --------------------- prices regular way on such day, in either case as reported on the New York Stock Exchange Composite Tape, or, if the Common Stock is not listed or admitted to trading on such Exchange, on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, if not listed or admitted to trading on any national securities exchange, on the NASDAQ National Market System, or, if not admitted for quotation on the NASDAQ National Market System, the average of the high bid and low asked prices on such day as recorded by the National Association of Securities Dealers, Inc. through NASDAQ shall not have reported any hid and asked prices for the Common Stock on such day, the average of the bid and asked prices for such day as furnished by any New York Stock Exchange member firm selected from time to time by the Corporation for such purpose, or if no such bid and asked prices can be obtained from any such firm, the fair market value of one share of Common Stock on such day as determined in good faith by the Board of Directors of the Corporation. The Conversion Rate shall be adjusted from time to time under certain circumstances, subject to the provisions of the last three sentences of the first paragraph of this Section 9 as follows: (1) In case the Corporation shall (w) pay a dividend or make a distribution on its Common Stock in shares of its Continuation Sheet 2X --------------------- capital stock, (x) subdivide its outstanding Common Stock into a greater number of shares, (y) combine the shares of its outstanding Common Stock into a smaller number of shares, or (z) issue by reclassification of its Common Stock any shares of its capital stock, then in each such case the Conversion Rate in effect immediately prior thereto shall be proportionately adjusted so that the holder of any Exchangeable Preferred Stock thereafter surrendered for conversion shall be entitled to receive, to the extent permitted by applicable law, the number and kind of shares of capital stock of the Corporation which it would have owned or have been entitled to receive after the happening of such event had such Exchangeable Preferred Stock been converted immediately prior to the record date (or if no record date has been established in connection with such event, the effective date for such action). An adjustment pursuant to this subparagraph (1) shall become effective immediately after the record date in the case of a stock dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. (2) In the case the Corporation shall issue rights or warrants to all holders of the Common Stock entitling such holders to subscribe for or purchase Common Stock on the record date referred to below at a price per share less Continuation Sheet 2Y --------------------- than the average daily Closing Price of the Common Stock for the 30 consecutive business days commencing 45 business days before the record date (the "Current Market Price"), then in each such case the Conversion Rate in effect on such record date shall be adjusted in accordance with the formula O + N C' = C x --------------- O + N x P ----- M where C' = the adjusted Conversion Rate. C = the current Conversion Rate. O = the number of shares of Common Stock outstanding on the record date. N = the number of additional shares of Common Stock offered. P = the offering price per share of the additional shares. M = the Current Market Price per share of Common Stock on the record date. Such adjustment shall become effective immediately after the record ate for the determination of stockholders entitled to receive such rights or warrants. If any or all of such rights or warrants are not so issued or expire or terminate before being exercised, the Conversion Rate then in effect shall appropriately readjusted. (3) In the case the Corporation shall, by dividend or otherwise, distribute to all holders of its Junior Stock Continuation Sheet 2Z --------------------- (as hereinafter defined) evidence of its indebtedness or assets (including securities, but excluding any warrants or subscription rights referred to in subparagraph (2) above, any dividend or distribution paid in cash out of the retained earnings of the Corporation and any dividend or distribution referred to in subparagraph (1) above), then in each such case the Conversion Rate then in effect shall be adjusted in accordance with the formula M C' = C x --------------- M - F where C' = the adjusted Conversion Rate. C = the current Conversion Rate. M = the Current Market Price per share of Common Stock on the record date mentioned below. F = the amount of such cash dividend and/or the fair market value on the record date of the assets, securities, rights or warrants to be distributed divided by the number of shares of Common Stock outstanding on the record date. The Board of Directors of the Corporation shall determine the fair market value. Such adjustment shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution. For purposes of this subparagraph (3), "Junior Stock" shall include any class of capital stock ranking junior or PARI PASSU as to dividends or upon liquidation to the Exchangeable Preferred Stock. Continuation Sheet 2AA ---------------------- (4) All calculations hereunder shall be made to the nearest cent or to the nearest 1/100 of a share, as the case may be. (5) In the event that at any time, as a result of an adjustment made pursuant to subparagraph (1) of this Section 9, the holder of any Exchangeable Preferred Stock thereafter surrendered for conversion shall become entitled to receive securities, cash or assets other than common Stock, the number or amount of such securities or property so receivable upon conversion shall be subject of adjustment form time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in subparagraphs (1) to (4), inclusive, above. Except as otherwise provided above in this Section 9 above, no adjustment in the Conversion Rate shall be made in respect of any conversion for share distributions or dividends theretofore declared and paid or payable on the Common Stock. Whenever the Conversion Rate is adjusted as herein provided, the Corporation shall send to each transfer agent for the Exchangeable Preferred Stock, and to the principal securities exchange, if any, on which the Exchangeable Preferred Stock is traded, a statement signed by the Chairman of the Board, the President or any Vice President of the Corporation and by its Treasurer or its Clerk stating the adjusted Conversion Rate determined as provided in this Section Continuation Sheet 2BB ---------------------- 9 and any adjustment so evidenced, given in good faith, shall be binding upon all stockholders and upon the Corporation. Whenever the Conversion Rate is adjusted the Corporation will give notice by mail stating the adjustment and the Conversion Rate at the time of, and together with, the next dividend payment to the holders of record of Exchangeable Preferred Stock. Notwithstanding the foregoing notice provisions, failure by the Corporation to give such notice or a defect in such notice shall not affect the binding nature of such corporate action of the Corporation. Whenever the Corporation shall propose to take any of the actions specified in the fifth paragraph or in subparagraphs (1), (2), (3) of the ninth paragraph of this Section 9 which would result in any adjustment in the Conversion Rate under this Section 9, the Corporation shall cause a notice to be mailed at least 15 days prior to the date on which the books of the Corporation will close or on which a record will be taken for such action, to the holders of record of the outstanding Exchangeable Preferred Stock on the date of such notice. Such notice shall specify the action proposed to be taken by the Corporation and the date as of which holders of record of the Common Stock shall participate in any such actions or be entitled to exchange their Common Stock for securities or other property, as the case may be. Failure by Continuation Sheet 2CC ---------------------- the Corporation to mail the notice or defect in it shall not affect the validity of the transaction. Notwithstanding any other provision of this Section 9, no adjustment in the Conversion Rate need to be made (1) for a transaction referred to in subparagraphs (1), (2) or (3) of the ninth paragraph of this Section 9 if holders or Exchangeable Preferred Stock are to participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of Common Stock or, in the case of a transaction referred to in said subparagraph (3), holders of Junior Stock participate in the transaction; (ii) for sales of Common Stock pursuant to a plan for reinvestment of dividends and interest or pursuant to any plan adopted by the Corporation for the benefit of its employees or consultants; (iii) for a change in par value of the Common Stock; or (iv) after the Exchangeable Preferred Stock becomes convertible into cash (no interest shall accrue on the cash). Section 10. VOTING RIGHTS. The holders of Exchangeable Preferred Stock will not have any voting rights except as set forth below or as otherwise from time to time required by law. Whenever dividends on the Exchangeable Preferred Stock or any other class or series of Parity Dividend Stock shall be in arrears in an equal to at least six quarterly dividends (whether or not consecutive) the holders of Continuation Sheet 2DD ---------------------- the Exchangeable Preferred Stock (voting separately as a class with all other affected classes or series of the Parity Dividend Stock upon which like voting rights have been conferred and are exercisable will be entitled to vote for and elect two additional directors. Such right of the holders of Exchangeable Preferred Stock to vote for the election of such two directors may be exercised at any annual meeting or at any special meeting called for such purpose as hereinafter provided or at any adjournment thereof, until dividends in default on such outstanding shares of Exchangeable Preferred Stock shall have been paid in full (or such dividends shall have been declared and funds sufficient therefor set apart for payment), at which time the term of office of the two directors so elected shall terminate automatically (subject to revesting in the event of each and every subsequent default of the character specified in the preceding sentence). So long as such right to vote continues, the Clerk of the Corporation may call, and upon the written request of the holders of record of 10% of the outstanding shares of Exchangeable Preferred Stock addressed to him at the principal office of the Corporation shall call, a special meeting of the holders of such shares for the election of such two directors, as provided herein. Such meeting shall be held not less than 45 nor more than 90 days after the accrual of such right, at the place and upon the notice provided by law and in the By-laws of the Corporation for the holding of meetings of stockholders. No such special meeting Continuation Sheet 2EE ---------------------- or adjournment thereof shall be held on a date less than 30 days before an annual meeting of stockholders or any special meeting in lieu thereof, PROVIDED that at such annual meeting appropriate provisions are made to allow the holders of the Exchangeable Preferred Stock to exercise such right at such meeting. If at any such annual or special meeting or any adjournment thereof the holders of a majority of the then outstanding shares of Exchangeable Preferred Stock entitled to vote in such election shall be present or represented by proxy, then the authorized number of directors of the Corporation shall be increased by two, and the holders of Exchangeable Preferred Stock shall be entitled to elect such two additional directors. Directors so elected shall serve until the next annual meeting or until their successors shall be elected and shall qualify, unless the term of office of the persons so elected as directors shall have terminated by virtue of the payment in full of all dividends in arrears (or such dividends shall have been declared and funds sufficient therefor set apart for payment.) In case of any vacancy occurring among the directors so elected by the holders of Exchangeable Preferred Stock, the remaining director who shall have been so elected may appoint a successor to hold office for the unexpired term of the director whose place shall be vacant, and such successor shall be deemed to have been elected by the holders of Exchangeable Preferred Stock. If both directors so elected by the holders of Exchangeable Preferred Stock shall cease to Continuation Sheet 2FF ---------------------- serve as directors before their terms shall expire, the holders of Exchangeable Preferred Stock then outstanding and entitled to vote for such directors may, at a special meeting of such holders called as provided above, elect successors to hold office for the unexpired terms of the directors whose places shall be vacant. Without the consent or affirmative vote of the holders of at least a majority of the outstanding shares of Exchangeable Preferred Stock, voting separately as a class, the Corporation shall not authorize, create or issue any shares of any other class or series of capital stock ranking senior to the Exchangeable Preferred Stock as to dividends or upon liquidation. The affirmative vote or consent of the holders of at least a majority of the outstanding shares of the Exchangeable Preferred Stock voting separately as a class, will be required for any amendment, alternative or repeal, whether by merger or consolidation or otherwise, of the Corporation's Articles of Organization if the amendment, alternative or repeal adversely affects the powers, preferences or special rights of the Exchangeable Preferred Stock. To the extent that under Massachusetts law the vote of the holders of the Exchangeable Preferred Stock, voting separately as a class, may be required to authorize a given action of the Corporation, including, but not limited to, an action pursuant to Section 78 of the Massachusetts Business Corporation Law, the affirmative vote or consent of the holders of at least a majority of the outstanding shares of the Continuation Sheet 2GG ---------------------- Exchangeable Preferred Stock shall constitute the approval of such action by the class. Section 11. EXCHANGE. The Exchangeable Preferred Stock is exchangeable at the option only of the Corporation in whole, but not in part, on any dividend payment date beginning June 15, 1991 for the Corporation's 8 1/2% Convertible Subordinated Debentures Due 2014 (the "Debentures"), PROVIDED that prior to the dividend payment date on which the Exchangeable Preferred Stock is to be exchanged for the Debentures, the Corporation shall have delivered to the Trustee under the Indenture between the Corporation and the Bank of Boston, as Trustee, relating to the Debentures (the "Indenture"), an Option of Counsel (as such term is defined in the Indenture), dated the dividend payment date, substantially to the following effect, with such changes therein as such Trustee shall approve: As of the date of such opinion, (1) the Corporation has duly authorized the exercise of its right to redeem the Exchangeable Preferred Stock in exchange for th Debentures and has exercised such option; (2) the Corporation has full corporate power and authority to enter into the Indenture and to perform its obligations under the Indenture and to issue and deliver the Debentures; (3) the Indenture has been duly authorized, execute and delivered and, assuming the due authorization, execution and delivery of the Indenture by the Trustee, is a valid and binding obligation of the Corporation enforceable against the Corporation in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles; (4) no consent or approval of any governmental authority or other person or entity is required in Continuation Sheet 2HH ---------------------- connection with the issuance of the Debentures (other than qualification or registration of the Debentures or the offer or sale thereof under the securities or Blue Sky laws of the various jurisdictions in which the Debentures would be offered, as to which no opinion need be expressed); (5) the Debentures will be, when issued in accordance with the terms of the Indenture, validity issued and outstanding obligations of the Corporation in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles; and (6) the issuance of the Debentures and the performance by the Corporation of its obligations under the Indenture will not be in conflict with or constitute a breach of or a default (with the passage of time or otherwise) under (w) the Articles of Organization or By-Laws of the Corporation in effect at the date of such opinion, (x) the certificate of incorporation or by-laws of any subsidiary of the Corporation (which conflict, breach or default is material to the Corporation and its subsidiaries taken as a whole) in effect at the date of such opinion, (y) any agreement or instrument (which is, individually or in the aggregate, material to the Corporation and its subsidiaries taken as a whole) to which the Corporation or any of its subsidiaries is a party or by which it or any of its subsidiaries is bound, or (z) any statute, law or regulation in effect at the date of such opinion to which the Corporation or any of its subsidiaries or any of their respective properties is subject or any judgment, decree or order, known to such counsel, if any court of governmental agency or authority presently in effect and applicable to the Corporation or any of its subsidiaries (which conflict, breach or default is, in the case of this clause (z), individually or in the aggregate, material to the Corporation and its subsidiaries taken as a whole. Holders of the outstanding shares of Exchangeable Preferred Stock will be entitled to receive $25 principal amount of the Debentures in exchange for each share of Exchangeable Preferred Stock held by them at the time of exchange plus an amount in cash equal to all dividends on the Exchangeable Preferred Stock accrued and unpaid to the date of such exchange. At such time, Continuation Sheet 2II ---------------------- the rights of the holders of Exchangeable Preferred Stock as stockholders of the Corporation shall cease (except the right to receive on the date of exchange an amount equal to the amount of accrued and unpaid dividends on the Exchangeable Preferred Stock to the date of exchange and the Debentures), and the person or persons entitled to receive the Debentures issuable upon such redemption and exchange shall be treated for all purposes as the registered holder or holders of such Debentures. The Debentures will be issued under and shall have the terms and benefits provided in the Indenture. The Corporation will mail to each record holder of the Exchangeable Preferred Stock written notice of its intention to exchange the Exchangeable Preferred Stock not less than 15 nor more than 60 days prior to the exchange date. Such notice shall state; (i) the exchange date; (ii) the place or places where certificates for such shares are be surrendered for exchange for Debentures; and (iii) that dividends on the shares to be exchanged will cease to accrue on such exchange date. Upon surrender in accordance with said notice of the certificates for any shares so exchanged (properly endorsed or assigned for transfer, if the Board of Directors shall so require and the notice shall so state), the Corporation will cause the Debentures to be authenticated and issued in exchange for such shares of Exchangeable Preferred Stock to be mailed to the holder of the shares of Exchangeable Preferred Stock at such Continuation Sheet 2JJ ---------------------- holder's address of record or such other address as the holder shall specify upon such surrender of such certificates. All shares of Exchangeable Preferred Stock which shall at any time have been exchanged shall, after such exchange, be restored to the status of authorized but unissued shares of preferred stock of the Corporation, pursuant to Section 21A of the MBCL, without designation as to series, and may thereafter by reissued, but not as shares of Exchangeable Preferred Stock. If on the exchange date the Corporation shall be in default in the payment of any dividends (including cumulative dividends, if applicable) on the Exchangeable Preferred Stock or on any shares of Senior Dividend Stock or Parity Dividend Stock, or if such exchange shall on such date be prohibited by applicable law, then no shares of the Exchangeable Preferred Stock shall be exchanged. Section 12. OUTSTANDING SHARES. For purposes of this Certificate of Designation, all shares of Exchangeable Preferred Stock shall be deemed outstanding except (i) from the date fixed for redemption pursuant to Section 6 or 7 hereof, all shares of Exchangeable Preferred Stock which have been so called for redemption under Section 6 or have been required to be redeemed by the holder thereof under Section 7, if funds necessary for the redemption for the of such shares are available, and in the case of a redemption under Section 7, have been deposited in trust with The Bank of Boston or a bank having a Continuation Sheet 2KK ---------------------- combined capital and surplus in excess of $50,000,000, as trustee, for the benefit of the holders of such shares to be redeemed for payment of the relevant redemption price; (ii) from the date of exchange determined pursuant to Section 11 hereof, all shares of Exchangeable Preferred Stock so called for exchange for Debentures if any amount equal to all accrued and unpaid dividends on such shares has been set apart for payment and the Debentures are issuable upon surrender of such shares; (iii) from the date of surrender of certificates representing shares of Exchangeable Preferred Stock, all shares of Exchangeable Preferred Stock, converted into Common Stock; and (iv) from the date of registration of transfer, all shares of Exchangeable Preferred Stock held of record by the Corporation or any subsidiary of the Corporation. Section 13. PARTIAL PAYMENTS. If at any time the Corporation does not pay amounts sufficient to redeem all Exchangeable Preferred Stock required to be redeemed by the Corporation at such time pursuant to Section 6 or 7 or hereof, then such funds which are paid shall be applied to redeem such Exchangeable Preferred Stock as the Corporation may designate by lot. Section 14. RIGHT OF ACTION. Notwithstanding any other provision of this Certificate of Designation, if the Corporation shall default in the payment of any amount required to be paid by it in respect of the Exchangeable Preferred Continuation Sheet 2LL ---------------------- Stock, each holder of Exchangeable Preferred Stock, individually, shall have a right to bring an action for payment. IN WITNESS WHEREOF, Biogen, Inc. has caused its corporate seal to be hereunto affixed and this certificate to be signed by James L. Vincent, its President, and attested by Frederic A. Eustis III, its Clerk, this 20th day of June, 1989. BIOGEN, INC. By s/s James L. Vincent ----------------- President Attest: By s/s Frederic A. Eustis, III ----------------------- Clerk THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL JOSEPH CONNOLLY, Secretary ONE ASHBURTON PLACE, BOSTON, MA 02108 FEDERAL IDENTIFICATION NO. 04-3002117 CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING A SERIES OF A CLASS OF STOCK General Laws, Chapter 156B, Section 26 ---- We, Frederic A. Eustis, III Vice President, and Sarah P. Cecil Assistant Clerk of Biogen, Inc. located at 14 Cambridge Center, Cambridge, MA 02142 do hereby certify that at a meeting of the directors of the corporation held on May 8, 1989, the following vote establishing and designating a series of a class of stock and determining the relative rights and preferences thereof was duly adopted: See attached Pages 2A-2G Note: Votes for which the space provided above is not sufficient should be set out on continuation sheets to be numbered 2A, 2B, etc. Continuation sheets must have a lefthand margin 1 inch wide for binding and shall be 8 1/2 x 11". Only one side should be used. CERTIFICATE OF DESIGNATION of SERIES A JUNIOR PARTICIPATING PREFERRED STOCK of BIOGEN, INC. (Pursuant to Section 26 of the Massachusetts Business Corporation Law) ------------------------------ Biogen, Inc., a corporation organized and existing under the Business Corporation Law of The Commonwealth of Massachusetts (hereinafter called the "Corporation"), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation as required by Section 26 of the Business Corporation Law at a meeting duly called and held on May 8, 1989: RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the Board of Directors" or the "Board") in accordance with the provisions of the Articles of Organization, the Board of Directors hereby creates a series of Preferred Stock, $.01 par value (the "Preferred Stock"), of the Corporation and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof (in addition to any provisions set forth in the Articles of Organization of the Corporation which are applicable to the Preferred Stock of all classes and series) as follows: Series A Junior Participating Preferred Stock: Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be designated as "Series A Junior Participating Preferred Stock" (the "Series A Preferred Stock") and the number of shares constituting the Series A Preferred Stock shall be 400,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; PROVIDED, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock. Section 2. Dividends and Distributions. --------------------------- (A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock, $.01 par value (the "Common Stock"), of the Corporation, and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date fixed for the payment thereof. Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein, in any other Certificate of Designation creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. (C) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. -------------------- (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not: (i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; (ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or (iv) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock or any shares of stock ranking on a parity with the Series A Preferred Stock, excerpt in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized by unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Articles of Organization, or in any other Certificate of Designation creating a series of Preferred Stock or any similar stock or as otherwise required by law. Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock, and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. CONSOLIDATION, MERGER, ETC. In case, the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation at any time declares or pays any dividend on the Common Stock payable in shares of Common Stock, or effects a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise then by payment of a dividend in shares of Common Stock) into a greater or less number of shares of Common Stock, then in each such case the number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. NO REDEMPTION. The shares of Series A Preferred Stock shall not be redeemable. Section 9. RANK. The Series A Preferred Stock shall rank junior with respect to the payment of dividends and the distribution of assets to all other series of the Corporation's Preferred Stock. Section 10. AMENDMENT. The Articles of Organization of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class. IN WITNESS WHEREOF, BIOGEN, INC. has caused this certificate to be executed by its President and attested by its Assistant Clerk this 25th day of May, 1989. s/s Frederic A. Eustis, III ----------------------------- Vice President-General Counsel Attest: s/s Sarah P. Cecil ------------------ Assistant Clerk IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 25th day of May in the year 1989. ___________________________________ Vice President ___________________________________ Assistant Clerk THE COMMONWEALTH OF MASSACHUSETTS Certificate of Vote of Directors Establishing A Series of a Class of Stock (General Laws, Chapter 156B, Section 26) I hereby approve the within certificate and, the filing fee in the amount of $100.00 having been paid, said certificate is hereby filed this 25th day of May, 1989 s/s_______________________ Michael Joseph Connolly Secretary of State To be Filled in By Corporation Photo Copy of Certificate to Be Sent To: Anne L. Bruno, Esquire Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 Telephone: (617) 542-6000 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE MICHAEL JOSEPH CONNOLLY, Secretary ONE ASHBURTON PLACE, BOSTON, MA 02108 ARTICLES OF ORGANIZATION (Under G.L. Ch. 156B) ARTICLE I The name of the corporation is: BIOGEN MASSACHUSETTS, INC. ARTICLE II The purpose of the corporation is to engage in the following business activities (See Pages 2(a) - 2(b) attached) Note: If the space provided under any article or item on this form in insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of paper leaving a left hand margin of at least 1 inch. Additions to more than one article may be continued on a single sheet so long each article requiring each such addition is clearly indicated. ARTICLE III The type and classes of stock and the total number of shares and par value, if any, of each type and class of stock which the corporation is authorized to issue is as follows:

- ------------------------------------------------------------------------------- WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ------------------------------------------------------------------------------- TYPE NUMBER OF TYPE NUMBER OF PAR VALUE SHARES SHARES - ------------------------------------------------------------------------------- COMMON: COMMON: 200,000 $.01 PREFERRED: PREFERRED: 100,000 $.01 - -------------------------------------------------------------------------------

ARTICLE IV If more than one type, class or series is authorized, a description of each with, if any, the preferences, voting powers, qualifications, a special or relative rights or privileges as to each type and class thereof and any series now established. (See Pages 4(a) - 4(c) attached) ARTICLE V The restrictions, if any, imposed by the Articles of Organization upon the transfer of shares of stock of any class are as follows: None. ARTICLE VI Other lawful provisions, if any, for the conduct and regulation of business and affairs of the corporation, for its voluntary dissolution, or for limiting, defining, or regulating the powers of the corporation, or its directors or stockholders, or of any class of stockholders: (If there are no provisions state "None"). (See Pages 6(a) - 6(b) attached) Note: The preceding six (6) articles are considered to be permanent and may ONLY be charged by filing appropriate Articles of Amendment. FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 617-864-8900 - TWX 740-320-1478 - ------------------------------------------------------------------------------- BIOGEN June 28, 1988 Office of the Massachusetts Secretary of State Michael J. Connolly, Secretary One Ashburton Place Boston, MA Dear Sir: This is to inform you that the undersigned, Biogen Research Corp., organized under the laws of the Commonwealth of Massachusetts on May 29, 1980, hereby consents to the use of the name "Biogen Massachusetts, Inc." by F. Augusta Crease as incorporator of a new corporation under the laws of the Commonwealth of Massachusetts to be named "Biogen Massachusetts, Inc." Very truly yours, Biogen Research Corp. By: /s/ Frederic A. Eustis, III ----------------------------------- Frederic A. Eustis, III Clerk FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 617-864-8900 - TWX 740-320-1478 - ------------------------------------------------------------------------------- BIOGEN June 28, 1988 Office of the Massachusetts Secretary of State Michael J. Connolly, Secretary One Ashburton Place Boston, MA Dear Sir: This is to inform you that the undersigned, Biogen Medical Products, Inc. organized under the laws of the Commonwealth of Massachusetts on July 29, 1983, hereby consents to the use of the name "Biogen Massachusetts, Inc." by F. Augusta Crease as incorporator of a new corporation under the laws of the Commonwealth of Massachusetts to be named "Biogen Massachusetts, Inc." Very truly yours, Biogen Medical Products, Inc. By: /s/ Frederic A. Eustis, III --------------------------------- Frederic A. Eustis, III Clerk FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 617-864-8900 - TWX 740-320-1478 - ------------------------------------------------------------------------------- BIOGEN June 28, 1988 Office of the Massachusetts Secretary of State Michael J. Connolly, Secretary One Ashburton Place Boston, MA Dear Sir: This is to inform you that the undersigned, Biogen Marketing Corp., previously known as Biogen Inc., organized under the laws of the Commonwealth of Massachusetts on May 28, 1980 and qualified as a Foreign Corporation with the Commonwealth of Massachusetts on February 4, 1983, hereby consents to the use of the name "Biogen Massachusetts, Inc." by F. Augusta Crease as incorporator of a new corporation under the laws of the Commonwealth of Massachusetts to be named "Biogen Massachusetts, Inc." Very truly yours, Biogen Marketing Corp. By: /s/ Frederic A. Eustis, III _________________________________ Frederic A. Eustis, III Secretary In WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 20th day of June, in the year 1989. /s/ James L. Vincent ____________________________________________, President James L. Vincent /s/ Frederic A. Eustis, III _____________________________________________, Clerk Frederic A. Eustis, III THE COMMONWEALTH OF MASSACHUSETTS Certificate of Vote of Directors Establishing A Series of a Class of Stock (General Laws, Chapter 156B, Section 26) I hereby approve the within certificate and, the filing fee in the amount of $100.00 having been paid, said certificate is hereby filed this 20th day of June, 1989 s/s_______________________ MICHAEL JOSEPH CONNOLLY Secretary of State To be Filled in By Corporation Photo Copy of Certificate to Be Sent To: Elisabeth A. Sottile, L.A. Mintz, Levin, et al. One Financial Center Boston, MA 02111 Telephone: 617/542-6000 ARTICLES OF ORGANIZATION (CONTINUED) BIOGEN MASSACHUSETTS, INC. 2. CORPORATE PURPOSES The purposes for which the Corporation is formed are as follows: To engage in or cause to be carried out research, development, manufacturing and marketing in the field of biotechnology and generally in the biological, chemical, pharmaceutical, agricultural, energy, nutritional, mining and other related fields and to engage in related commercial activities; To develop and acquire, manage, exploit, license and alienate patents, processes or formulate, trademarks and copyrights, including all related rights; To purchase or otherwise acquire, invest in, own mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade and deal in and with personal property of every kind, class and description (including, without limitation, goods, wares and merchandise of every kind, class and description), to manufacture goods, wares and merchandise of every kind, class and description, both on its own account and for others; To borrow or lend money, and to make and issue notes, bonds, debentures, obligations and evidences of indebtedness of all kinds, whether or not secured by mortgage, pledge or otherwise, without limit as to amount, and to secure the same by mortgage, pledge, or otherwise, and generally to make and perform agreements and contracts of every kind and description. To purchase, receive, take by grant, lease or otherwise acquire, own, hold, improve, employ, use, mortgage, pledge, assign, transfer or otherwise dispose of and otherwise deal in and with, real property, or any interest therein, wherever situated; To subscribe for, take, acquire, hold, sell exchange and deal in shares, bonds, obligations and securities of any corporation, government, authority or company and to make such other investments as the Corporation may see fit; To establish, participate in, promote, subsidize and assist companies , syndicates, or partnerships of all kinds and to finance and refinance the same; To guarantee to the fullest extent permitted by law the payment of principal, premium (if any), interest, or dividends with respect to bonds, debentures, bills of exchange, notes and other evidences of indebtedness, stock and other securities, and to guarantee the performance of any contract or obligation, entered into by any corporation, partnership, association, trust or any other entity or natural person whether established or domiciled within or outside the Corporation's jurisdiction of incorporation; To operate branches in various foreign countries and generally to engage in or carry on foreign operations; and Generally to engage in or carry on any business permitted by the laws of the Commonwealth of Massachusetts to a corporation organized under the Massachusetts Business Corporation Law or any successor statute. ARTICLES OF ORGANIZATION (CONTINUED) BIOGEN MASSACHUSETTS, INC. 4. DESCRIPTION OF CLASSES OF STOCK Any and all shares of stock issued, and for which the full consideration has been paid or delivered, shall be deemed fully paid stock; and the holder of such shares shall not be liable for any further call or assessment of any other payment thereon. (a) Each holder of Common Stock shall at every meeting of stockholders be entitled to one vote in person or by proxy for each share of Common Stock held by him. The holders of the Common Stock shall be entitled to such dividends as may from time to time be declared by the Board of Directors out of any funds legally available for the declaration of dividends, subject to any provision of these Articles of Organization, as amended from time to time, and subject to the relative rights and preferences of any shares of Preferred Stock authorized and issued hereunder. No share of Common Stock shall entitle its holder to have any preemptive right in or preemptive right to subscribe to any additional shares of Common Stock or any shares of any other class of stock which may at any time be authorized or issued, or any bonds, debentures or other securities convertible into shares of stock of any class of the Corporation, or options or warrants carrying rights to purchase such shares or securities; (b) The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article 4, to provide for the issuance of the shares of Preferred Stock, with or without series, and, by filing a certificate pursuant to the applicable law of the Commonwealth of Massachusetts (the "Certificate of Designation"), to establish from time to time the number of shares to be included in each such series and to fix the designation, preferences, voting powers, qualifications and special or relative rights or privileges of the shares of each such series. In the event that at any time the Board of Directors shall have established and designated one or more series of Preferred Stock consisting of a number of shares less than all of the authorized number of shares of Preferred Stock, the remaining authorized shares of Preferred Stock shall be deemed to be shares of an underdesignated series of Preferred Stock until designated by the Board of Directors as being a part of a series previously established or a new series then being established by the Board of Directors. Notwithstanding the fixing of the number of shares constituting a particular series, the Board of Directors may at any time thereafter authorize the issuance of additional shares of the same series except as set forth in the Certificate of Designation. The authority of the Board of Directors with respect to each series of Preferred Stock shall include, but not be limited to, determination of the following: (i) the number of shares constituting that series and the distinctive designation of that series, and whether additional shares of that series may be issued; (ii) whether any dividends shall be paid on shares of that series, and, if so, the dividend rate on the shares of that series; whether dividends shall be cumulative and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series; (iii) whether shares of that series shall have voting rights in addition to the voting rights provided by law and, if so, the terms of such voting rights; (iv) whether shares of that series shall be convertible into shares of Common Stock or another security and, if so, the terms and conditions of such conversion, including provisions for adjustment of the conversion rate in such events as the Board of Directors shall determine; (v) whether or not the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable and the amount per share payable in cash of redemption, which amount may vary under different conditions and at different redemption dates; and whether that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amount of such sinking fund; (vi) whether, in the event of purchase or redemption of the shares of that series, any shares of that series shall be restored to the status of authorized by unissued shares or shall have such other status as shall be set forth in the Certificate of Designation; (vii) the rights of the shares of that series in the event of the sale, conveyance, exchange or transfer of all or substantially all of the property and assets of the Corporation, or the merger or consolidation of the Corporation into or with any other corporation, or the merger of any other corporation into it, or the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and the relative rights of priority, if any, of shares of that series to payment in any such event; (viii) whether the shares of that series shall carry any preemptive right in or preemptive right to subscribe for any additional shares of Preferred Stock or any shares of any other class of stock which may at any time be authorized or issued, or any bonds, debentures or other securities convertible into share of stock of any class of the Corporation, or options or warrants carrying rights to purchase such shares or securities; and (ix) any other designation, preferences, voting powers, qualifications, and special or relative rights or privileges of the shares of that series. ARTICLES OF ORGANIZATION (CONTINUED) BIOGEN MASSACHUSETTS, INC. 6A. CERTAIN BUSINESS COMBINATIONS (a) Vote Required for Certain Business Combinations. ----------------------------------------------- (1) HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS. In addition to any affirmative vote required by law or these Articles of Organization, and except as otherwise expressly provided in paragraph (b) of this Article 6A: (i) any merger or consolidation of the Corporation or any Subsidiary (an hereinafter defined) with (a) any Interested Stockholder (as hereinafter defined) or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or (ii) any sale, lease, license, exchange, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) equal to or greater than 10% of the combined assets of the Corporation and its Subsidiaries; or (iii) the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value equal to or greater than 10% of the combined assets of the Corporation and its Subsidiaries, except pursuant to an employee benefit plan of the Corporation or any Subsidiary thereof; or (iv) any reclassification of securities of the Corporation (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary which are directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder; or (v) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder shall require the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote in the election of directors (the "Voting Stock"), voting together as a single class (it being understood that for purposes of this Article 6A, each share of the Voting Stock shall have the number of votes granted to it pursuant to Article 4 of these Articles of Organization). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or by any other provisions of these Articles of Organization or any Certificate of Designation (as defined in Article 4 of these Articles of Organization), or in any agreement with any national securities exchange or otherwise. (2) DEFINITION OF "BUSINESS COMBINATION". The term "Business Combination" as used in this Article 6A shall mean any transaction which is referred to in any one or more of clauses (i) through (v) of subparagraph (a). (b) WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of paragraph (a) of this Article 6A shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law and any other provisions of these Articles of Organization, if, in the case of any Business Combination that does not involve any cash or other consideration being received by the stockholders of the Corporation solely in their capacity as stockholders of the Corporation, the condition specified in the following subparagraph (b)(1) is met, or, in the case of any other Business Combination, all of the conditions specified in either of the following subparagraphs (b)(1) or (b)(2) are met: (1) APPROVAL BY DISINTERESTED DIRECTORS. The Business Combination shall have been approved by a majority of the members of the Board of Directors (the "Board") who are Disinterested that this condition shall not be capable of satisfaction unless there is at least on Disinterested Director. (2) PRICE AND PROCEDURAL REQUIREMENTS. All of the following conditions shall have been met: (i) The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by the holders of Common Stock of the Corporation in such Business Combination shall be at least equal to the higher or the following: (A) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder or any of its Affiliates for any shares of Common Stock of the Corporation acquired by it (1) within the two-year period immediately prior to the first public announcement of the proposal of the Business Combination (the "Announcement Date") or (2) in the transaction in which it became an Interested Stockholder, whichever is higher; or (B) the Fair Market Value per share of Common Stock of the Corporation on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (the "Determination Date"), whichever is higher. (ii) The aggregate amount of the cash and the Fair Market, Value as or the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of outstanding Voting Stock other than Common Stock shall be at least equal to the highest of the following (it being intended that the requirements of this subparagraph (b)(2)(ii) shall be required to be met with respect to every class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock); (A) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers fees) paid by the Interested Stockholder or any of its Affiliates for any shares of such class of Voting Stock acquired or beneficially owned by it that were acquired (1) within the two-year period immediately prior to the Announcement Date or (2) in the transaction in which it became an Interested Stockholder, whichever is higher; or (B) (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary liquidation, dissolution or winding up of the Corporation; or (C) the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher. (iii) The price determined in accordance with subparagraphs (i) and (ii) of this subparagraph (b)(2) shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event. (iv) The holders of all outstanding shares of Voting Stock not beneficially owned by the Interested Stockholder immediately prior to the consummation of any Business Combination shall be entitled to receive in such Business Combination cash or the consideration for their shares meting all of the terms and conditions of this paragraph (2) (provided, however, that the failure of any stockholders who are exercising their statutory rights to dissent from such Business Combination and receive payment of the fair value of their shares to exchange their shares in such Business Combination shall not be deemed to have prevented the condition set forth in this subparagraph (2)(iv) from being satisfied). (v) The consideration to be received by holders of any particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration to be received per share by holders of such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by the Interested Stockholder. (vi) After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (A) except as approved by a majority of the Disinterested Director, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding Preferred Stock of the Corporation; (B) there shall have been (I) no reduction in the annual rate of dividends paid on the Common Stock of the Corporation (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors, and (II) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure to increase such annual rate is approved by a majority of the Disinterested Directors; and (C) neither such Interested Stockholder nor any of its Affiliates shall have become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder becoming an Interested Stockholder. (vii) After such Interested Stockholder has become a Interested Stockholder, such Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or the financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise. (viii) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules and regulations thereunder (or any subsequent provisions replacing the Exchange Act or such rules or regulations) shall be mailed to stockholders of the Corporation at least thirty (30) days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to the Exchange Act or subsequent provisions). Such proxy or information statement shall contain, if a majority of the Disinterested Directors so requests, an opinion of a reputable investment banking firm which shall be selected by majority of the Disinterested Directors, furnished with all information such investment banking firm reasonably requests and paid a reasonable fee for its services by the Corporation upon the Corporation's receipt of such opinion, as to the fairness (or lack of fairness) of the terms of the proposed Business Combination from the point of view of the holders of shares of Voting Stock (other than the Interested Stockholder). (c) Certain Definitions. For the purposes of this Article 6A: ------------------- (1) A "person" shall include any individual, group acting in concert, corporation, partnership, association, joint venture, pool, joint stock company, trust, unincorporated organization or similar company, syndicate, or any group formed for the purpose of acquiring, holding or disposing of securities. (2) "Interested Stockholder" shall mean any person (other than the Corporation or any Subsidiary) who or which: (i) is the beneficial owner, directly or indirectly, of more than fifteen percent (15%) of the voting power of the then outstanding Voting Stock; or (ii) is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of more than fifteen percent (15%) of the voting power of the then outstanding Voting Stock; or (iii) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933. (3) A person shall be a "beneficial owner" of any shares of Voting Stock: (i) which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly within the meaning of Rule 13d-3 of the Exchange Act, as in effect on March 31, 1988; or (ii) which such person or any of its Affiliates or Associates has (A) the right to require (whether such right is exercisable immediately or only after the passage of time), pursuant to an agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the beneficial owner of securities tendered pursuant to a tender or exchange offer made by or on behalf of such person or any of such person's Affiliates or Associates until such tendered securities are accepted for purchase; or (B) the right to vote pursuant to any agreement, arrangement, understanding or otherwise; provided, however, that a person shall not be deemed the beneficial owner of any security if the agreement, arrangement or understanding to vote such security (I) arises solely from a revocable proxy or consent solicitation made pursuant to, and in accordance with, the Exchange Act and (II) is not also then reportable on Schedule 13D under the Exchange Act (or a comparable or successor report); or (iii) which are beneficially owned, directly or indirectly within the meaning of Rule 13d-3 under the Exchange Act, as in effect on March 31, 1988, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except to the extent permitted by the provision of subparagraph (c)(3)(ii)(B) above) or disposing of any shares of Voting Stock; provided, however, that in the case of any employee stock ownership or similar plan of the Corporation or of any Subsidiary in which the beneficiaries thereof possess the right to vote any shares of Voting Stock held by such plan, no such plan nor any trustee with respect thereto (nor any Affiliate of such trustee), solely by reason of such capacity of such trustee, shall be deemed, for any purposes hereof, to beneficially own any shares of Voting Stock held under any such plan. (4) For the purposes of determining whether a person is a Interested Stockholder pursuant to subparagraph (c)(2), the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of subparagraph (c)(3), but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. (5) "Affiliate" and "Associate" shall have the meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on March 31, 1988. (6) "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in subparagraph (c)(2), the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation. (7) "Disinterested Director" means any Director of the Corporation who is not an Affiliate or Associate of the Interested Stockholder and was a member of the Board prior to the time that the Interested Stockholder became an Interested Stockholder, and any Director who is thereafter chosen to fill any vacancy on the Board or who is elected and who, in either event, is not an Affiliate or Associate of the Interested Stockholder and in connection with his or her initial assumption of office is recommended for appointed or election by a majority of Disinterested Directors then serving on the Board. (8) "Fair Market Value" means: (i) in the case of stock the highest closing sale price during the 30-day period immediately preceding ad including the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding and including the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or, if no such quotations are available, the fair market value on the date in question of a share of such stock as determined in good faith by a majority of the Disinterested Directors; and (ii) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined in good faith by a majority of the Disinterested Directors. (9) In the event of any Business Combination in which the Corporation survives, the phrase "consideration other than cash to be received" as used in subparagraphs (b)(2)(i) and (ii) of this Article 6A shall include the shares of Common Stock of the Corporation and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares. (10) For the purposes of determining the "Announcement Date," in the event that the first public announcement of the proposal of the Business Combination is made after the close on such date of any securities exchange registered under the Exchange Act on which any shares of the Voting Stock of the Corporation traded, or of the National Association of Securities Dealers, Inc. Automated Quotations System or any other system on which any shares of the Voting Stock of the Corporation are listed, then the Announcement Date shall be deemed to be the next day on which such exchange or quotations system is open. (d) POWERS OF THE BOARD OF DIRECTORS. A majority of the Board shall have the power and duty to determine for the purposes of this Article 6A, on the basis of information known to them after reasonable inquiry, whether a person is an Interested Stockholder, which determination shall be conclusive. Once the Board has made a determination, pursuant to the preceding sentence, that a person is an Interested Stockholder, then a majority of Disinterested Directors shall have the power and duty to determine for the purposes of this Article 6A, on the basis of information known to them after reasonable inquiry, (i) the number of shares of Voting Stock beneficially owned by any person, (ii) whether a person is an Affiliate or Associate of another, (iii) whether the assets which may be the subject of any Business Combination have, or the consideration which may be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value equal to or greater than 10% of the combined assets of the Corporation and its subsidiaries and (iv) whether all of the applicable conditions set forth in subsection (b)(2) shall have been met with respect to any Business Combination, any of which determinations by a majority of the Disinterested Directors shall be conclusive. A majority of the Disinterested Directors shall have the further power to interpret all of the terms and provision of this Article 6A, which interpretation shall be conclusive. (e) NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED STOCKHOLDERS. Nothing contained in this Article 6A shall be construed to relieve any Interested Stockholder of any fiduciary obligation imposed by law. (f) AMENDMENT, REPEAL, ETC. Notwithstanding any other provisions of these Articles of Organization or the By-Laws of the Corporation (and notwithstanding the fact that a lesser percentage or no vote may be specified by law, these Articles of Organization or the By-Laws of the Corporation), and in addition to any affirmative vote of the holders of Preferred Stock or any other class of capital stock of the Corporation or any series of the foregoing then outstanding which is required by law or pursuant to these Articles of Organization, the affirmative vote of the holders of eighty percent (80%) or more of the voting power of the outstanding Voting Stock, voting together as a single class, shall be required to amend or repeal, or adopt any provisions inconsistent with, this Article 6A. 6B. CERTAIN TRANSACTIONS APPROVED BY THE BOARD OF DIRECTORS Except as provided in Article 6A of, or as otherwise provided in, these Articles of Organization, the Corporation may authorize, by a vote of a majority of the shares of each class of stock outstanding and entitled to vote thereon, (a) the sale, lease or exchange of all or substantially all of its property and assets, including its goodwill, upon such terms and conditions as it deems expedient, and (b) the merger or consolidation of the Corporation with or into any other corporation, provided, however, that such sale, lease, exchange, merger or consolidation shall have been approved by a majority of the members of the Board of Directors. 6C. BOARD OF DIRECTORS (a) MANDATE AND NUMBER. The business and affairs of the Corporation shall be managed under the direction of the Board of Directors, the number of which, subject to any right of the elect additional directors under specified circumstances, shall be fixed from time to time by the Board of Directors pursuant to the By-Laws of the Corporation. (b) TERM. Subject to the rights of the holders of any series of Preferred Stock then outstanding, the directors shall be divided into three classes, as nearly equal in number as possible, with the term of office of the first class to expire at the 1989 Annual Meeting of Stockholders or any special meting in lieu thereof, the term of office of the second class to expire at the 1990 Annual Meeting of Stockholders or any special meeting in lieu thereof and the term of office of the third class to expire at the 1991 Annual Meeting of Stockholders or any special meeting in lieu thereof. At each Annual Meeting of Stockholders or special meeting in lieu thereof following such initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding Annual Meeting of Stockholders or special meeting in lieu thereof after their election and until their successors are duly elected and qualified. (c) NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Subject to the rights of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the directors then in office even though less than a quorum, or by a sole remaining director. In the event of any vacancy resulting other than from an increase in the authorized number of directors, the director elected as provided in the foregoing sentence shall serve for the remainder of the full term of the class in which the vacancy occurred rather than until the next Annual Meeting of Stockholders. In the event of any increase or decrease in the authorized number of directors, (i) each director then serving as such shall nevertheless continue as director of the class of which he is a member until the expiration of his current term or his prior death, retirement or resignation and (ii) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board of Directors among the three classes of directors so as to ensure that no one class has more than one director more than any other class. To the extent one director more than any other class. To the extent possible, consistent with the foregoing rule, any newly created directorships shall be subtracted from those classes whose terms of office terms of office are to expire at the latest dates following such allocation and any newly eliminated directorships shall be subtracted from those classes whose terms of office are to expire at the earliest dates following such allocation, unless otherwise provided for from time to time by resolution adopted by a majority of the directors then in office, although less than a quorum. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board of Directors until the vacancy is filled. (d) REMOVAL. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director, or the entire Board of Directors, may be removed from office at any time (i) only for cause and (ii) only by the affirmative vote of the holders of at least 80% of the voting power of all of the then outstanding shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class, or by the affirmative vote of three-fourths of the directors then serving. A director may be removed for cause only after a reasonable notice and opportunity to be heard before the body proposing to remove him. (e) AMENDMENT, REPEAL, ETC. Notwithstanding anything contained in these Articles of Organization to the contrary, the affirmative vote of the holders of at least 80% of the total voting power of all of the outstanding shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or repeal this Article entitled "Board of Directors" or adopt any provision in these Articles of Organization of the By-Laws inconsistent with this Article entitled "Board of Directors." 6D. INDEMNIFICATION (a) RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, including, without limitation, any corporation or other entity of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation (a "Subsidiary") or any Affiliate of the Corporation as such term is defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director or officer, or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Massachusetts Business Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties, costs of investigation and preparation of defense and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however that, except as provided in Section (c) hereof with respect to proceedings to enforce rights of indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. (b) ADVANCE OF EXPENSES. The right to indemnification conferred in Section (a) of this Article 6D shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to the indemnified for such expenses under this Section or otherwise. The rights to indemnification and to the advancement of expenses conferred in Sections (a) and (b) of this Article shall be contract rights ad such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee's heirs, executors and administrators. (c) RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section (a) or (b) of this Article is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Massachusetts Business Corporation Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Massachusetts Business Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article or otherwise shall be on the Corporation. (d) RIGHTS NOT EXCLUSIVE. The rights to indemnification and to the advancement of expenses conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, these Articles of Organization, the Corporation's By-Laws, or any agreement, vote of stockholders or disinterested directors or otherwise. (e) INSURANCE. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise, including, without limitation, any Subsidiary or Affiliate or any employee benefit plan, against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Massachusetts Business Corporation Law. The Corporation's obligation to provide indemnification under this Article shall be offset to the extent of any payment received by the indemnitee from any other source of indemnification or pursuant to any otherwise applicable insurance coverage under a policy maintained by the Corporation or any other person. (f) EMPLOYEES AND AGENTS. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation or any Subsidiary or Affiliate to the fullest extent of the provisions of this Article with respect to the indemnification of and advancement of expenses to directors and officers of the Corporation. (g) AGREEMENTS. The Corporation may, to the extent authorized from time to time by the Board of Directors, enter into agreements with any director, officer, employee or agent of the Corporation or any Subsidiary or Affiliate to the fullest extent of the provisions of this Article with respect to the indemnification of and advancement of expenses to such person. (h) AMENDMENT. Without the consent of a person entitled to the indemnification and other rights provided in this Article (unless otherwise required by the Massachusetts Business Corporation Law), no amendment modifying or terminating such rights shall adversely affect such person's rights under this Article with respect to the period prior to such amendment. (i) SAVINGS CLAUSE. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each indemnitee as to any liabilities and expenses with respect to any proceeding to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law. 6E. LIMITATION OF LIABILITY OF DIRECTORS No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director notwithstanding any provision of law imposing such liability; provided, however, that this Article shall not eliminate or limit any liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Sections 61 or 62 of the Massachusetts Business Corporation Law, or (iv) with respect to any transaction from which the director derived an improper personal benefit. The provisions of this Article shall not eliminate or limit the liability of a director of this Corporation for any act or omission occurring prior to the date on which this Article became effective. No amendment or repeal of this Article shall adversely affect the rights and protection afforded to a director of this Corporation under this Article for acts or omissions occurring while this Article is in effect. Is the Massachusetts Business Corporation Law is subsequently amended to further eliminate or limit personal liability of directors or to authorize corporate action to further eliminate or limit such liability, then the liability of the directors of this Corporation shall, without any further action of the Board of Directors or the stockholders of this Corporation, be eliminated or limited to the fullest extent permitted by the Massachusetts Business Corporation Law as so amended. 6F. INTERCOMPANY DEALINGS The Corporation may enter into contracts or transact business with one or more of its directors, officers or stockholders or with any corporation, organization or other concern in which one or more of its directors, officers or stockholders are directors, officers, stockholders or are otherwise interested and may enter into other contracts or transactions in which one or more of its directors, officers or stockholders are in any way interested. In the absence of fraud, no such contract or transaction shall be invalidated or in any way affected by the fact that such one or more of the directors, officers or stockholders of the Corporation have or may have any interest which is or might be adverse to the interest of the Corporation even though the vote or action of directors, officers or stockholders having such adverse interest may have been necessary to obligate the Corporation under such contract or transaction. At any meeting of the Board of Directors of the Corporation (or of any duly authorized committee thereof) at which any such contract or transaction shall be authorized or ratified, any such director or directors may vote or act thereat with like force and effect as if he had not such interest, provided in such case that the nature of such interest (though not necessarily the extent or details thereof) shall be disclosed or shall have been known to the directors. A general notice that a director or officer is interested in any corporation or other concern of any kind referred to above shall be a sufficient disclosure as to the interest of such director or officer with respect to all contracts and transactions with such corporation or other concern. No director shall be disqualified from holding office as a director or an officer of the Corporation by reason of any such adverse interest, unless the Board of Directors shall determine that such adverse interest is detrimental to the Corporation. In the absence of fraud no director, officer or stockholder having such adverse interest shall be liable on account of such adverse interest to the Corporation or to any stockholder or creditor thereof or to any other person for any loss incurred by it under or by reason of such contract or transaction, nor shall any such director, officer or stockholder be accountable on such ground for any gains or profits realized thereon. 6G. MAKING, AMENDING AND REPEALING BY-LAWS The directors of the Corporation shall have power to make, alter, amend and repeal the By-Laws of the Corporation in whole or in part except with respect to any provision thereof which requires action by the stockholders, who shall also have power to make, alter, amend and repeal the By-Laws of the Corporation. Any By-Laws made by the directors under the powers conferred hereby may be altered, amended, or repealed by the directors or the stockholders. Notwithstanding the foregoing and anything contained in these Articles of Organization to the contrary, Articles II and VII and Sections 2 and 3 of Article I of the By-Laws, and this Article 6G, shall not be altered, amended or repealed, and no provision inconsistent therewith or herewith shall be adopted, without the affirmative vote of the holders of at least eighty percent (80%) of the voting power of all shares of the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class. 6H. PLACE OF MEETINGS OF STOCKHOLDERS Meetings of stockholders of the Corporation may be held anywhere in the United States to the extent permitted by the By-Laws. 6I. PARTNERSHIP IN ANY BUSINESS ENTERPRISE The Corporation may be a partner in any business enterprise which the Corporation would have the power to conduct by itself. ARTICLES OF ORGANIZATION (CONTINUED) BIOGEN MASSACHUSETTS, INC.

NAME Residence Post Office Address - ---- --------- ------------------- Harold W. Buirkle 150 Broad Avenue 150 Broad Avenue Leonia, N.J. 07605 Leonia, N.J. 07605 Stuart F. Feiner 830 Cranford Avenue 830 Cranford Avenue Westfield, N.J. Westfield, N.J. Walter Gilbert 107 Upland Road 107 Upland Road Cambridge, MA Cambridge, MA 02140 02140 Jeremy R. Knowles 44 Coolidge Avenue 44 Coolidge Avenue Cambridge, MA Cambridge, MA 02140 02140 Roger H. Morley L'Horizon L'Horizon Clos Barnier Clos Barnier 06530, Speracedes 06530, Speracedes France France Kenneth Murray 4 Blackford Hill 4 Blackford Hill View View Edinburgh EH9 3HD Edinburgh EH9 3HD Scotland Scotland Phillip A. Sharp 119 Grasmere Street 119 Grasmere Street Newton, MA 02158 Newton, MA 02158 James W. Stevens 332 East 30th 332 East 30th Street Street New York, N.Y. New York, N.Y. 10016 10016 James L. Vincent 7 Audubon Road 7 Audubon Road Weston, MA 02193 Weston, MA 02193

ARTICLE VII The effective date of organization of the corporation shall be the date approved and filed by the Secretary of the Commonwealth. If a later effective date is desired, specify such date which shall not be more than thirty days after the date of filing. The information contained in ARTICLE VIII is NOT a PERMANENT part of the Articles of Organization and may be changed ONLY by filing the appropriate form provided therefor. ARTICLE VIII a. The post office address of the corporation in MASSACHUSETTS is: 14 Cambridge Center, Cambridge, A 02142 b The name, residence and post office address (if different) of the directors and officers of the corporation are as follows:

POST OFFICE NAME RESIDENCE ADDRESS President: James L. Vincent 7 Auburn Road 7 Auburn Road Weston, MA 02193 Weston, MA 02193 Treasurer: Brooks Boveroux 42 Chatham Circle 42 Chatham Circle Wellesley, MA 02181 Wellesley, MA 02181 Clerk: Frederic A. 221 Mt. Auburn St. 221 Mt. Auburn St. Eustis, III Apartment 111 Apartment 111 Cambridge, MA 02138 Cambridge, MA 02138 Directors: (See Page 8(a) attached)

c. The fiscal year (i.e. tax year) of the corporation shall end in the last day of the month of: December d. The name and BUSINESS address of the RESIDENT AGENT of the corporation, if any, is: N/A ARTICLE IX By-laws of the corporation have been duly adopted and the president, treasurer, clerk and directors whose names are set forth above, have been duly elected. IN WITNESS WHEREOF and under the pains and penalties of perjury, I whose signature appear below as incorporator and whose names and business address(es) ARE CLEARLY TYPED OR PRINTED beneath each signature do hereby associate with the intention of forming this corporation under the provisions of General Laws Chapter 156B and do hereby sign these Articles of Organization as incorporated this 29th day of June, 1988. - -------------------------------------------------------------------------------- F. Augusta Crease, Legal Assistant Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 NOTE: If an already-existing corporation is acting as incorporator, type in the exact name of the corporation, the state or other jurisdiction where it was incorporated, the name of the person signing on behalf of said corporation and the title he/she holds or other authority by which such action is taken. THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF ORGANIZATION GENERAL LAWS, CHAPTER 156 B, SECTION 12 I hereby certify that, upon an examination of these articles of organization, duly submitted to me, it appears that the provisions of the General Laws relative to the organization of corporation have been complied with, and I hereby approve said articles; and the filing fee in the amount of $150.00 having been paid, said articles are deemed to have been filed with me this 29th day of June, 1988. Effective date MICHAEL J. CONNOLLY Secretary of State FILING FEE: 1/20 of 1% of the total amount of the authorized capital stock with par value, and one cent a share for all authorized shares without par value, but not less than $150 General Laws, Chapter 156B. Shares of stock with a par value less than one dollar shall be deemed to have par value of one dollar per share. PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT F. Augusta Crease, Legal Assistant Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 Tel: (617) 542-6000 THE COMMONWEALTH OF MASSACHUSETTS FEDERAL ID. MICHAEL JOSEPH CONNOLLY NO. 04-3002117 Secretary of State ONE ASHBURTON PLACE BOSTON, MASS. 02108 FEDERAL ID. NO. 00-0275985 ARTICLES OF MERGER* Pursuant to General Laws, Chapter 156B Section 79 The fee for filing this certificate is prescribed by General Laws, Chapter 156B, Section 114 Make checks payable to the Commonwealth of Massachusetts. Merger of Biogen Inc. Biogen Massachusetts, Inc. the constituent corporations into Biogen Massachusetts, Inc. the surviving* corporation organized under the laws of the Commonwealth of Massachusetts as specified in the agreement referred to in Paragraph 1 below. The undersigned officers of each of the constituent corporations certify under the penalties of perjury as follows: 1. An agreement of merger* has been duly adopted in compliance with the requirements of subsections (b) and (c) of General Laws, Chapter 156B, Section 79, and will be kept as provided by subsection (c) thereof. The surviving* corporation will furnish a copy of said agreement to any of its stockholders, or to any person who was a stockholder of any constituent corporation, upon written requires and without charge. 2. The effective date of the merger* determined pursuant to the agreement referred to in paragraph 1 shall be September 30, 1988 at 12:00 o'clock midnight. 3. (For a merger) ** The following amendments to the articles of organization of the SURVIVING corporation to be effected pursuant to the agreement of merger referred to in paragraph 1 are as follows: That upon the effective date and time of the merger, Article 1 shall be amended to provide that the name of the Corporation be changed to Biogen, Inc., and Article 3 shall be amended to provide that the Corporation is authorized to issue 55,000,000 shares of common stock having a par value of $.01 per share and 20,000,000 shares of preferred stock having a par value of $.01 per share. (For a consolidation) (a) The purposes of the RESULTING corporation are as follows: *Delete the in applicable words. **If there are no provisions state "NONE". NOTE: If the space provided under article 3 is insufficient, additions shall be set forth on separate 8 1/2 x 11 inch sheets of paper, leaving a left hand margin of at least 1 inch for binding. Additions to more than one article may be continued on a single sheet so long as each article requiring each such addition is clearly indicated. (b) The total number of shares and the par value, if any, of each class of stock which the resulting corporation is authorized is as follows: N/A - -------------------------------------------------------------------------------

WITHOUT PAR VALUE WITH PAR VALUE - ------------------------------------------------------------------------------- CLASS OF PAR STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE AMOUNT - ------------------------------------------------------------------------------- Preferred $ - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Common - ------------------------------------------------------------------------------- **(c) If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established. N/A **(d) Other lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for its voluntary dissolution, for restrictions upon the transfer of shares of stock of any class, or for limiting, defining, or regulating the powers of the corporation, or if its directors or stockholders, or of any class of stockholders: N/A

4. (This paragraph 4 may be deleted if the surviving* corporation is organized under the laws of the state other than Massachusetts.) The following information shall not for any purpose be treated as a permanent part of the articles of organization of the surviving* corporation. (a) The post office address of the principal office of the surviving* corporation in Massachusetts is: 14 Cambridge Center, Cambridge, Massachusetts 02142 (b) The name, resident and post office address of each of the directors and President, Treasurer and Clerk of the surviving* corporation is as follows: *Delete the inapplicable words. **If there are no provisions state "NONE." NOTE: If the space provided under article 3 is insufficient, additions shall be set forth on separate 8-1/2 x 11 inch sheets of paper, leaving a left hand margin of at least 1 inch for binding. Additions to more than one article may be continued on a single sheet so long as each article requiring each such addition is clearly indicated. - -------------------------------------------------------------------------------

NAME RESIDENCE POST OFFICE ADDRESS - -------------------------------------------------------------------------------- President James L. Vincent 7 Audubon Road 7 Audubon Road Weston, MA 02193 Weston, MA 02193 - -------------------------------------------------------------------------------- Treasurer Brooks Boveroux 42 Chatham Circle 42 Chatham Circle Wellesley, MA Wellesley, MA 02181 02181 - -------------------------------------------------------------------------------- Clerk Frederic A. 221 Mt. Auburn 221 Mt. Auburn Eustis, III Street Street Apartment 111 Apartment 111 Cambridge, MA 02138 Cambridge, MA 02138 - -------------------------------------------------------------------------------- Director Harold W. Buirkle 150 Broad Avenue 150 Broad Avenue Leonia, NJ 07605 Leonia, NJ 07605 - -------------------------------------------------------------------------------- Director Stuart F. Feiner 830 Cranford Avenue 830 Cranford Avenue Westfield, NJ Westfield, NJ - -------------------------------------------------------------------------------- Director Walter Gilbert 107 Upland Road 107 Upland Road Cambridge, MA Cambridge, MA 02140 02140 - -------------------------------------------------------------------------------- Director Jeremy R. Knowles 44 Coolidge Avenue 44 Coolidge Avenue Cambridge, MA Cambridge, MA 02140 02140 - -------------------------------------------------------------------------------- Director Roger H. Morley L'Horizon L'Horizon Clos Barnier Clos Barnier 06530, Speracedes, 06530, Speracedes, France France - -------------------------------------------------------------------------------- Director Kenneth Murray 4 Blackford Hill 4 Blackford Hill View View Edinburgh EH9 3HD Edinburgh EH9 3HD Scotland Scotland - -------------------------------------------------------------------------------- Director Phillip A. Sharp 119 Grasmere Street 119 Grasmere Street Newton, MA 02158 Newton, MA 02158 - -------------------------------------------------------------------------------- Director James W. Stevens 332 East 30th 332 East 30th Street Street New York, NY 10016 New York, NY 10016 - -------------------------------------------------------------------------------- Director James L. Vincent 7 Audubon Road 7 Audubon Road Weston, MA 02193 Weston, MA 02193 - -------------------------------------------------------------------------------- (c) The date adopted on which the fiscal year of the surviving* corporation ends is: December 31. (d) The date fixed in the by-laws for the Annual Meeting of stockholders of the surviving* corporation: On a date to be determined by the Board of Directors within six months after the end of each fiscal year, on any day that is not a Saturday, Sunday or legal holiday.

5. (This paragraph 5 may be deleted if the surviving* corporation is organized under the laws of Massachusetts) N/A The resulting* surviving* corporation hereby agrees that it may be sued in the Commonwealth of Massachusetts for any prior obligation of any constituent foreign corporation qualified under General Laws, Chapter 181, and any obligations hereafter incurred by the resulting* surviving* corporation, including the obligation created by General Laws, Chapter 156B, Section 85, so long as any liability remains outstanding against the corporation in the Commonwealth of Massachusetts, and it hereby irrevocably appoints the Secretary of the Commonwealth as its agent to accept service of process in any action for the enforcement of any such obligation, including taxes, in the same manner as provided in Chapter 181. *Delete the inapplicable words. FOR MASSACHUSETTS CORPORATIONS The undersigned President* and Clerk** of Biogen Massachusetts, Inc., a corporation organized under the laws of Massachusetts further state under the penalties of perjury that the agreement of merger* referred to in paragraph 1 has been duly executed on behalf of such corporation and duly approved in the manner required by General Laws, Chapter 156B, Sections 79. s/s James L. Vincent , President* ----------------------------- James L. Vincent s/s Frederic A. Eustis, III , Clerk ---------------------------- Frederic A. Eustis, III *Delete the inapplicable words. FOR CORPORATIONS ORGANIZED OTHER THAN IN MASSACHUSETTS The undersigned President* and Secretary** of Biogen, Inc., a corporation organized under the laws of Delaware further state under the penalties of perjury that the agreement of merger* referred to in paragraph 1 has been duly adopted by such corporation in the manner required by the laws of Delaware. s/s James L. Vincent , President* ----------------------------- James L. Vincent s/s Frederic A. Eustis, III , Clerk* ----------------------------- Frederic A. Eustis, III *Delete the inapplicable words. *Specify the officer having powers and duties corresponding to those of the President or Vice President of a Massachusetts corporation organized under General Laws, Chapter 156B. **Specify the officer having power and duties corresponding to the Clerk or Assistant Clerk of such a Massachusetts corporation. 282280 001904 THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF MERGER* (General Laws, Chapter 156B, Section 79) I hereby approve the within articles of merger* and, the filing fee in the amount of $37,350.00 having been paid, said articles are deemed to have been filed with me this 28th day of September, 1988. Effective Date: September 30, 1988 - ----------------------------------- s/s MICHAEL JOSEPH CONNOLLY ------------------------ MICHAEL JOSEPH CONNOLLY Secretary of State TO BE FILLED IN BY CORPORATION Photocopy of Articles of Merger To Be Sent TO: SEAL F. Augusta Crease, Legal Assistant Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 Telephone: (617) 542-6000 *Delete the inapplicable words. CD 78 5m-10/85 081-$200.00 FEDERAL IDENTIFICATION THE COMMONWEALTH OF MASSACHUSETTS NO. 04-2712513 MICHAEL JOSEPH CONNOLLY Secretary of State ONE ASHBURTON PLACE BOSTON, MASS. 02108 FEDERAL ID. NO. 04-3002117 Biogen Inc. ARTICLES OF MERGER* Pursuant to General Laws, Chapter 156B Section 78 The fee for filing this certificate is prescribed by General Laws, Chapter 156B, Section 114 Make checks payable to the Commonwealth of Massachusetts. Merger* of BIOGEN RESEARCH CORP. BIOGEN, INC. the constituent corporations into BIOGEN, INC., the surviving* corporation. The undersigned officers of each of the constituent corporations certify under the penalties of perjury as follows: 1. An agreement of merger* has been duly adopted in compliance with the requirements of subsections (b) and (c) of General Laws, Chapter 156B, Section 78, and will be kept as provided by subsection (d) thereof. The surviving* corporation will furnish a copy of said agreement to any of its stockholders, or to any person who was a stockholder of any constituent corporation, upon written request and without charge. *Delete the inapplicable words. 2. The effective date of the merger* determined pursuant to the agreement referred to in paragraph 1 shall be December 31, 1988. 3. (For a merger) ** The following amendments to the articles of organization of the SURVIVING corporation to be effected pursuant to the agreement of merger referred to in paragraph 1 are as follows: None (For a consolidation) N/A (a) The purposes of the RESULTING corporation are as follows: (b) The total number of shares and the par value, if any, of each class of stock which the resulting corporation is authorized is as follows: - --------------------------------------------------------------------------------

WITHOUT PAR VALUE WITH PAR VALUE - -------------------------------------------------------------------------------- CLASS OF PAR STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE AMOUNT - ------------------------------------------------------------------------------- Preferred $ - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Common - ------------------------------------------------------------------------------- *Delete the inapplicable words. **If there are no provisions state "NONE". NOTE: If the space provided under article 3 is insufficient, additions shall be set forth on separate 8 1/2 x 11 inch sheets of paper, leaving a left hand margin of at least 1 inch for binding. Additions to more than one article may be continued on a single sheet so long as each article requiring each such addition is clearly indicated.

**(c) If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established. **(d) Other lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for its voluntary dissolution, for restrictions upon the transfer of shares of stock of any class, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders: 4. The following information shall not for any purpose be treated as a permanent part of the articles of organization of the surviving* corporation. (a) The post office address of the principal office of the surviving* corporation in Massachusetts is: 14 Cambridge Center, Cambridge, Massachusetts 02142 (b) The name, resident and post office address of each of the directors and President, Treasurer and Clerk of the surviving* corporation is as follows: *Delete the inapplicable words. **If there are no provisions state "NONE." NOTE: If the space provided under article 3 is insufficient, additions shall be set forth on separate 8-1/2 x 11 inch sheets of paper, leaving a left hand margin of at least 1 inch for binding. Additions to more than one article may be continued on a single sheet so long as each article requiring each such addition is clearly indicated. ================================================================================ NAME RESIDENCE POST OFFICE ADDRESS - -------------------------------------------------------------------------------- President James L. Vincent 7 Audubon Road 7 Audubon Road Weston, MA 02193 Weston, MA 02193 - -------------------------------------------------------------------------------- Treasurer John W. Catterall 70 South Terrace 70 South Terrace Short Hill, NJ 07078 Short Hill, NJ 07078 - -------------------------------------------------------------------------------- Clerk Frederic A. Eustis, III 221 Mt. Auburn Street 221 Mt. Auburn Street Cambridge, MA 02138 Cambridge, MA 02138 - -------------------------------------------------------------------------------- Director BUIRKLE, Harold W. Mr. THE HENLEY GROUP 150 Broad Avenue 375 Park Avenue Leonia, NJ 07605 New York, NY 10152 - -------------------------------------------------------------------------------- Director FEINER, Stuart F. Mr. President 830 Cranford Avenue INCO Venture Capital Westfield, NJ Mgmnt. One New York Plaza New York, NY 10004 - -------------------------------------------------------------------------------- Director GILBERT, Walter Biological DELIVER PACKAGES Prof. Laboratories TO HOME ADDRESS HARVARD UNIVERSITY 107 Upland Road 16 Divinity Avenue Cambridge, MA 02138 Cambridge, MA 02138 - -------------------------------------------------------------------------------- Director KNOWLES, Jeremy R. Department of 44 Coolidge Avenue Prof. Chemistry Cambridge, MA 02138 Hallinckrodt Hall, Room 202 HARVARD UNIVERSITY 12 Oxford Street Cambridge, MA 02138 - -------------------------------------------------------------------------------- Director MORLEY, Roger H. Mr. Vice President, L'Horizon Schiller Clos Barnier International 06530, Speracedes, University FRANCE - -------------------------------------------------------------------------------- Director MURRAY, Kenneth Prof. Dept. of Molecular 4 Blackford Hill View Biology Edinburgh EH9 3HD UNIVERSITY OF Scotland EDINBURGH King's Buildings Mayfield Road Edinburgh EE9 3JR SCOTLAND - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Director SHARP, Phillip A. Prof. Center for Cancer 119 Grasmere Street Research Newton, MA 02158 MIT 40 Ames Street, E17- 529B Cambridge, MA 02139 - -------------------------------------------------------------------------------- Director STEVENS, James V. Mr. Executive Vice 332 East 30th Street President New York, NY 10016 PRUDENTIAL INVESTMENT CORP. 4 Gateway Center Newark, NJ 07102-4007 - -------------------------------------------------------------------------------- Director VINCENT, James L. Mr. Chairman 7 Audubon Road Chief Operating Weston, MA 02193 Officer BIOGEN INC. 14 Cambridge Center Cambridge, MA 02142 ================================================================================ (c) The date adopted on which the fiscal year of the surviving* corporation ends is: December 31. (d) The date fixed in the by-laws for the Annual Meeting of stockholders of the surviving* corporation is: as determined by the Board of Directors. The undersigned officers of the several constituent corporations listed above further state under the penalties of perjury as to their respective corporations that the agreement of merger* referred to in paragraph 1 has been duly executed on behalf of such corporation and duly approved by the stockholders of such corporation in the manner required by General Laws, Chapter 156B, Section 78. s/s , Vice President* ----------------------------- Brooks Boveroux s/s , Clerk* -------------------------------------- Frederick A. Eustis, III of BIOGEN, RESEARCH CORP. (name of constituent corporation) ---------------------- s/s , Vice President* ----------------------------- Brooks Boveroux s/s , Clerk* -------------------------------------- Frederick A. Eustis, III of BIOGEN, INC. (name of constituent corporation) ------------ *Delete the inapplicable words. 288556 002080 Received THE COMMONWEALTH OF MASSACHUSETTS Dec. 16, 1988 ARTICLES OF MERGER* Secretary of State Corporation Division (General Laws, Chapter 156B, Section 78) I hereby approve the within articles of consolidation* merger* and, the filing fee in the amount of $200.00 having been paid, said articles are deemed to have been filed with me this 16th day of December, 1988. Effective Date: December 31, 1988 - ---------------------------------- s/s Michael Joseph Connolly ---------------------------- MICHAEL JOSEPH CONNOLLY Secretary of State TO BE FILLED IN BY CORPORATION Photocopy of Articles of Merger To Be Sent SEAL TO: Molly Mille Biogen. Inc. 14 Cambridge Center Cambridge, MA 02142 Telephone (617) 864-8900 *Delete the inapplicable words. CD 82 10M-10/80 D630976 FEDERAL IDENTIFICATION NO. 04-3002117 THE COMMONWEALTH OF MASSACHUSETTS WILLIAM FRANCIS GALVIN Secretary of State ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108-1512 ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS PURSUANT TO GENERAL LAWS, CHAPTER 156B, SECTION 72 The fee for filing this certificate is prescribed by General Laws, Chapter 156B, Section 114. Make check payable to the Commonwealth of Massachusetts. * * * * We, Kenneth M. Bate and Daniel A. Cuoco Vice President* and Clerk* of Biogen, Inc. organized under the laws of the Commonwealth of Massachusetts and herein called the parent corporation, do hereby certify as follows: 1. That the subsidiary corporation(s) to be merged into the parent corporations is as follows: State of Date of Name Organization Organization Biogen Medical Products, Inc. Massachusetts 7/29/83 2. That the parent corporation owns at least ninety percent of the outstanding shares of each class of the stock of each subsidiary corporation to be merged into the parent corporation. * Delete the inapplicable words. In case the parent corporation is organized under the laws of a state other than Massachusetts these articles are to be signed by officers having corresponding powers and other duties. 4. That a meeting of the directors of the parent corporation the following vote, pursuant to subsection (a) of General Laws, Chapter 156B, Section 82, was duly adopted: (See Page 4A and Page 4B attached hereto and made a part hereof.) ------- ------- NOTE: Votes for which the space provided above is not sufficient should be set out on continuations sheets to be numbered 2A, 2B, etc. Continuation sheets must have a left-hand margin 1 inch wide for finding. Only one side should be used. PAGE 4A Biogen, Inc. Articles of Merger of Parent and Subsidiary Corporations - -------------------------------------------------------------------------- VOTED: To authorize and direct the merger of Biogen Medical Products, Inc., ------ a Massachusetts corporation and a wholly-owned subsidiary of this corporation (the "terminating corporation"), into this corporation (sometimes referred to as the surviving corporation"), pursuant to Chapter 156B Section 82, of the Massachusetts General Laws. VOTED: That the effective date of the merger shall be the date of filing with - ------ and acceptance by the Secretary of State of the Commonwealth of Massachusetts of "Articles of Merger of Parent and Subsidiary Corporations" relative to the within merger. VOTED: The authorize the President and any Vice President and the Clerk or - ------ any Assistant Clerk of this corporation, by and on behalf of this corporation, to execute and deliver said "Articles of Merger of Parent and Subsidiary Corporations" to the Secretary of State of the Commonwealth of Massachusetts in substantially the form attached hereto and made a part hereof as EXHIBIT A. VOTED: That, pursuant to the provisions of the Business Corporation Law of - ------ the Commonwealth of Massachusetts, the separate existence of the terminating corporation shall cease upon the effective date of the merger and that this corporation shall continue its existence as the surviving corporation. VOTED: That this corporation shall, upon the effective date of the merger, - ------ succeed to and be liable for all of the rights and obligations of the terminating corporation including, without limitation, the terminating corporation's general partnership interest in Biogen Medical Products Limited Partnership. VOTED: That the Articles of Organization, as amended, of this corporation as - ------ in effect upon the date of the merger shall continue to be the Articles of Organization of the surviving corporation until amended or changed in accordance with the applicable provisions of the Business Corporation Law of the Commonwealth of Massachusetts. Page 4B ------- Biogen, Inc. Articles of Merger of Parent and Subsidiary Corporations -------------------------------------------------------- VOTED: That the By-Laws, as amended, of this corporation as in effect upon - ------ the date of the merger shall continue to be the By-Laws of the surviving corporation and shall continue in full force and effect until changed, altered or amended as therein provided and in the manner as prescribed by the Business Corporation Law of the Commonwealth of Massachusetts. VOTED: That the officers and Directors of this corporation holding office on - ------ the date of merger shall continue to be the officers and Directors of the surviving corporation, all of whom shall hold their offices and directorships until the election and qualification of their respective successors or until their tenure is otherwise terminated in accordance with the By-Laws of the surviving corporation. VOTED: That all of the issued and outstanding capital stock of the - ------ terminating corporation shall be surrendered and cancelled as of the effective date of the merger and the issued and outstanding capital stock of the surviving corporation shall not be converted in any manner. VOTED: That the Directors and any and all officers of this corporation are - ------ hereby authorized, empowered and directed to do any and all acts and things and to make, execute, deliver, file and/or record any and all instruments, papers and documents which shall be or become necessary, proper or convenient in order to carry into effect the full intention of the merger provided for herein, including, but not limited to, the "Articles of Merger of Parent and Subsidiary Corporations" described hereinabove. 5. The effective date of the merger as specified in the vote set out under Paragraph 4 is upon filing and acceptance by the office of the Secretary of the Commonwealth of Massachusetts. IN WITNESS WHEREOF and under the penalties of perjury we have hereto signed out names this 9th day of June, 1993. s/s Vice President* -------------------------- Kenneth M. Bate s/s Clerk* ----------------------------------- Daniel A. Cuoco * Delete the inapplicable words. In case the parent corporation is organized under the laws of a state other than Massachusetts these articles are to be signed by officers having corresponding powers and duties. 6381 432481 COMMONWEALTH OF MASSACHUSETTS ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS (General Laws, Chapter 156B, Section 82) I hereby approve the within articles of merger of parent and subsidiary corporation, and the filing fee in the amount of $250.00 having been paid, said articles are deemed to have been filed with me this 9th day of June, 1993. s/s Michael Joseph Connolly Michael Joseph Connolly Secretary of State TO BE FILLED IN BY CORPORATION Photo Copy of Merger To Be Sent SEAL TO: Elisabeth Sottile Lewin, L.A. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 Telephone: (617) 542-6000 FEDERAL IDENTIFICATION NO. 04-3002117 -------------- THE COMMONWEALTH OF MASSACHUSETTS William Francis Galvin Secretary of the Commonwealth One Ashburton Place, Boston, Massachusetts 02108-1512 ARTICLES OF AMENDMENT (General Laws, Chapter 156B, Section 72) We, Michael J. Astrue , *Vice President, ------------------------------------------------------ and Michael J. Astrue , *Clerk ------------------------------------------------------ of Biogen, Inc. , ------------------------------------------------------ (Exact name of corporation) located at 14 Cambridge Center, Cambridge, Massachusetts 02142, (Street address of corporation in Massachusetts) certify that these Articles of Amendment affecting article numbered: Three ------- (Number those articles 1, 2, 3, 4, 5 and/or 6 being amended) of the Articles of Organization were duly adopted at a meeting held on May 31, 1996, -------- -- by vote of: 28,797,384 shares of Common Stock of 35,676,575 shares outstanding, - ---------- ------------ ---------- (type, class & series, if any) shares of of shares outstanding, and - ------------- -------------- ------------- (type, class & series, if any) shares of of shares outstanding. - ------------- -------------- ------------- (type, class & series, if any) l**being at least a majority of each type, class or series outstanding and entitled to vote thereon. *Delete the inapplicable words. **Delete the inapplicable clause. 1 For amendments adopted pursuant to Chapter 156B, Section 70. 2 For amendments adopted pursuant to Chapter 156B, Section 71. Note: If the space provided under any article or item on this form is insufficient, additions shall be set forth on one side only of separate 8 1/2 x 11 sheets of paper with a left margin of at least 1 inch. Additions to more than one article may be made on a single sheet so long as each article requiring each addition is clearly indicated. To change the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is: ================================================================================ WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - -------------------------------------------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - -------------------------------------------------------------------------------- Common: Common: 55,000,000 $.01 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Preferred: Preferred: 20,000,000* $.01 - -------------------------------------------------------------------------------- ================================================================================ *400,000 shares Series A Junior Participating Preferred Stock and 2,760,000 shares $2.125 Convertible Exchangeable Preferred Stock Change the total authorized to: ================================================================================ WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - -------------------------------------------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - -------------------------------------------------------------------------------- Common: Common: 110,000,000 $.01 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Preferred: Preferred: 20,000,000* $.01 - -------------------------------------------------------------------------------- ================================================================================ *400,000 shares Series A Junior Participating Preferred Stock and 2,760,000 shares $2.125 Convertible Exchangeable Preferred Stock The foregoing amendment(s) will become effective when these Articles of Amendment are filed in accordance with General Laws, Chapter 156B, Section 6 unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. Later effective date: N/A . ---------------------------------------------------- SIGNED UNDER THE PENALTIES OF PERJURY, this 5TH day of NOVEMBER, 1996. s/s , *Vice President ---------------------------------- Michael J. Astrue s/s , *Clerk -------------------------------------------- Michael J. Astrue *Delete the inapplicable words. THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 156B, Section 72) ================================================ I hereby approve the within Articles of Amendment and, the filing fee in the amount of $ having been paid, said articles are deemed to have been filed with me this day of , 19 . --- -------------- -- Effective date: ------------------------------------------------ WILLIAM FRANCIS GALVIN Secretary of the Commonwealth TO BE FILLED IN BY CORPORATION Photocopy of document to be sent to: Anne Marie Cook, Esquire Esquire Biogen, Inc. 14 Cambridge Center Cambridge, MA 02142 FEDERAL IDENTIFICATION No. 04-3002117 THE COMMONWEALTH OF MASSACHUSETTS William Francis Galvin Secretary of the Commonwealth One Ashburton Place, Boston, Massachusetts 02108-1512 Certificate of Vote of Directors ESTABLISHING A CLASS OR SERIES OF STOCK (GENERAL LAWS, CHAPTER 156B, SECTION 26) We, Michael Astrue, Vice President and Clerk of Biogen, Inc. located at 4 Cambridge Center, Cambridge, MA 02142 certify that at a meeting of the directors of the corporation on April 16, 1999 the following vote establishing and designating a class or series of stock and determining the relative rights and preferences thereof are duly adopted: See Exhibit A. EXHIBIT A CERTIFICATE OF ELIMINATION of SERIES A JUNIOR PARTICIPATING PREFERRED STOCK of BIOGEN, INC. and CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS of SERIES A-1 JUNIOR PARTICIPATING PREFERRED STOCK of BIOGEN, INC. Biogen, Inc., a corporation organized and existing under the Business Corporation Law of the Commonwealth of Massachusetts (hereinafter called the "Company"), DOES HEREBY CERTIFY THAT: 1. The voting powers, designations, preferences, and the relative, participating, optional, or other rights, and the qualifications, limitations, and restrictions of the Series A Junior Participating Preferred Stock of the Company (the "Old Series A") were provided for in resolutions adopted by the Board of Directors of the Company (the "Board of Directors") dated May 8, 1989. A certificate setting forth such resolutions has been heretofore filed with the Secretary of State of the Commonwealth of Massachusetts pursuant to the provisions of Section 26 of the Business Corporation Law of the Commonwealth of Massachusetts. 2. No shares of the Old Series A have ever been issued. 3. This Certificate is being filed to eliminate the Old Series A and replace it with the Series A-1 Junior Participating Preferred Stock of the Company as set forth below. 4. Pursuant to authority conferred upon the Board of Directors of the Company by the Articles of Organization of the Company, and pursuant to the provisions of Section 26 of the Business Corporation Law, the Board of Directors, at a meeting of its members held on April 16, 1999, adopted votes providing for the elimination of the Old Series A, which votes are as follows: VOTED: That none of the authorized shares of the original Series A Junior Participating Preferred Stock of the Company are outstanding and none of such shares will be issued and that the officers of the Company be, and each hereby is, authorized and 1 directed to file a Certificate of Vote of Directors Establishing a Class or Series of Stock providing for the elimination of such Series A Junior Participating Preferred Stock setting forth the text of this vote with the Secretary of State of the Commonwealth of Massachusetts for the purpose of eliminating from the Articles of Organization of the Company the original Series A Junior Participating Preferred Stock of the Company. VOTED: That the proper officers of the Company be, and each of them hereby is, authorized, in the name and on behalf of the Company, to take all such actions and to execute all such documents as they may deem necessary or appropriate in connection with the elimination of the original Series A Junior Participating Preferred Stock. 5. That, pursuant to authority conferred upon the Board of Directors by the Articles of Organization of this Company, and pursuant to the provisions of Section 26 of the Business Corporation Law, the Board of Directors, at a meeting of its members held on April 16, 1999, adopted a vote providing for the designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of two hundred fifty thousand (250,000) shares of the Company's Preferred Stock, par value one cent ($.01) per share, which vote is as follows: VOTED: That pursuant to the authority granted to and vested in the Board of Directors of the Company in accordance with the provisions of its Articles of Organization, the Board of Directors of the Company hereby creates a new series of Preferred Stock, par value $.01 per share, of the Company and hereby fixes the designation and number of shares, and the relative rights, preferences and limitations thereof (in addition to the provisions set forth in the Articles of Organization of the Company which are applicable to the Preferred Stock of all classes and series), as follows. Series A-1 Junior Participating Preferred Stock. The preferences, privileges and restrictions granted to or imposed on the Company's Series A-1 Junior Participating Preferred Stock, par value $.01 per share, or the holders thereof, are as follows: Section 1. Designation and Amount. The shares of such series shall be designated as "Series A-1 Junior Participating Preferred Stock" (the "Series A-1 Preferred Stock") and the number of shares constituting the Series A-1 Preferred Stock shall be two hundred fifty thousand (250,000). Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A-1 Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company convertible into Series A-1 Preferred Stock. Section 2. Dividends and Distributions. (A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A-1 Preferred Stock 2 with respect to dividends, the holders of shares of Series A-1 Preferred Stock, in preference to the holders of Common Stock, $.01 par value (the "Common Stock"), of the Company, and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A-1 Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 1000 times the aggregate per share amount of all cash dividends, and 1000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A-1 Preferred Stock. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A-1 Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Company shall declare a dividend or distribution on the Series A-1 Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A-1 Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A-1 Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A-1 Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. 3 Dividends paid on the shares of Series A-1 Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A-1 Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of shares of Series A-1 Preferred Stock shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each share of Series A-1 Preferred Stock shall entitle the holder thereof to 1000 votes on all matters submitted to a vote of the stockholders of the Company. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A-1 Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein, in any other Certificate of Designation creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A-1 Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Company having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Company. (C) Except as set forth herein, or as otherwise provided by law, holders of Series A-1 Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A-1 Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A-1 Preferred Stock outstanding shall have been paid in full, the Company shall not: (i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A-1 Preferred Stock; 4 (ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A-1 Preferred Stock, except dividends paid ratably on the Series A-1 Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A-1 Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Company ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A-1 Preferred Stock; or (iv) redeem or purchase or otherwise acquire for consideration any shares of Series A-1 Preferred Stock, or any shares of stock ranking on a parity with the Series A-1 Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series A-1 Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Articles of Organization, or in any other Certificate of Designation creating a series of Preferred Stock or any similar stock or as otherwise required by law. Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A-1 Preferred Stock unless, prior thereto, the holders of shares of Series A-1 Preferred Stock shall have received $1000 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A-1 Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate amount to be distributed per share to holders of shares of Common 5 Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A-1 Preferred Stock, except distributions made ratably on the Series A-1 Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A-1 Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A-1 Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Company at any time declares or pays any dividend on the Common Stock payable in shares of Common Stock, or effects a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A-1 Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. No Redemption. The shares of Series A-1 Preferred Stock shall not be redeemable. Section 9. Rank. The Series A-1 Preferred Stock shall rank junior with respect to the payment of dividends and the distribution of assets to all other series of the Company's Preferred Stock. Section 10. Amendment. The Articles of Organization of the Company shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A-1 Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A-1 Preferred Stock, voting together as a single class. 6 IN WITNESS WHEREOF, Biogen, Inc. has caused this certificate to be executed by Vice President and General Counsel this 30th day of April, 1999. /s/ Michael J. Astrue __________________________ Vice President and General Counsel 7 FEDERAL IDENTIFICATION No. 04-3002117 THE COMMONWEALTH OF MASSACHUSETTS William Francis Galvin Secretary of the Commonwealth One Ashburton Place, Boston, Massachusetts 02108-1512 ARTICLES OF AMENDMENT (GENERAL LAWS, CHAPTER 156B, SECTION 72) We, Michael Astrue, Vice President and Clerk of Biogen, Inc. located at 14 Cambridge Center, Cambridge, MA 02142 certify that these Articles of Amendment affecting articles numbered: 3 of the Articles of Organization were duly adopted at a meeting held on June 11, 1999, by vote of: 62,563,266 shares of Common of 75,263,543 shares outstanding, being at least a majority of each type, class or series outstanding and entitled to vote thereon. To change the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is:

- ------------------------------------------------------------------------------------------------------------ WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ------------------------------------------------------------------------------------------------------------ TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - ------------------ -------------------------- -------------- --------------------------- -------------------- Common: Common: 110,000,000 $.01 - ------------------ -------------------------- -------------- --------------------------- -------------------- - ------------------ -------------------------- -------------- --------------------------- -------------------- Preferred: Preferred - ------------------ -------------------------- -------------- --------------------------- -------------------- - -------------------------------------------------------------------------------------------------------------

Change the total authorized to:

- --------------------------------------------- --------------------------------------------------------------- WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ------------------ -------------------------- -------------- --------------------------- -------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - ------------------ -------------------------- -------------- --------------------------- -------------------- Common: Common: 375,000,000 $.01 - ------------------ -------------------------- -------------- --------------------------- -------------------- - ------------------ -------------------------- -------------- --------------------------- -------------------- Preferred: Preferred - -------------------------------------------------------------------------------------------------------------

FEDERAL IDENTIFICATION NO. 04-3002117 ------------------- THE COMMONWEALTH OF MASSACHUSETTS - -------------- EXAMINER WILLIAM FRANCIS GALVIN Secretary of the Commonwealth One Ashburton Place, Boston, Massachusetts 02108-1512 CERTIFICATE OF CORRECTION (GENERAL LAWS, CHAPTER 156B, SECTION 6A) 1. Exact name of corporation: Biogen, Inc. 2. Document to be corrected: Articles of Amendment 3. The above mentioned document was filed with the Secretary of the Commonwealth on June 11, 1999. ----------------, ----- 4. Please state the inaccuracy or defect in said document: The number of the authorized Preferred Stock was inadvertently omitted from both the "Presently Authorized" and "Change" Sections on page two - authorized stock. 5. Please state corrected version of the document: See attached Sheet NOTE: THIS CORRECTION SHOULD BE SIGNED BY THE PERSON(S) REQUIRED BY LAW TO SIGN THE ORIGINAL DOCUMENT. SIGNED UNDER THE PENALTIES OF PERJURY, this 28th day of January, ------- ---------- 2003, ----- /s/ Thomas J. Bucknum *Vice President --------------------------------------------------, /s/ Anne Marie Cook *Assistant Clerk ---------------------------------------, * DELETE THE INAPPLICABLE WORDS. NOTE: IF THE INACCURACY OR DEFECT TO BE CORRECTED IS NOT APPARENT ON THE FACE OF THE DOCUMENT, MINUTES OF THE MEETING SUBSTANTIATING THE ERROR MUST BE FILED WITH THE CERTIFICATE. ADDITIONAL INFORMATION MAY BE PROVIDED ON SEPARATE 8 1/2 X 11 SHEETS OF WHITE PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH. To change the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is: _______________________________________________________________________________ WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS ________________________________________________________________________________ TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE ________________________________________________________________________________ Common: Common: 110,000,000 $.01 ________________________________________________________________________________ ________________________________________________________________________________ Preferred: Preferred: 20,000,000* $.01 ________________________________________________________________________________ ________________________________________________________________________________ Change the total authorized to: _______________________________________________________________________________ WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS ________________________________________________________________________________ TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE ________________________________________________________________________________ Common: Common: 375,000,000 $.01 ________________________________________________________________________________ ________________________________________________________________________________ Preferred: Preferred: 20,000,000* $.01 ________________________________________________________________________________ ________________________________________________________________________________ *of which 250,000 Shares are designated Series A-1 Junior Participating Preferred Stock and 2,760,000 Shares are designated $2.125 Convertible Exchangeable Preferred Stock. EX-10.20 4 b45838biexv10w20.txt EX-10.20 1982 INCENTIVE STOCK OPTION PLAN EXHIBIT 10.20 BIOGEN, INC. 1982 INCENTIVE STOCK OPTION PLAN (AS AMENDED THROUGH DECEMBER 13, 2002, EFFECTIVE DECEMBER 31, 2002) I. DEFINITIONS AND PURPOSE A. Definitions: References in this document to the "Company" are to Biogen, Inc., a Massachusetts corporation; reference to the "Plan" are to the Biogen, Inc. 1982 Incentive Stock Option Plan; references to the "Code" are to the United States Internal Revenue Code of 1986, as amended. Unless otherwise specified or unless the context otherwise requires, the following terms, as used in the Plan, have the following meanings: 1. "Affiliate" means a corporation which, for purposes of Section 422 of the Code, is a parent or subsidiary of the Company, direct or indirect. 2. "Disability" means permanent and total disability as defined in Section 105(d)(4) of the Code. 3. "Key Employee" means an employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer of the Company or of an Affiliate), designated by the Committee to be eligible to be granted one or more Options under the Plan. 4. "Option" means a right or option granted under the Plan. 5. "Participant" means a Key Employee to whom one or more Options are granted under the Plan. As used herein, "Participant" shall include "Participant's Survivors" where the context requires. 6. "Participant's Survivors" means a deceased Participant's legal representatives and/or any person or persons who acquired the Participant's rights to an Option by will or by the laws of descent and distribution. 7. "Shares" mean those shares of the Common Stock, $.01 par value, of the Company as to which Options have been or may be granted under the Plan. B. Purposes Of The Plan: The Plan is intended to encourage ownership of the Shares of the Company by Key Employees in order to attract such Key Employees, to induce such Key Employees to remain in the employ of the Company or of an Affiliate and to provide additional incentive for such Key Employees to promote the success of the Company or its Affiliates. It is further intended that Options issued pursuant to the Plan shall be eligible to constitute "incentive stock options" within the meaning of Section 422 of the Code. 1 II. SHARES SUBJECT TO THE PLAN The aggregate number of Shares as to which Options may be granted from time to time shall be 54,208,000; provided, however that such aggregate number shall be reduced by the number of shares which have been sold under, or may be sold pursuant to options granted from time to time under the Company's 1985 Non-Qualified Stock Option Plan (the "1985 Plan"), to the same extent as if such sales had been made or options granted pursuant to this Plan. If any option granted under this Plan or the 1985 Plan ceases to be "outstanding", in whole or in part, other than by reason of the exercise of such option, the shares which were subject to such option shall be available for the granting of other Options. Any option shall be treated as "outstanding" until such option is exercised in full, terminates under the provisions of this Plan or the 1985 Plan, as the case may be, or expires by reason of lapse of time. The aggregate number of Shares as to which Options may be granted shall be subject to change only by means of an amendment of the Plan duly adopted by the Company and approved by the Shareholders of the Company within one year before or after the date of the adoption of any such amendment, subject to the provisions of Article VII. III. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Stock and Option Plan Administration Committee of the Company (the "Committee"). The membership of the Committee shall be determined and shall be subject to change without cause and without notice from time to time, by the Company. The Committee is authorized to interpret the provisions of the Plan or of any Option and to make all rules and determinations necessary or advisable for the administration of the Plan. It may from time to time determine which employees of the Company or of any Affiliate shall be designated as Key Employees and which of the Key Employees shall be granted Options and, subject to the other provisions of the Plan, the number of Shares for which an Option or Options shall be granted. Subject to the provisions of the Plan, Options may be granted upon such terms and conditions as the Committee may prescribe; provided, however, that such terms and conditions shall be prescribed in the context of preserving, to the extent reasonably possible, the United States tax status of the Options as incentive stock options. This Plan is intended to comply in all respects with Rule 16b-3 or its successors promulgated under the Securities Exchange Act of 1934 ("1934 Act") with respect to participants who are subject to Section 16 of the 1934 Act, and any provision in this Plan with respect to such persons contrary to Rule 16b-3 shall be deemed null and void to the extent permissible by law and deemed appropriate by the Committee. 2 IV. ELIGIBILITY FOR PARTICIPATION Each Participant must be a Key Employee of the Company or of an Affiliate at the time an Option is granted. The Committee may grant to one or more Key Employees one or more Options, and shall designate the number of Shares to be optioned under each Option so granted; provided, however, that no Options shall be granted after June 23, 2005, and provided further, that the fair market value (determined as of the date the Options are granted) of the Shares as to which incentive stock options granted on or after January 1, 1987 by the Company or its Affiliates to any individual employee under the Plan and/or under any other incentive stock option plans are exercisable for the first time in any one calendar year shall not exceed $100,000. Notwithstanding any of the foregoing provisions, the Committee may authorize the grant of an Option to a person not then in the employ of the Company or of an Affiliate, conditioned upon such person becoming eligible to be a Participant at or prior to the execution of the Option agreement evidencing such Option. In no event shall any employee be granted in any calendar year options to purchase or receive more than 2,400,000 shares of the Company's Common Stock pursuant to this Plan. V. TERMS AND CONDITIONS Each Option shall be set forth in writing in an Option agreement, duly executed on behalf of the Company and by the Participant to whom such Option is granted. No Option shall be deemed to have been granted and no purported grant of any Option shall be effective, until such Option shall have been approved by the Committee. The Committee may provide that Options be granted subject to such conditions as the Committee may deem appropriate, including without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. Each such Option agreement shall be subject to at least the following terms and conditions: A. Option Price: If, including for this purpose the Shares which are the subject of Options previously granted and outstanding or proposed to be granted hereunder, the optionee owns 10% or less of the total combined voting power of all classes of share capital of the Company, the Option price (per share) of the Shares covered by each Option granted hereunder shall be not less than the fair market value (per share) of the Shares on the date of the grant of the Option; provided, however, that in no event shall the Option price be less than the par value per share of Common Stock. In all other cases, the Option price shall be not less than 110% of the said fair market value. For purposes hereof, the fair market value shall be the average between the high and low sale prices, as reported in the National Association of Securities Dealers 3 Automated Quotation System ("NASDAQ") for the date of the grant of the Option or, if none, for the most recent trading date thirty (30)days or less prior to the date of the grant of the Option on which the Common Stock was traded. If the fair market value cannot be determined under the preceding sentence, it shall be determined in good faith by the Committee. B. Number of Shares: Each Option shall state the number of Shares to which it pertains. C. Term of Option: Each Option shall terminate at such date as the Committee, at the time it authorizes the grant of the Option, shall determine, and shall be subject to earlier termination as herein provided, except that if the option price is required under Paragraph A of this Article V to be at least 110% fair market value, each such Option shall terminate not more than five (5) years from the date of the grant hereof; and provided that in no case may the term of any Option exceed ten (10) years. D. Date of Exercise: The Committee may prescribe the date or dates on which the Option becomes exercisable, and may provide that the Option rights accrue or become exercisable in installments over a period of months or years, or upon the attainment of stated goals. The Committee may stipulate that any Option which becomes exercisable shall be subject to cancellation or that Shares purchased upon the exercise of such Option shall be subject to repurchase rights in favor of the Company. In such event, the Committee shall determine the date or dates, or event or events, upon which such cancellation or repurchase rights shall become effective or shall lapse, as the case maybe. E. Medium of Payment: The option price shall be payable upon the exercise of the Option. It shall be payable in cash, or, if permitted by the Committee and by Section 422 of the Code, in shares or other consideration. F. Prior Options: By its terms, each Option granted prior to January 1, 1987 under the Plan to a Participant, shall not be exercisable while there is"outstanding" any other incentive stock option (as defined in the predecessor to Section 422 of the Code), which was granted before the grant of such Option, to such Participant to purchase Shares in the Company or in an Affiliate or in a predecessor of the Company or of an Affiliate. G. Termination of Employment: A Participant who ceases (for any reason other than death or disability or termination by the Participant's employer for cause) to be an employee of the Company or of an Affiliate, may exercise any Option granted to such Participant, to the extent that the right to purchase Shares thereunder has accrued on the date of such termination of employment, but only within three (3) months, or such shorter period as may be determined by the Committee, after such date, or, if earlier, within the originally prescribed term of the Option. A Participant's employment shall not be deemed terminated by reason of a transfer to another employer which is the Company or an Affiliate. 4 A Participant whose employment is terminated by the Participant's employer for cause shall forthwith upon such termination cease to have any right to exercise any Option. For purposes of this paragraph, "cause" shall be deemed to include dishonesty with respect to the employer, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, and conduct substantially prejudicial to the business of the Company or any Affiliate. The determination of the Committee as to the existence of cause shall be conclusive on the Participant and Company. A Participant to whom an Option has been granted under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability, or who is on leave of absence for any purpose permitted by any authoritative interpretation of Section 422, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated his employment with the Company or with an Affiliate, except as the Committee may otherwise expressly provide. H. Disability: If a Participant ceases to be an employee of the Company or of an Affiliate by reason of Disability, any Option held by him or her on the date of Disability shall be exercisable as to all or any part of the Shares subject to the Option, all of which shares shall be fully vested as of the date of such Disability. A Disabled Participant may exercise such Option only within a period of one (1) year after the date as of which the Committee determines that he or she became Disabled, or, if earlier, within the originally prescribed term of the Option. I. Death: If a Participant dies while the Participant is an employee of the Company or of an Affiliate, any Option held by him or her at the date of death shall be exercisable as to all or any part of the Shares subject to the Option, all of which shares shall be fully vested as of the date of the Participant's death. A deceased Participant's Survivors may exercise such Option only within a period of one (1) year after the date of death, or, if earlier, within the originally prescribed term of the Option. J. Exercise of Option and Issue of Shares: Options shall be exercised by giving written notice to the Company, addressed to the Company at the address specified in the Option agreement, with which the Participant shall tender the Option price. Such written notice shall be signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised, and shall contain any warranty required by Article VI. The issuance of the Shares may be delayed by the Company if any law or regulation requires the Company to take any action with respect to the shares prior to the issuance thereof. Without limiting the generality of the foregoing, nothing contained herein shall be deemed to require the Company to issue any Shares if prohibited by law or applicable regulation. The Shares shall, upon delivery, be evidenced by an appropriate certificate or certificates in respect of paid-up, non-assessable Shares. 5 K. Rights as a Shareholder: No Participant to whom an Option has been granted shall have rights as a shareholder with respect to any Shares covered by such Option except as to such Shares as have been registered in the Company's share register in the name of such Participant upon the due exercise of the Option. L. Assignability and Transferability of Options: By its terms, an Option granted to a Participant shall not be transferable by the Participant otherwise than by will or by the laws of descent and distribution and shall be exercisable, during the Participant's lifetime, only by such Participant. Such Option shall not be assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment, or similar process. Any attempted transfer, assignment, pledge, hypothecation, or other disposition of any Option or of any rights granted thereunder contrary to the provisions of this Paragraph L, or the levy of any attachment or similar process upon an Option or such rights, shall be null and void. M. Tax Withholding: In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Option holder's salary in connection with the exercise of an Option, the Option holder shall advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Option holder, the amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company's Common Stock, is authorized by the Committee (and permitted by law), provided, however, that with respect to persons subject to Section 16 of the 1934 Act, any such withholding arrangement shall be in compliance with any applicable provisions of Rule 16b-3 promulgated under Section 16 of the 1934 Act. For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner provided in Section V.A. above, as of the most recent practicable date prior to the date of exercise. If the fair market value of the shares withheld is less than the amount of payroll withholdings required, the Option holder may be required to advance the difference in cash to the Company or the Affiliate employer. N. Reload Options: Concurrently with the award of Options under the Plan, the Committee may authorize reload options ("Reload Options") to purchase for cash or shares a number of shares of Common Stock. The number of Reload Options shall equal (i) the number of shares of Common Stock used to exercise the underlying Options and (ii) to the extent authorized by the Committee, the number of shares of Common Stock used to satisfy any tax withholding requirement incident to the exercise of the underlying Options. The grant of a Reload Option will become effective upon the exercise of underlying Options or Reload Options through the use of shares of Common Stock held by the optionee for at least 6 months. Reload Options must be evidenced in Option agreements. The Option price per share of Common Stock deliverable upon the exercise of a Reload Option shall be determined in accordance with Paragraph V.A. hereof on the date the grant of the Reload Option becomes effective. The term of each Reload Option shall be equal to the remaining option term of the underlying Option. No additional Reload Options shall be granted to Option holders when Options and/or Reload Options are exercised pursuant to 6 the terms of this Plan following termination of the Option holder's employment or on account of death or total and permanent disability. All other provisions of this Plan with respect to Options shall apply equally to Reload Options. O. Other provisions: The Option agreements authorized under the Plan shall be subject to such other terms and conditions, including, without limitation, restrictions upon the exercise of the Option, as the Committee shall deem advisable. Any such Option agreement shall contain such limitations and restrictions upon the exercise of the Option as shall be necessary in order that such Option can be an "incentive stock option" within the meaning of the Section 442 of the Code. VI. PURCHASE FOR INVESTMENT If, and to the extent that, the issuance of Shares pursuant to the exercise of Options is deemed by the Company to be subject to the United States Securities Act of 1933, as now in force or hereafter amended, ("1993 Act"), or to the securities laws of any other jurisdiction, the Company shall be under no obligation to issue the Shares covered by such exercise unless the person or persons who exercises or who exercise such Option shall make such warranty as may be required by any applicable securities law of any applicable jurisdiction and shall, in the case of the applicability of the 1933 Act, in the absence of an effective registration under such Act with respect to such Shares, warrant to the Company, at the time of such exercise, that such person is or that they are acquiring the Shares to be issued to such person or to them, pursuant to such exercise of the Option, for investment and not with a view to, or for sale in connection with, the distribution of any such Shares; and in such events the person or persons acquiring such Shares shall be bound by the provisions of a legend endorsed upon any share certificates expressing the requirements of any applicable non-United States securities law, or, in cases deemed governed by the 1933 Act substantially the following legend, which shall be endorsed upon the certificate or certificates evidencing the Shares issued by the Company pursuant to such exercise: "The shares have not been registered under the securities laws of any country including the United States Securities Act of 1933, as amended, and the Company may refuse to permit the sale or transfer of all or any of the shares until (1) the Company has received an opinion of Counsel satisfactory to the Company that any such transfer is exempt from registration under all applicable securities laws or (2) in the case of sales or transfer to which the United States Securities Act of 1933 is applicable, unless a registration statement with respect to such shares shall be effective under such Act, as amended." Without limiting the generality of the foregoing, the Company may delay issuance of the Shares until completion of any action or obtaining of any consent which the Company deems necessary under any applicable law (including, without limitation, state securities or "blue sky" laws). 7 VII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION In the event that the outstanding Common Stock, $.01 par value, of the Company is changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of any reorganization, merger, consolidation, recapitalization, reclassification, change in par value, stock split-up, combination of shares or dividend payable in capital stock, or the like, appropriate adjustment shall be made in the number and kind of Shares for the purchase of which Options may be granted under the Plan, and, in addition, appropriate adjustment shall be made in the number and kind of Shares and in the Option price per share subject to outstanding Options so that each Option holder shall be in a position equivalent to the position the Option holder would have been in had the Option holder exercised the Options immediately prior to the applicable event. No such adjustment shall be made which shall, within the meaning of Section 424 of the Code, constitute such a modification, extension or renewal of any Option as to cause it to be considered as the grant of a new Option. VIII. DISSOLUTION OR LIQUIDATION OF THE COMPANY Upon the dissolution or liquidation of the company other than in connection with a transaction to which the preceding Article VII is applicable, all Options granted hereunder shall terminate and become null and void; provided, however, that if the rights of a Participant or the Participant's Survivors hereunder have not otherwise terminated and expired, the Participant or the Participant's Survivors shall have the right immediately prior to such dissolution or liquidation to exercise any Option granted hereunder to the extent that the right to purchase Shares thereunder has accrued as of the date of exercise immediately prior to such dissolution or liquidation. IX. TERMINATION OF THE PLAN The Plan shall terminate on June 23, 2005. The Plan may be terminated at an earlier date by vote of the Shareholders; provided, however, that expiration or any such earlier termination shall not affect any Option granted or Option agreements executed prior to expiration or the effective date of such termination. X. AMENDMENT OF THE PLAN The Plan may be amended by action of the Committee or the Board of Directors of the Company; provided, however, that if the scope of any amendment is such as to require shareholder approval in order to preserve incentive stock option treatment, then such amendments shall also require approval, within one (1) year before or after the adoption thereof, by the shareholders, and provided further that if the scope of any amendment is such as to require shareholder approval in order to comply with Rule 16b-3 under the 1934 Act, then such amendment shall also require approval by the shareholders. Any amendment shall not affect any Options theretofore granted and any Option agreements theretofore executed by the Company 8 and a Participant, unless such amendment shall expressly so provide. No amendment shall adversely affect any Participant with respect to an outstanding Option without the written consent of such Participant. With the consent of the Option holder affected, the Committee may amend any outstanding Option agreement in a manner not inconsistent with the plan, including, without limitation, to accelerate the date of exercise of any installment of any Option. XI. EMPLOYMENT RELATIONSHIP Nothing herein contained shall be deemed to prevent the Company or an Affiliate from terminating the employment of a Participant, nor to prevent a Participant from terminating the Participant's employment with the Company or an Affiliate. XII. EFFECTIVE DATE This Plan first became effective as of January 8, 1982, subject to the approval, within one (1) year after such adoption, of the shareholders of the Company. 9 EX-10.21 5 b45838biexv10w21.txt EX-10.21 1985 NON-QUALIFIED STOCK OPTION PLAN Exhibit 10.21 BIOGEN, INC. 1985 NON-QUALIFIED STOCK OPTION PLAN (As amended and restated through February 7, 2003, effective as of February 7, 2003) I. PURPOSE OF THE PLAN The Plan is intended to encourage ownership of shares of the Common Stock by certain Employees and Directors of the Company and its Affiliates and to provide an additional incentive to those Employees and Directors to promote the success of the Company and its Affiliates. II. DEFINITIONS 1. "Affiliate" means (a) a corporation in respect of which the Company owns directly or indirectly fifty percent (50%) or more of the voting securities thereof or which is otherwise controlled by the Company; or (b) to the extent not inconsistent with Section 424 of the Code, an unincorporated trade or business controlled by the Company which has elected, for federal income tax purposes, to be either (i) classified as an association taxable as a corporation or (ii) disregarded as an entity separate from its owner (as provided in Section 301.7701-3 of the federal income tax regulations). For purposes of this definition, the Company shall be deemed to control another entity if the Company possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise. 2. "Code" means the Internal Revenue Code of 1986, as amended from time to time. 3. "Committee" means the Stock and Option Plan Administration Committee of the Board of Directors of the Company or, if such committee ceases to exist, the Board of Directors of the Company or a committee thereof to which responsibility for administering the Plan shall have been delegated. 4. "Common Stock" means the common stock of the Company, par value $0.01 per share. 5. "Company" means Biogen, Inc., a Massachusetts corporation. 6. "Corporate Change in Control" shall be deemed to have occurred upon: (i) the acquisition of beneficial ownership (as determined pursuant to the provisions of Rule 13d-3 under the Exchange Act) of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities by a person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding for this purpose, the Company or its Affiliates, or any employee benefit plan of the Company), Page 1 of 14 pursuant to a transaction or series of related transactions which the Board of Directors does not approve; or (ii) at such time as individuals who as of April 27, 2001 constitute the Board of Directors (the "Incumbent Board") cease for any reason to constitute a majority of the Board of Directors of the Company, provided that any person becoming a director subsequent to April 27, 2001 whose election or nomination for election by the Company's stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, shall, for purposes of the Plan, be considered as though such person were a member of the Incumbent Board (other than an individual whose initial assumption of office is in connection with an actual or threatened election contest related to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or (iii) the occurrence of any other event which the Incumbent Board in its sole discretion determines should be considered a Corporate Change of Control. 7. "Corporate Transaction" shall mean the following unless and until the transaction becomes a Corporate Change in Control: (i) a reorganization, recapitalization, merger or consolidation unless more than fifty percent (50%) of the Company's outstanding voting stock or the voting stock of the corporation resulting from the transaction (or the parent of such corporation) is held subsequent to the transaction by the persons who held the stock of the Company immediately prior to such transaction, or (ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company to a successor in interest to the business of the Company. 8. "Designated Employee" means an Employee or Director designated by the Committee, in its sole discretion, as a "Designated Employee" for purposes of the Plan at any time prior to the effective date of a Corporate Transaction. 9. "Director" means a member of the Board of Directors of the Company or an Affiliate. 10. "Employee" means an individual employed by the Company or an Affiliate as a common law employee (determined under the regular personnel policies, practices and classifications of the Company or the Affiliate, as applicable). An individual is not considered an Employee for purposes of the Plan if the individual is classified as a consultant or contractor under the Company or an Affiliate's regular personnel classifications and practices, or if the individual is a party to an agreement to provide services to the Company or an Affiliate without participating in the Plan, notwithstanding that such individual may be treated as a common law employee for payroll tax, coverage requirements under Section 410(b) of the Code, nondiscrimination requirements under Section 401(a)(4) or other legal purposes. Page 2 of 14 11. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended from time to time. 12. "Fair Market Value" shall have the meaning set forth in Section VI.A. 13. "For Cause" shall have the meaning set forth in Section VI.G. 14. "Incumbent Board" shall have the meaning set forth in the definition of "Corporate Change of Control." 15. "Involuntary Employment Action" shall have the meaning set forth in Section VI.R. 16. "ISO Plan" shall have the meaning set forth in Article III. 17. "Option" means a stock option granted under this Plan. 18. "Option Certificate" means a certificate delivered to an Option holder by the Company pursuant to the Plan, in such form as the Committee shall approve, which sets forth the terms and conditions of an Option. 19. "Plan" shall mean this 1985 Non-Qualified Stock Option Plan, as amended and/or restated from time to time. 20. "Retirement" shall have the meaning set forth in Section VI.J. 21. "Securities Act" shall mean the United States Securities Act of 1933, as amended from time to time. III. SHARES SUBJECT TO THE PLAN The aggregate number of shares as to which Options may be granted from time to time shall be 54,208,000 shares of the Common Stock; provided, however that such aggregate number shall be reduced by the number of shares which has been sold under, or may be sold pursuant to options granted from time to time under, the Company's 1982 Incentive Stock Option Plan (the "ISO Plan"), to the same extent as if such sales had been made or options granted pursuant to the Plan. Notwithstanding the foregoing, on the first day of each fiscal year of the Company (beginning in 2003) the number of shares as to which Options may be granted from time to time pursuant to the Plan shall be increased by an amount equal to the lesser of (i) 3,695,000 shares or the equivalent of such number of shares of the Common Stock after the Committee, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Article VIII of this Plan; or (ii) 2.5% of the number of outstanding shares of the Common Stock on the last trading day of the immediately preceding fiscal year. Page 3 of 14 If any Option granted under the Plan or the ISO Plan ceases to be "outstanding", in whole or in part, other than by reason of the exercise of such Option, the shares which were subject to such Option shall be available for the granting of other Options. Any Option shall be treated as "outstanding" until such Option is exercised in full, terminates under the provisions of the Plan or the ISO Plan, as the case may be, or expires by reason of lapse of time. Except as expressly provided above, the aggregate number of shares as to which Options may be granted shall be subject to change only by means of an amendment adopted in accordance with Article XI below, subject to the provisions of Article VIII. IV. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Committee. The membership of the Committee shall be determined, and shall be subject to change without cause and without notice from time to time, by the Board of Directors of the Company. The Committee is authorized to interpret the provisions of the Plan or of any Option and to make all rules and determinations necessary or advisable for the administration of the Plan. The interpretation and construction by the Committee of any provision of the Plan or of any Option granted under it shall be final, unless otherwise determined by the Incumbent Board. The Committee's determinations under the Plan do not need to be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Options under the Plan (whether or not such persons are similarly situated). Subject to the provisions of the Plan, Options may be granted upon such terms and conditions as the Committee may prescribe. V. ELIGIBILITY FOR PARTICIPATION The Committee shall determine which Employees and Directors shall be eligible to participate in the Plan. Without limiting the generality of the foregoing, Options may be awarded for reasons of performance, merit, promotion, bonus or upon new Employees joining the Company or any Affiliate. The Committee may grant to one or more such Employees or Directors one or more Options, and shall designate the number of shares to be optioned under each Option so granted; provided, however, that no Options shall be granted after December 31, 2011. In no event shall any Employee be granted in any calendar year Options to purchase or receive more than 2,400,000 shares, as adjusted pursuant to Article VIII, of the Common Stock pursuant to the Plan. VI. TERMS AND CONDITIONS OF OPTIONS No Option issued pursuant to the Plan shall be an incentive stock option under Section 422 of the Code. No purported grant of any Option shall be effective until such Option shall have been approved by the Committee, except as otherwise provided in Section VI.N below. The Committee may provide that Options be granted subject to such conditions as the Committee may deem appropriate, including without limitation, subsequent approval by the shareholders of Page 4 of 14 the Company of the Plan or any amendments thereto. Each Option shall be subject to at least the following terms and conditions: A. Option Price: Each Option Certificate shall state the Option price per share of the Common Stock covered by such Option grant. Except as otherwise determined by the Committee, the Option price per share for Options granted under the Plan shall be equal to the fair market value per share of Common Stock (the "Fair Market Value") on the date of grant of the Option; provided, however, that in no event shall the Option price be less than the par value per share of Common Stock. Fair Market Value shall be calculated as follows: (i) if the Common Stock is listed on a national securities exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market and sale prices are regularly reported for the Common Stock, then the Fair Market Value shall be the arithmetic mean between the "high" and "low" sale prices for the Common Stock reported on the applicable composite tape or other comparable reporting system on the date of grant, or if the date of grant is not a trading day, on the most recent trading day immediately prior to the date of grant; or (ii) if sale prices are not regularly reported for the Common Stock as described in clause (i) above but bid and asked prices for the Common Stock are regularly reported, then the Fair Market Value shall be the arithmetic mean between the closing or last bid and asked prices for the Common Stock on the date of grant or, if the date of grant is not a trading day, on the most recent trading day immediately prior to the date of grant; or (iii) if sale prices are not regularly reported for the Common Stock as described in clause (i) or (ii) above, then the Fair Market Value shall be such value as the Committee in good faith determines. B. Number of Shares: Each Option Certificate shall state the number of shares of the Common Stock to which it pertains. C. Term of Option: Each Option Certificate shall state the term of the Option which shall be ten (10) years from the date of the grant thereof, or at such earlier or later time as the Committee shall expressly state in the Option Certificate. D. Date of Exercise: Each Option Certificate shall state the date or dates on which the Option becomes exercisable, and may provide that the Option rights accrue or become exercisable in installments over a period of months or years, or upon the attainment of stated goals or events or through other circumstances or programs approved by the Committee. The Committee shall have the right to accelerate the date of exercise of any installment of any Option. E. Cancellation and Repurchase Rights: An Option Certificate may stipulate that an Option which becomes exercisable shall be subject to cancellation or that shares purchased upon the exercise of such Option shall be subject to repurchase rights in favor of the Company. In such event the Committee shall determine the date or dates, or event or events, upon which such cancellation or repurchase rights shall become effective or shall lapse, as the case may be and those provisions shall be set forth in the Option Certificate. F. Medium of Payment: The Option price shall be payable upon the exercise of the Option. It shall be payable (a) in United States dollars in cash or by check, (b) if permitted by Page 5 of 14 the Committee, in shares of the Common Stock held by the Option holder for at least six months having a fair market value (determined in the manner provided in Section VI.A above as of the date of exercise) equal to the cash exercise price of the Option, (c) at the discretion of the Committee, by delivery of the Option holder's personal note, for full, partial or no recourse, bearing interest payable not less than annually at market rate on the date of exercise and no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, with or without the pledge of shares of the Common Stock as collateral, (d) at the discretion of the Committee, in accordance with a cashless exercise program established with a securities brokerage firm, or (e) at the discretion of the Committee, by any combination of (a), (b), (c) and (d) above. G. Termination of Employment: An Option holder who ceases (for any reason other than death, total and permanent disability, Retirement or termination of employment For Cause) to be an Employee or Director of the Company or of an Affiliate may exercise any Option granted to the extent that the right to purchase shares thereunder has accrued on the date of such termination. Except as set forth in the next sentence or as otherwise set forth in the Plan, such Option shall be exercisable only within three (3) months after such date of termination, or, if earlier, within the originally prescribed term of the Option, unless the Committee shall set forth a different period in the Option Certificate. Notwithstanding anything in this Plan to the contrary, unless a different time period is specified in the Option Certificate, an Option holder (or permitted transferee of such individual) who ceases (for any reason other than For Cause) to be a member of the Board of Directors of the Company after the completion of at least six (6) full years of services on the Board may exercise any Option granted within the originally prescribed term of the Option but solely to the extent the right to purchase shares thereunder has accrued on the date of such termination. For purposes of the Plan, employment shall not be deemed terminated by reason of a transfer to another employer which is the Company or an Affiliate. If any Option is not exercised following the Option holder's termination within the time specified, the Option shall terminate and the shares covered by such Option shall revert to the Plan. An Option holder whose employment with the Company or an Affiliate is terminated For Cause or a Director who is removed from the Board of Directors For Cause shall forthwith immediately upon notice of such termination cease to have any right to exercise any Option, and the Option shall terminate and the shares covered by such Option shall revert to the Plan. For purposes of the Plan, termination "For Cause" shall be deemed to include (and is not limited to) dishonesty with respect to the Company or any Affiliate, insubordination, substantial malfeasance or non-feasance of duty, unauthorized disclosure of confidential information, breach by an Option holder of any provision of any employment, nondisclosure, non-competition or similar agreement between the Option holder and the Company or any Affiliate, and conduct substantially prejudicial to the business of the Company or an Affiliate. The determination of the Committee as to the existence of cause shall be conclusive. Any definition in an agreement between an Option holder and the Company or an Affiliate, which contains a conflicting definition of For Cause and which is in effect at the time of such termination, shall supersede the definition in the Plan with respect to the Option holder. An Option holder to whom an Option has been granted under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability, or who is on a Page 6 of 14 permitted leave of absence for any purpose, shall not, during the period of any such absence, be deemed by virtue of such absence alone, to have terminated his employment with the Company or with an Affiliate except as the Committee may otherwise expressly provide in the Option Certificate. H. Total and Permanent Disability: If an Option holder ceases to be an Employee or Director of the Company or of an Affiliate by reason of total and permanent disability, as determined by the Committee, any Option held by him or her on the date of disability shall be exercisable as to all or any part of the shares subject to the Option, all of which shares shall be fully vested as of the date of such disability. A disabled Option holder may exercise such Option only within a period of one (1) year after the date as of which the Committee determines that he or she became disabled or within such different period as may be determined by the Committee and set forth in the Option Certificate, or, if earlier, within the originally prescribed term of the Option. If any Option is not exercised following the Option holder's total and permanent disability within the time specified, the Option shall terminate and the shares covered by such Option shall revert to the Plan. I. Death: If an Option holder dies while the he is an Employee or Director of the Company or of an Affiliate, any Option held by him at the date of death shall be exercisable as to all or any part of the shares subject to the Option, all of which shares shall be fully vested as of the date of the Option holder's death. A deceased Option holder's legal representatives or one who acquires the Option by will or by the laws of descent and distribution may exercise such Option only within a period of one (1) year after the date of death or within such different period as may be determined by the Committee and set forth in the Option Certificate, or, if earlier, within the originally prescribed term of the Option. If any Option is not exercised following the Option holder's death within the time specified, the Option shall terminate and the shares covered by such Option shall revert to the Plan. J. Retirement: Unless otherwise set forth in an Option Certificate, immediately upon an Option holder's Retirement, such individual's then unvested Options, including those held by a permitted transferee of such individual, shall automatically accelerate and become fully vested for fifty percent (50%) of the number of shares covered by such unvested Options and for an additional ten percent (10%) of the number of shares covered by such unvested Options for every year of employment by the Company or any of its Affiliates beyond ten (10) years, up to the remaining number of unvested Options. Upon Retirement, a retired Option holder (or permitted transferee of such individual) may exercise any then outstanding Options solely to the extent the right to purchase shares has accrued or has been accelerated only within a period of three (3) years after the date of Retirement or within such different period as may be determined by the Committee and set forth in the Option Certificate, or, if earlier, within the originally prescribed term of the Option. If any Option is not exercised following the Option holder's Retirement within the time specified, the Option shall terminate and the shares covered by such Option shall revert to the Plan. For purposes of the Plan, the term "Retirement" as to any Employee or Director of the Company or any of its Affiliates shall mean such person's leaving the employment of the Company and its Affiliates after reaching age 55 with ten (10) years of service with the Company or its Affiliates, but not including pursuant to any termination For Page 7 of 14 Cause or pursuant to any termination for insufficient performance, as determined by the Company. The provisions of this Section VI.J shall be retroactive and shall apply to all outstanding Options granted under the Plan, regardless of the date of grant. K. Exercise of Option and Issue of Shares: Options shall be exercised by giving written notice to the Company or its designee, together with provision for payment of the Option price in accordance with Section VI.F. Such written notice shall be signed by the person exercising the Option, shall state the number of shares of the Common Stock with respect to which the Option is being exercised, and shall contain any warranty required by Article VII of the Plan. The issuance of the shares of the Common Stock upon exercise of the Option may be delayed by the Company if any law or regulation requires the Company to take any action with respect to the shares prior to the issuance thereof. Without limiting the generality of the foregoing, nothing contained herein shall be deemed to require the Company to issue any shares of the Common Stock if prohibited by law or applicable regulation. The shares of the Common Stock shall, upon issuance, be paid-up, non-assessable shares. L. Assignability and Transferability of Option: By its terms, an Option granted to an Option holder shall not be transferable by such Option holder other than (i) by will or by the laws of descent and distribution, or (ii) pursuant to a qualified domestic relations order, as defined by the Code or Title 1 of the Employee Retirement Income Security Act or the rules thereunder, or (iii) as otherwise determined by the Committee. The designation of a beneficiary of an Option by an Option holder shall not be deemed a transfer prohibited by this Section. Except as provided in the preceding sentence, an Option shall be exercisable, during an Option holder's lifetime, only by the Option holder (or by his or her legal representative) and shall not be assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation, or other disposition of any Option or of any rights granted thereunder contrary to the provisions of this Section, or the levy of any attachment or similar process upon an Option or other such rights, shall be null and void. M. Other Provisions: The Option Certificates shall be subject to such other terms and conditions, including, without limitation, restrictions upon the exercise of the Option, as the Committee shall deem advisable. N. Non-Employee Director Options: Each Director of the Company who is not an Employee of the Company or any of its Affiliates and who is appointed or elected to the Board of Directors of the Company on or after February 7, 2003, upon first being appointed or elected to the Board shall be automatically granted an Option to purchase 20,000 shares of Common Stock(each, an "Initial Grant") Each Director of the Company who is not an Employee of the Company or any of its Affiliates shall be automatically granted an Option to purchase an additional 10,000 shares of Common Stock (each a "Subsequent Grant"); provided that on the date of grant such person is Page 8 of 14 still a member of the Board of Directors of the Company. The date of grant of each Subsequent Grant to any Director appointed or elected to the Board of Directors of the Company on or after February 7, 2003 shall be the anniversary date of such Director's initial appointment or election to the Board. The date of grant of each Subsequent Grant to any Director appointed or elected to the Board of Directors of the Company prior to February 7, 2003 shall be the anniversary date of such Director's most recent prior Option grant under the Plan. The Initial Grant shall be exercisable as to 8,000 of the shares subject thereto upon completion of one full year of service on the Board of Directors of the Company after the date of grant, and as to an additional 6,000 shares upon completion of the second full year of such service, and as to the remaining 6,000 shares upon completion of the third full year of such service. Each Subsequent Grant shall be exercisable as to 4,000 of the shares subject thereto upon completion of one full year of service on the Board of Directors of the Company after the date of grant, and as to an additional 3,000 shares upon completion of the second full year of such service, and as to the remaining 3,000 shares upon completion of the third full year of such service. Each Option granted under this Section VI.N shall have an exercise price equal to the fair market value per share of Common Stock on the date of grant, as determined under Section VI.A. above, and a term of ten (10) years, unless earlier terminated pursuant to the other provisions of the Plan or the terms of the grant. Section VI.G, which cancels the Options of any Option holder determined by the Committee to have been terminated For Cause, shall not apply to the awards under this Section VI.N. O. Tax Withholding: In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Option holder's salary in connection with the exercise of an Option, the Option holder shall advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Option holder, the amount of such withholdings unless a different withholding arrangement, including the use of shares of the Common Stock, is authorized by the Committee (and permitted by law), provided, however, that with respect to persons subject to Section 16 of the Exchange Act, any such withholding arrangement involving use of shares shall be in compliance with any applicable provisions of Rule 16b-3 promulgated under Section 16 of the Exchange Act. If the Committee allows withholding through use of shares of the Common Stock, it shall be only to the statutory minimum amount. For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner provided in Section VI.A. as of the date of exercise. If the fair market value of the shares withheld is less than the amount of payroll withholdings required, the Option holder may be required to advance the difference in cash to the Company or the Affiliate employer. P. Reload Options: The Committee may authorize reload Options ("Reload Options") to purchase for cash or shares a number of shares of the Common Stock. The number of Reload Options shall equal (i) the number of shares of the Common Stock used to exercise the underlying Options and (ii) to the extent authorized by the Committee, the number of shares of the Common Stock used to satisfy any tax withholding requirement incident to the exercise Page 9 of 14 of the underlying Options. The grant of a Reload Option will become effective upon the exercise of underlying Options through the use of shares of the Common Stock held by the option holder for at least 6 months. Reload Options must be evidenced in Option Certificates or agreements. The Option price per share of the Common Stock deliverable upon the exercise of a Reload Option shall be the Fair Market Value on the date the grant of the Reload Option becomes effective. The term of each Reload Option shall be equal to the remaining option term of the underlying Option. No additional Reload Options shall be granted to Option holders when Options and/or Reload Options are exercised pursuant to the terms of the Plan following termination of the Option holder's employment or on account of death or total and permanent disability. All other provisions of the Plan with respect to Options shall apply equally to Reload Options. Q. Rights as a Shareholder: No Option holder shall have rights as a shareholder with respect to any shares of the Common Stock covered by such Option except as to such shares as have been registered in the Company's share register in the name of such person upon the due exercise of the Option. R. Effect of Corporate Transaction: In the event of a Corporate Transaction, the Committee shall, prior to the effective date of the Corporate Transaction, as to each outstanding Option under the Plan either (i) make appropriate provisions for the Options to be assumed by the successor corporation or its parent or be replaced with a comparable options to purchase shares of the capital stock of the successor corporation or its parent; or (ii) upon written notice to the Option holders provide that all Options must be exercised and the Plan will terminate (all Options having been made fully exercisable as set forth below in this Section VI.R); or (iii) terminate all Options in exchange for a cash payment equal to the excess of the then aggregate Fair Market Value of the shares subject to such Options (all Options having been made fully exercisable as set forth below in this Section VI.R) over the aggregate Option price thereof. The determination of comparability under this Section shall be made by the Committee and its determination shall be final, binding and conclusive. Each outstanding Option under the Plan which is assumed in connection with a Corporate Transaction or is otherwise to continue in effect shall be appropriately adjusted, immediately after such Corporate Transaction, to apply and pertain to the number and class of securities which would have been issued, in consummation of such Corporate Transaction, to an actual holder of the same number of shares of the Common Stock as are subject to such Option immediately prior to such Corporate Transaction. Appropriate adjustments shall also be made to the Option price payable per share, provided the aggregate Option price payable for such securities shall remain the same. In addition, the class and number of securities available for issuance under the Plan on both an aggregate and per participant basis shall be appropriately adjusted to reflect the effect of the Corporate Transaction upon the Company's capital structure. If at any time within two (2) years of the effective date of a Corporate Transaction there is an Involuntary Employment Action with respect to any Designated Employee, each then outstanding Option assumed or replaced under this Section and held by such Designated Employee (or a permitted transferee of such person) shall, upon the occurrence of such Involuntary Employment Action, automatically accelerate so that each such Option shall Page 10 of 14 immediately become exercisable for the total number of shares of Common Stock at the time subject to such Option, as assumed or replaced, and may be exercised for all or any portion of those shares to the extent not previously exercised. Upon the occurrence of an Involuntary Employment Action with respect to a Designated Employee, any outstanding Options held by such Designated Employee (and his or her permitted transferees) shall be exercisable within one (1) year of the Involuntary Employment Action or, if earlier, within the originally prescribed term of the Option. An "Involuntary Employment Action" as to an Designated Employee shall mean the involuntary termination of the Designated Employee's employment with the Company or an Affiliate other than For Cause, or the termination by the Designated Employee of his employment with the Company and its Affiliates upon the occurrence, without the Option holder's express written consent, of any of the following circumstances unless such circumstances are corrected (provided such circumstances are capable of correction): (i) any adverse and material alteration and diminution in the Option holder's position, title or responsibilities (other than a mere change in title or reporting relationship) as they existed immediately prior to the Corporate Transaction or as the same may be increased from time to time thereafter, (ii) a reduction of the Option holder's annual base salary or targeted bonus opportunity, in each case as in effect on the date prior to the Corporate Transaction or as the same may be increased from time to time thereafter, or (iii) relocation of the offices at which the Option holder is employed which increases the Option holder's daily commute by more than 100 miles on a round trip basis. In the event the Company terminates the Plan or elects to cash out the Options in accordance with clauses (ii) and (iii) of the first paragraph of this Section VI.R, then the exercisability of each Option outstanding under the Plan shall be automatically accelerated so that each such Option shall immediately prior to such Corporate Transaction, become exercisable for the full number of shares of the Common Stock purchasable under such Option to the extent not previously exercised and may be exercised prior to such Corporate Transaction for all or any portion of such shares. The Committee shall, in its discretion, determine the timing and mechanics required to implement the foregoing sentence. S. Acceleration Upon Corporate Change in Control: In the event of a Corporate Change in Control then the exercisability of each Option outstanding under the Plan shall be automatically accelerated so that each such Option shall immediately prior to such Corporate Change in Control, become exercisable for the full number of shares of the Common Stock purchasable under such Option to the extent not previously exercised and may be exercised for all or any portion of such shares consistent with Article VIII within the originally prescribed term of the Option. The Committee shall, in its discretion, determine the timing and mechanics required to implement the foregoing sentence. However, an outstanding Option under the Plan shall not be accelerated under this Section if and to the extent one or more limitations imposed by the Committee at the time of grant preclude such acceleration upon a Corporate Change in Control. T. The provisions of Sections VI.R and VI.S shall be retroactive and shall apply to all Options granted under the Plan, regardless of the date of grant. U. The grant of Options under the Plan shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or Page 11 of 14 to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. VII. PURCHASE FOR INVESTMENT If and to the extent that the issuance of shares pursuant to the exercise of Options is deemed by the Company to be subject to the Securities Act, or to the securities law of any other jurisdiction, the Company shall be under no obligation to issue shares covered by such exercise unless the person or persons who exercises or who exercise such Option shall make such warranty or take such action as may be required by any applicable securities law of any applicable jurisdiction and shall, in the case of the applicability of the Securities Act, in the absence of an effective registration under the Securities Act with respect to such shares, warrant to the Company, at the time of such exercise, that such person is or that they are acquiring the shares to be issued to such person or to them, pursuant to such exercise of the Option, for investment and not with a view to, or for sale in connection with, the distribution of any such shares; and in such events the person or persons acquiring such shares shall be bound by the provisions of a legend endorsed upon any share certificates expressing the requirements of any applicable non-United States securities law, or, in cases deemed governed by the Securities Act, substantially the following legend, which shall be endorsed upon the certificate or certificates evidencing the shares issued by the Company pursuant to such exercise: "The shares have not been registered under the securities laws of any country, including the United States Securities Act of 1933, as amended, and the Company may refuse to permit the sale or transfer of all or any of the shares until (1) the Company has received an opinion of counsel satisfactory to the Company that any such transfer is exempt from registration under all applicable securities laws or (2) in the case of sales or transfers to which the United States Securities Act of 1933, as amended, is applicable, unless a registration statement with respect to such shares shall be effective under such Act, as amended." Without limiting the generality of the foregoing, the Company may delay issuance of the shares until completion of any action or obtaining of any consent which the Company deems necessary under any applicable law (including without limitation state securities or "blue sky" laws). VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION In the event that outstanding shares of the Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of any reorganization, merger, consolidation, recapitalization, reclassification, change in par value, stock split-up, combination of shares or dividend payable in capital stock, or the like except in a Corporate Transaction for which such adjustments are set forth in Section VI.R above, appropriate adjustment shall be made in the number and kind of shares for the purchase of which Options may be granted under the Plan, including Options to be granted pursuant to Section VI.N above, and, in addition, appropriate adjustment shall be made in the number and kind of shares and in the Option price per share subject to outstanding Options so that each Option holder shall be in a position equivalent to the position the Option Page 12 of 14 holder would have been in had the Option holder exercised the Options immediately prior to the applicable event. IX. DISSOLUTION OR LIQUIDATION OF THE COMPANY Upon the dissolution or liquidation of the Company other than in connection with transactions to which the preceding Article VIII is applicable, all Options granted hereunder shall terminate and become null and void; provided, however, that if the rights hereunder of an Option holder or one who acquired an Option by will or by the laws of descent and distribution have not otherwise terminated and expired, the Option holder or such person shall have the right immediately prior to such dissolution or liquidation to exercise any Option granted hereunder to the extent that the right to purchase shares thereunder has accrued as of the date of exercise immediately prior to such dissolution or liquidation. X. TERMINATION OF THE PLAN Unless the Committee shall decide to reduce or, subject to shareholder approval, if required under Article XI, to extend the duration of the Plan, the Plan shall terminate on December 31, 2011. Termination of the Plan shall not affect any Options granted or any Option Certificates or agreements executed prior to the effective date of termination. XI. AMENDMENT OF THE PLAN The Plan may be amended by the Committee or the Board of Directors of the Company; provided, however, that if the scope of any amendment is such as to require shareholder approval then such amendment shall require approval by the shareholders. Any amendment shall not affect any Options theretofore granted and any Option Certificates or agreements theretofore executed by the Company and any Option holder unless such amendment shall expressly so provide. No amendment shall adversely affect any Option holder with respect to an outstanding Option without the written consent of such Option holder. With the consent of the Option holder affected, the Committee may amend any outstanding Option Certificate or agreement in a manner not inconsistent with the Plan, including, without limitation, to accelerate the date of exercise of any installment of any Option. XII. EMPLOYMENT RELATIONSHIP Nothing herein contained shall be deemed to prevent the Company or an Affiliate from terminating the employment of any Employee, nor to prevent any Employee from terminating his employment with the Company or an Affiliate. XIII. EFFECTIVE DATE The Plan first became effective on January 2, 1985. XIV GOVERNING LAW The Plan shall be construed and enforced in accordance with the law of The Page 13 of 14 Commonwealth of Massachusetts. Page 14 of 14 EX-10.22 6 b45838biexv10w22.txt EX-10.22 1987 SCIENTIFIC BOARD STOCK OPTION PLAN Exhibit 10.22 BIOGEN, INC. 1987 SCIENTIFIC BOARD STOCK OPTION PLAN (As amended and restated through February 7, 2003, effective as of February 7, 2003) I. PURPOSE OF THE PLAN The Plan is intended to encourage ownership of shares of the Common Stock by members of the Scientific Board of the Company and to provide an additional incentive to those Scientific Board members to promote the success of the Company and its Affiliates. II. DEFINITIONS 1. "Affiliate" means (a) a corporation in respect of which the Company owns directly or indirectly fifty percent (50%) or more of the voting shares thereof or which is otherwise controlled by the Company; or (b) to the extent not inconsistent with Section 424 of the Code, an unincorporated trade or business controlled by the Company which has elected, for federal income tax purposes, to be either (i) classified as an association taxable as a corporation or (ii) disregarded as an entity separate from its owner (as provided in Section 301.7701-3 of the federal income tax regulations). For purposes of this definition, the Company shall be deemed to control another entity if the Company possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise. 2. "Code" means the Internal Revenue Code of 1986, as amended from time to time. 3. "Committee" means the Stock and Option Plan Administration Committee of the Board of Directors of the Company or, if such committee ceases to exist, the Board of Directors of the Company or a committee thereof to which responsibility for administering the Plan shall have been delegated. 4. "Common Stock" means the common stock of the Company, par value $0.01 per share. 5. "Company" means Biogen, Inc., a Massachusetts corporation. 6. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended from time to time. 7. "Fair Market Value" shall have the meaning set forth in Section VI.A. 8. "Member" means a member of the Scientific Board of the Company. 9. "Option" means a stock option granted under the Plan. 10. "Option Certificate" means a certificate delivered to an Option holder by the Page 1 of 7 Company pursuant to the Plan, in such form as the Committee shall approve, which sets forth the terms and conditions of an Option. 11. "Plan" means this 1987 Scientific Board Stock Option Plan, as amended and restated from time to time. 12. "Securities Act" means the United States Securities Act of 1933, as amended from time to time. III SHARES SUBJECT TO THE PLAN The aggregate number of shares as to which Options may be granted from time to time shall be 3,020,000 shares of the Common Stock. If any Option ceases to be "outstanding", in whole or in part, other than by reason of the exercise of such Option, the shares which were subject to such Option shall be available for the granting of other Options. Any Option shall be treated as "outstanding" until such Option is exercised in full, terminates under the provisions of the Plan or expires by reason of lapse of time. The aggregate number of shares as to which Options may be granted shall be subject to change only by means of an amendment adopted in accordance with Article XI, subject to the provisions of Article VIII. IV. ADMINISTRATION OF THE PLAN The Plan shall be administered by the Committee. The membership of the Committee shall be determined, and shall be subject to change without cause and without notice from time to time, by the Board of Directors of the Company. The Committee is authorized to interpret the provisions of the Plan or of any Option and to make all rules and determinations necessary or advisable for the administration of the Plan. The interpretation and construction by the Committee of any provision of the Plan or of any Option granted under it shall be final. The Committee's determinations under the Plan do not need to be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Options under the Plan (whether or not such persons are similarly situated). Subject to the provisions of the Plan, Options may be granted upon such terms and conditions as the Committee may prescribe. V. ELIGIBILITY FOR PARTICIPATION The Committee shall determine which Members shall be eligible to participate in the Plan. Without limited the generality of the foregoing, Options may be awarded for reasons of performance, merit, bonus or upon new Members joining the Scientific Board of the Company. The Committee may grant to one or more such Members one or more Options, and shall Page 2 of 7 designate the number of shares to be optioned under each Option so granted; provided, however, that no Options shall be granted after December 31, 2002. VI. TERMS AND CONDITIONS OF OPTIONS No Option issued pursuant to the Plan shall be an incentive stock option under Section 422 of the Code. No purported grant of any Option shall be effective until such Option shall have been approved by the Committee. The Committee may provide that Options be granted subject to such conditions as the Committee may deem appropriate, including without limitation, subsequent approval by the shareholders of the Company of the Plan or any amendments thereto. Each Option shall be subject to at least the following terms and conditions: A. Option Price: Each Option Certificate shall state the Option price per share of the Common Stock covered by such Option grant. Except as otherwise determined by the Committee, the Option price per share for Options granted under the Plan shall be equal to the fair market value per share of Common Stock (the "Fair Market Value") on the date of grant of the Option; provided, however, that in no event shall the Option price be less than the par value per share of the Common Stock. Fair Market Value shall be calculated as follows: (i) if the Common Stock is listed on a national securities exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market and sale prices are regularly reported for the Common Stock, then the Fair Market Value shall be the arithmetic mean between the "high" and "low" sale prices for the Common Stock reported on the applicable composite tape or other comparable reporting system on the date of grant, or if the date of grant is not a trading day, on the most recent trading day immediately prior to the date of grant; or (ii) if sale prices are not regularly reported for the Common Stock as described in clause (i) above but bid and asked prices for the Common Stock are regularly reported, then the Fair Market Value shall be the arithmetic mean between the closing or last bid and asked prices for the Common Stock on the date of grant or, if the date of grant is not a trading day, on the most recent trading day immediately prior to the date of grant; or (iii) if sale prices are not regularly reported for the Common Stock as described in clause (i) or (ii) above, then the Fair Market Value shall be such value as the Committee in good faith determines. B. Number of Shares: Each Option Certificate shall state the number of shares of the Common Stock to which it pertains. C. Term of Option: Each Option Certificate shall state the term of the Option which shall be ten (10) years from the date of the grant thereof or at such earlier or later time as the Committee shall expressly state in the Option Certificate. D. Date of Exercise: Each Option Certificate shall state the date or dates on which the Option becomes exercisable, and may provide that the Option rights accrue or become exercisable in installments over a period of months or years, or upon the attainment of stated goals or events or through other circumstances or programs approved by the Committee. The Committee shall have the right to accelerate the date of exercise of any installment of any Option. Page 3 of 7 E. Cancellation and Repurchase Rights: An Option Certificate may stipulate that an Option which becomes exercisable shall be subject to cancellation or that shares purchased upon the exercise of such Option shall be subject to repurchase rights in favor of the Company. In such event the Committee shall determine the date or dates, or event or events, upon which such cancellation or repurchase rights shall become effective or shall lapse, as the case may be and those provisions shall be set forth in the Option Certificate. F. Medium of Payment: The option price shall be payable upon the exercise of the Option. It shall be payable (a) in United States dollars in cash or by check, (b) if permitted by the Committee, in shares of the Common Stock held by the Option holder for at least six months having a fair market value (determined in the manner provided in Section VI.A as of the date of exercise) equal to the cash exercise price of the Option, (c) at the discretion of the Committee, by delivery of the Option holder's personal note, for full, partial or no recourse, bearing interest payable not less than annually at market rate on the date of exercise and no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, with or without the pledge of shares of the Common Stock as collateral, (d) at the discretion of the Committee, in accordance with a cashless exercise program established with a securities brokerage firm, or (e) at the discretion of the Committee, by any combination of (a), (b), (c) and (d) above. G. Exercise of Option and Issue of Shares: Options shall be exercised by giving written notice to the Company or its designee, together with provision for payment of the Option price in accordance with Section VI.F. Such written notice shall be signed by the person exercising the Option, shall state the number of shares of the Common Stock with respect to which the Option is being exercised, and shall contain any warranty required by Article VII of the Plan. The issuance of the shares of the Common Stock upon exercise of the Option may be delayed by the Company if any law or regulation may be delayed by the Company if any law or regulation requires the Company to take any action with respect to the shares prior to the issuance thereof. Without limiting the generality of the foregoing, nothing contained herein shall be deemed to require the Company to issue any shares of the Common Stock if prohibited by law or applicable regulation. The shares of the Common Stock shall, upon issuance, be paid-up, non-assessable shares. H. Assignability and Transferability of Option: By its terms, an Option granted to an Option holder shall not be transferable by such Option holder other than (i) by will or by the laws of descent and distribution, or (ii) pursuant to a qualified domestic relations order, as defined by the Code or Title 1 of the Employee Retirement Income Security Act or the rules thereunder, or (iii) as otherwise determined by the Committee. The designation of a beneficiary of an Option by an Option holder shall not be deemed a transfer prohibited by this Section. Except as provided in the preceding sentence, an Option shall be exercisable, during an Option holder's lifetime, only by the Option holder (or his or her legal representative) and shall not be assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation, or other disposition of any Option or of any rights granted thereunder contrary to the provisions of this Section, or the levy of any attachment or similar process upon an Option or other such rights, shall be null and void. Page 4 of 7 I. Other Provisions: The Option Certificates shall be subject to such other terms and conditions, including, without limitation, restrictions upon the exercise of the Option, as the Committee shall deem advisable. J. Tax Withholding: In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Option holder's salary in connection with the exercise of an Option, the Option holder shall advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Option holder, the amount of such withholdings unless a different withholding arrangement, including the use of shares of the Common Stock, is authorized by the Committee (and permitted by law); provided, however, that with respect to persons subject to Section 16 of the Exchange Act, any such withholding arrangement shall be in compliance with any applicable provisions of Rule 16b-3 promulgated under Section 16 of the Exchange Act. If the Committee allows withholding through use of shares of the Common Stock, it shall be only to the statutory minimum amount. For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner provided in Section VI.A as of the date of exercise. If the fair market value of the shares withheld is less than the amount of payroll withholdings required, the Option holder may be required to advance the difference in cash to the Company or the Affiliate employer. K. Rights as a Shareholder: No Option holder shall have rights as a shareholder with respect to any shares of the Common Stock covered by such Option except as to such shares as have been registered in the Company's share register in the name of such person upon the due exercise of the Option. VII. PURCHASE FOR INVESTMENT If and to the extent that the issuance of shares pursuant to the exercise of Options is deemed by the Company to be subject to the Securities Act, or to the securities law of any other jurisdiction, the Company shall be under no obligation to issue shares covered by such exercise unless the person or persons who exercises or who exercise such Option shall make such warranty or take such action as may be required by any applicable securities law of any applicable jurisdiction and shall, in the case of the applicability of the Securities Act, in the absence of an effective registration under the Securities Act with respect to such shares, warrant to the Company, at the time of such exercise, that such person is or that they are acquiring the shares to be issued to such person or to them, pursuant to such exercise of the Option, for investment and not with a view to, or for sale in connection with, the distribution of any such shares; and in such events the person or persons acquiring such shares shall be bound by the provisions of a legend endorsed upon any share certificates expressing the requirements of any applicable non-United States securities law, or, in cases deemed governed by the Securities Act, substantially the following legend, which shall be endorsed upon the certificate or certificates evidencing the shares issued by the Company pursuant to such exercise: "The securities represented by this certificate have not been registered Page 5 of 7 under the securities laws of any country, including the United States Securities Act of 1933, as amended, and the Company may refuse to permit the sale or transfer of all or any of the shares until (1) the Company has received an opinion of counsel satisfactory to the Company that any such transfer is exempt from registration under all applicable securities laws or (2) in the case of sales or transfers to which the united Sates Securities Act of 1933, as amended, is applicable, unless a registration statement with respect to such shares shall be effective under such Act, as amended." Without limiting the generality of the foregoing, the Company may delay issuance of the shares until completion of any action or obtaining of any consent which the Company deems necessary under any applicable law (including without limitation state securities or "blue sky" laws). VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION In the event that outstanding shares of the Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of any reorganization, merger, consolidation, recapitalization, reclassification, change in par value, stock split-up, combination of shares or dividend payable in capital stock, or the like, appropriate adjustment shall be made in the number and kind of shares for the purchase of which Options may be granted under the Plan, and, in addition, appropriate adjustment shall be made in the number and kind of shares and in the option price per share subject to outstanding Options so that each Option holder shall be in a position equivalent to the position the Option holder would have been in had the Option holder exercised the Option immediately prior to the applicable event. IX. DISSOLUTION OR LIQUIDATION OF THE COMPANY Upon the dissolution or liquidation of the Company other than in connection with a transaction to which the preceding Article VIII is applicable, all Options granted hereunder shall terminate and become null and void; provided, however, that if the rights hereunder of an Option holder or one who acquired an Option by will or by the laws of descent and distribution have not otherwise terminated and expired, the Option holder or such person shall have the right immediately prior to such dissolution or liquidation to exercise any Option granted hereunder to the extent that the right to purchase shares thereunder has accrued as of the date of exercise immediately prior to such dissolution or liquidation. X. TERMINATION OF THE PLAN Unless the Committee shall decide to reduce or, subject to shareholder approval, if required under Article XI, to extend the duration of the Plan, the Plan shall terminate on December 31, 2002. Termination of the Plan shall not affect any Options granted or any Option Certificates or agreements executed prior to the effective date of termination. XI. AMENDMENT OF THE PLAN Page 6 of 7 The Plan may be amended by the Committee or the Board of Directors of the Company; provided, however, that if the scope of any amendment is such as to require shareholder approval then such amendment shall require approval by the shareholders. Any amendment shall not affect any Options theretofore granted and any Option Certificates or agreements theretofore executed by the Company and any Option holder unless such amendment shall expressly so provide. No amendment shall adversely affect any Option holder with respect to an outstanding Option without the written consent of such Option holder. With the consent of the Option holder affected, the Committee may amend any outstanding Option Certificate or agreement in a manner not inconsistent with the Plan, including, without limitation, to accelerate the date of exercise of any installment of any Option. XII. EMPLOYMENT RELATIONSHIP Nothing herein contained shall be deemed to prevent the Company or an Affiliate from terminating the employment or consultancy of any Member, nor to present any Member from terminating his employment or consultancy with the Company or an Affiliate. XIII. EFFECTIVE DATE The Plan first became effective on March 6, 1987. XIV. GOVERNING LAW The Plan shall be construed and enforced in accordance with the laws of The Commonwealth of Massachusetts. Page 7 of 7 EX-10.44 7 b45838biexv10w44.txt EX 10.44 LETTER AGREEMENT - THOMAS BUCKNUM 6/11/99 Exhibit 10.44 [BIOGEN LOGO] Vice President, Human Resources - -------------------------------------------------------------------------------- FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 - 617-679-2000 - FAX 617-679-2617 PERSONAL AND CONFIDENTIAL JUNE 11, 1999 Mr. Thomas J. Bucknum 381 Beacon Street Boston, MA 02116 Dear Tom: This confirms your discussion with Jim Vincent and me related to your new role in the organization. Effective June 10, 1999, your new title is Vice President and General Counsel with a base salary of $225,000 and a target bonus of 30%. Additionally, you have been granted 25,000 stock options as of June 10, 1999 with a grant value of $2,710,938 (25,000 shares at $108.4375). As an officer of the company, you will be required to participate in our program for executive stock ownership. We believe it is very important that our key leaders have personal stock ownership. I will outline the program to you. Additionally, in your new role you are now eligible for the following: 1. VACATION - You are entitled to four (4) weeks vacation. 2. SUPPLEMENTAL SAVINGS PLAN: You are entitled to participate in the Voluntary Executive Supplemental Savings Plan. This plan allows you to defer from your current taxation up to 50% of your base salary and 100% of your 1999 bonus, if there is one. Rick Fisher can outline the details of the program if you are interested in participating. 3. LIFE INSURANCE: You will be provided Biogen's Executive Term Life Insurance coverage for a total of $1,000,000. This coverage is based on your successfully meeting the medical standards as stated in the Executive Term insurance policy. 4. TAX REVIEW/PREPARATION: You are entitled to the preparation and/or review, including review of estimated taxes of your annual Federal and State tax returns, which is currently administered through Price WaterhouseCoopers. The cost of this service is covered by Biogen. 5. INVOLUNTARY TERMINATION: If you are involuntarily terminated from employment with Biogen (other than for cause), Biogen will protect you by paying you a supplementary amount (the [BIOGEN LOGO] Vice President, Human Resources Mr. Thomas J. Bucknum June 11, 1999 Page 2 "Supplementary Amount") equal to your then present base salary for a period (the "Extra Period") ending on the earlier of (i) the date twelve months from your termination and (ii) the date you start another job. During such period, Biogen will also pay to continue your health benefits (i.e., health and dental plan coverage), provided such benefits are accorded employees generally and Biogen can obtain the relevant coverage. If you need continued coverage to prevent a gap in health coverage between your Biogen coverage and that at your new job, Biogen will extend such coverage for up to 30 days (to the extent that the Extra Period is less than twelve months) after you start your new job. The Supplementary Amount will be paid on the same schedule as your salary would have been paid. You will not be an employee of Biogen during the time of such payments and will not accrue any benefits or other rights (such as, but not limited to, pension plan vesting or accrual, stock option vesting, vacation pay, etc.) during such period except health benefits as described above. You agree to notify us when you accept a new job. Sincerely, /s/ Frank A. Burke, Jr. Frank A. Burke, Jr. Vice President, Human Resources EX-10.45 8 b45838biexv10w45.txt EX 10.45 LETTER AGREEMENT - T. BUCKNUM 10/19/01 Exhibit 10.45 Vice President, Human Resources October 19, 2001 Thomas Bucknum 381 Beacon Street Boston, MA 02116 Dear Tom: I am pleased to confirm Jim Mullen's conversation appointing you to Executive Vice President - General Counsel. This appointment recognizes the increasing importance of your role and your leadership capabilities. As an Executive Vice President of Biogen, we know you will continue to be a key contributor to Biogen's mission, vision, and values. I am also pleased to note you are eligible for the following compensation and/or benefits as outlined below. TARGET BONUS: Your incentive target is 50% of your base salary. LONG TERM INCENTIVES: Biogen has adopted a new approach to communicating and granting stock options to employees. You will be eligible for an annual merit stock option grant, based on a design which emphasizes the future expected value of the grant. The details of how we will communicate and value options will be outlined in December. CHANGE OF CONTROL: You have been designated as a "Designated Employee" for purposes of Biogen's 1985 Non-Qualified Stock Option Plan. If at any time within two years following a Corporate Transaction (as defined in the stock option plan) your employment with Biogen is terminated by Biogen other than for cause, then each outstanding option held by you will automatically accelerate so that the option immediately becomes fully exercisable and may be exercised for a period of one year following the termination of your employment or, if earlier, until the expiration of the option. Please read the stock option plan for more details about the rights of a Designated Employee in the event of a Corporate Transaction and any applicable limitations. VACATION: You are entitled to an additional week of vacation each year. This week is over and above the company's normal vacation schedule (which is based upon years of service). SUPPLEMENTAL SAVINGS PLAN: You will be entitled to participate in the Voluntary Executive Supplemental Savings Plan. This plan allows participants to defer [pretax] base salary and future bonuses. Enrollment in this plan takes place in December each year. You will be provided additional information on the plan at that time. Vice President, Human Resources LIFE INSURANCE: You will have life insurance coverage that is the greater of $1,000,000 or three times your annual salary and subject to the normal medical standards of the life insurance policy. SEVERANCE: You will have a minimum severance benefit that is the greater of the severance outlined in your letter dated June 11, 1999 or the severance outlined in the Executive Severance document, which has been included with this letter. EXECUTIVE STOCK OWNERSHIP: You will be expected to acquire and maintain a personal financial interest in Biogen. Ownership is defined as stock held outright, stock held in the 401(k) plan and stock held under the Employee Stock Purchase Plan. Vested but unexercised shares would also be counted toward ownership guidelines. You will be required to maintain a financial interest of six times base salary. You will have a five-year period from the date of your appointment to Vice President to obtain this ownership level. TAX PREPARATION: You are eligible to have your federal and state income taxes prepared by PricewaterhouseCoopers. On behalf of Jim Mullen, please accept my sincere congratulations and best wishes for future success with Biogen. Sincerely, /s/ Frank A. Burke, Jr. Frank A. Burke, Jr. /bk Attachment EX-10.48 9 b45838biexv10w48.txt EX 10.48 ANTEGREN DEVELOPMENT AND MARKETING COLL. EXHIBIT 10.48 ANTEGREN DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT BETWEEN BIOGEN, INC. AND ELAN PHARMA INTERNATIONAL LIMITED AUGUST 15, 2000 CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. Exhibit A Alpha 4 Integrin Exhibit B Financial Planning, Accounting and Reporting for the Elan/Biogen Antegren Development and Marketing Collaboration Agreement Exhibit C Development Plan Exhibit D Letter Agreement with Lonza Exhibit E *** Exhibit F Press Release Schedule 1.4 Description of Antegren Schedule 1.9 Biogen Patents Schedule 1.28 Current Clinical Trials Schedule 1.35 Elan In-Licenses Schedule 1.37 Elan Patents Schedule 4.6(c) Elan's Pre-Effective Date Development Costs Schedule 4.8 Third Party Research Agreements Schedule 7.1(b)(i) Elan's Commitments to Third Party Contract Manufacturers Schedule 7.1(b)(ii) Existing Inventory Schedule 11.5(a) Existing Oppositions/Interferences CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. -i- ANTEGREN DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT This Antegren Development and Marketing Collaboration Agreement (the "Agreement") is entered into on this 15th day of August, 2000 by and between BIOGEN, INC., a Massachusetts corporation, and its Affiliates ("Biogen") and ELAN PHARMA INTERNATIONAL LIMITED, an Irish private limited company, and shall be effective as of the HSR Clearance Date or, if no filing is to be made under the HSR Act, then it shall be effective on the date set forth above (in either case, the "Effective Date"). Biogen and Elan (as defined below) may each be referred to herein individually as a "Party" and collectively as the "Parties". RECITALS 1. Each Party has an interest in the preclinical and clinical development of immunoglobulins and antibodies as means of inhibiting the activity of Alpha-4 Integrin (as defined below), a subunit of an alpha-beta heterodimeric transmembrance glycoprotein implicated in the development of certain diseases, including multiple sclerosis and inflammatory bowel disease. 2. Elan has identified a therapeutic with potential value in treating disease conditions associated with Alpha-4 Integrin, known as Antegren (as defined below) which is currently in Phase II clinical trials. 3. By combining their substantial experience and expertise, the Parties wish, for the exclusive and mutual benefit of both, to work collaboratively to expedite the development, regulatory approval, and commercialization of Antegren. 4. By working together, the Parties wish to reduce cost barriers to research and development that each would face if acting individually, and to enable each Party to build and support additional sales, marketing and promotional expertise that may eventually expand their respective capabilities with respect to other products. 5. The Parties believe that a series of collaborations will lower their costs, expedite the drug approval and delivery process, establish an effective and efficient manufacturing and distribution system for Antegren, and be the most efficient and cost effective way of promoting the therapeutic while expanding each Party's presence in pharmaceuticals markets. 6. Nothing in the Agreement is intended to limit the right or ability of each Party independently to conduct research on other products, including other therapeutics that may be identified for multiple sclerosis and inflammatory bowel disease, or to manufacture, distribute, market, or promote such other products. 7. Elan and Biogen each wish to grant to the other certain exclusive licenses under each Party's respective intellectual property rights to permit the other Party to participate in exclusive and mutually beneficial collaborative development, marketing, co-promotion and sales efforts for Antegren and to maintain an exclusive collaboration with respect to the Licensed Products covered by this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: ARTICLE 1. DEFINITIONS The following capitalized terms, whether used in the singular or the plural, shall have the following meanings as used in this Agreement unless otherwise specifically indicated: 1.1 "AFFILIATE(S)" shall mean, with respect to any person or entity, any other person or entity which controls, is controlled by or is under common control with such person or entity. A person or entity shall be regarded as in control of another entity if it owns or controls, directly or indirectly, (i) in the case of corporate entities at least fifty percent (50%) (or the maximum ownership interest permitted by law) of the equity securities in the subject entity entitled to vote in the election of directors and, (ii) in the case of an entity that is not a corporation, at least fifty percent (50%) (or the maximum ownership interest permitted by law) of the equity securities or other ownership interests with the power to direct the management and policies of such subject entity or entitled to elect the corresponding management authority, provided, however, that the term "Affiliate" shall not include subsidiaries or other entities in which a Party or its Affiliates owns a majority of the ordinary voting power necessary to elect a majority of the board of directors or other governing board, but is restricted from electing such majority by contract or otherwise, until such time as such restrictions are no longer in effect. 1.2 "ALPHA-4 INTEGRIN" shall mean any of those alpha-beta heterodimeric transmembrane glycoproteins known as integrins where the alpha subunit chain has the composition known as alpha-4, including, without limitation, the composition of matter characterized on Exhibit A hereto. 1.3 "ANNUAL WORKPLAN/BUDGET" shall mean the detailed schedule of Development activities prepared by the Joint Project Team which sets out the schedule, nature, and allocation of responsibilities of each Party for Development work and the agreed upon budget for such activities. The Annual Workplan/Budget shall be prepared by the Joint Project Team, subject to approval by the JSC, as specified in Section 4.2. 3 1.4 "ANTEGREN" shall mean the Licensed Product which is the subject of the Current Clinical Trials and which is more fully characterized on Schedule 1.4. 1.5 "ANTEGREN TRADEMARK" shall mean U.S. Registration No. 2,063,937, the international equivalence thereof or such other trademark, mark or source designating mark and foreign equivalents as may be agreed to by the JCT and approved by the JSC for use in connection with Antegren. 1.6 "ANTICIPATED PHASE III START DATE" shall mean September 2001, provided, however, that if the technology transfer agreement referenced in Section 7.1(a) of this Agreement has not been executed by July 21, 2000, the Anticipated Phase III Start Date shall be such later date as reflects each day of delay until execution of that agreement. 1.7 "Biogen Cost" shall mean Biogen's Estimated Per Unit COGs plus Biogen's Estimated Per Unit Distribution Costs. 1.8 "Biogen Know-how" shall mean any and all Know-how which is within the Control of Biogen as of the Effective Date or during the Term of this Agreement, and (a) is useful for a Party to perform its tasks under this Agreement, the Development Plan, any associated Annual Workplan/Budget, the Commercialization Plan, any associated Annual Commercialization Plan/Budget or (b) is otherwise useful to Promote, market, use, Develop, Commercialize, manufacture, sell or import Licensed Products in the Field. 1.9 "Biogen Patents" shall mean any and all Patents that are Controlled by Biogen as of the Effective Date or during the Term of this Agreement and (i) that claim Know-how that is necessary or useful to research, Develop, make, use or sell Licensed Products in the Field or (ii) that claim Licensed Product or any uses of Licensed Product in the Field or (iii) which otherwise would, but for this Agreement, be infringed by the Development, manufacturing and/or Commercialization activities of Elan performed under this Agreement. The term "Biogen Patents" shall also include Biogen's interest in any Collaboration Invention Patent Rights and in any Patents owned jointly by the Parties as provided hereunder. "Biogen Patents" known to be existing as of the date hereof are listed in Schedule 1.9. 1.10 "Biogen Percentage" shall mean the percentage specified as the Biogen Percentage under Section 6.1, as adjusted pursuant to Sections 4.7. The initial Biogen Percentage shall be *** . 1.11 "Blocking Third Party Intellectual Property" shall mean, in the Territory, on a country-by-country basis, a valid patent or patent application in such country owned or otherwise controlled by a Third Party, in the absence of a license to which, the Development, manufacture and/or Commercialization of Antegren or, as CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 4 applicable, other Licensed Product would infringe such patent or a patent that issues from such patent application. 1.12 Bulk Supplies" shall mean bulk supplies of Licensed Product in a suitable form, as specified under this Agreement or under any manufacturing agreement between the Parties, ready for fill and finish. 1.13 Calendar Quarter" shall mean the respective periods of three consecutive calendar months ending on March 31, June 30, September 30 or December 31, for so long as this Agreement is in effect. 1.14 "Change of Control" shall mean any of the following: (a) the sale or disposition of all or substantially all of the assets of a Party or its direct or indirect parent corporation to a Third Party, (b) the acquisition by a Third Party which constitutes one person, as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), together with any such person's "affiliates" or "associates", as such terms are defined in the Exchange Act, other than an employee benefit plan (or related trust) sponsored or maintained by a Party or any of its Affiliates, of more than 50% of the outstanding shares of voting capital stock of a Party or its direct or indirect parent corporation, or (c) the merger or consolidation of a Party or its direct or indirect parent corporation with or into another corporation, other than, in the case of this clause (c), an acquisition or a merger or consolidation of a Party or its direct or indirect parent corporation in which holders of shares of the voting capital stock of the Party or its direct or indirect parent corporation, as the case may be, immediately prior to the acquisition, merger or consolidation will have at least fifty percent (50%) of the ownership of voting capital stock of the acquiring Third Party or the surviving corporation in such merger or consolidation, as the case may be, immediately after the merger or consolidation. 1.15 "Clinical Supplies" shall mean supplies of Licensed Product in suitable form, whether manufactured by Lonza or by Biogen, as specified under this Agreement or under any manufacturing agreement between the Parties, manufactured in compliance with GMP, if required given the intended use, and ready to be used for the conduct of pre-clinical and/or human clinical trials of a Licensed Product in the Field by the Parties pursuant to the Development Plan and Annual Workplan/Budget. 1.16 "Clinical Trial Application" shall mean an effective Notice of a Claimed Investigational New Drug Exemption, as defined in Title 21 of the Code of Federal Regulations, on file with the FDA before the commencement of clinical trials of Licensed Products in humans, or any comparable filing with any relevant regulatory agencies or other governmental entities in any country in the Territory. 1.17 "Collaboration Invention" shall mean all Inventions Controlled by either Party, either alone or jointly with the other Party, which Inventions are made (meaning that they are conceived during the Term and experimentation has been initiated during the Term) by either Party's employees, agents or subcontractors in the performance of such Party's obligations under this Agreement, regardless of whether such 5 Collaboration Inventions are made solely by such Party's employees, agents or subcontractors or jointly with the employees, agents or subcontractors of the other Party. 1.18 "Collaboration Invention Patent Rights" shall mean Patents which are Controlled by either Party and which claim Collaboration Inventions. 1.19 "Combination Product" shall mean a product containing both the Licensed Product and one or more other active ingredients in addition to the Licensed Product where the other active ingredients have independent prophylactic or therapeutic effect when used alone to treat the disease or indication for which the Combination Product is labeled, whether the Licensed Product and the other active ingredients are together in a physical mixture or packaged and priced together as a single product. 1.20 "Combination Product Amount" shall mean the following: in the event a Licensed Product is sold in the form of a Combination Product, Gross Sales or, as applicable, Royalty-Bearing Sales for such Combination Product for purposes of this Agreement will be determined by multiplying actual Gross Sales or, as applicable, Royalty-Bearing Sales of such Combination Product by *** , where A is the invoice price of the Licensed Product, if sold separately, and B is the invoice price of any other active component or components in the combination, if sold separately, in each case in the same country and in the same dosage as in the Combination Product. If, on a country-by-country basis, the other active component or components in the combination are not sold separately in such country, Gross Sales or, as applicable, Royalty-Bearing Sales, shall be calculated by multiplying actual Gross Sales, or as, applicable, Royalty-Bearing Sales, of such Combination Product by *** where A is the invoice price of the Licensed Product if sold separately, and C is the invoice price of the Combination Product, in each case in the same country and in the same dosage as in the Combination Product. If, on a country-by-country basis, the Licensed Product component of the Combination Product is not sold separately in such country, but the other active component or components are sold separately, Gross Sales or, as applicable, Royalty-Bearing Sales, shall be calculated by multiplying actual Gross Sales or, as applicable, Royalty-Bearing Sales, of such Combination Product by *** where B is the invoice price of the other active component or components, if sold separately, and C is the invoice price of the Combination Product, in each case in the same country and in the same dosage as in the Combination Product. If, on a country-by-country basis, neither the Licensed Product nor the other active component or components of the Combination Product is sold separately in such country, Gross Sales, or, as applicable, Royalty Bearing Sales, for such Combination Product shall be *** . 1.21 "Commercialization" shall mean any and all activities constituting importing, marketing, distributing, offering for sale and selling a Licensed Product in the Field and shall include but not be limited to Promotion as well as activities required to CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 6 fulfill ongoing regulatory obligations, including adverse event reporting. When used as a verb, "Commercialize" shall mean to engage in Commercialization. 1.22 "Commercially Reasonable and Diligent Efforts" shall mean the level of effort and resources normally used by a Party for a product or compound owned by it or to which it has rights, which is of similar market potential and at a similar stage in its development or product life, taking into account, without limitation, with respect to Licensed Product issues of safety and efficacy, product profile, the proprietary position of Licensed Product, the then current competitive environment for the Licensed Product and the likely timing of the Licensed Product's entry into the market, the regulatory environment and status of Licensed Product, and other relevant scientific, technical and commercial factors. Without limiting the foregoing, Commercially Reasonable and Diligent Efforts as it applies to the Development of Licensed Products hereunder shall mean adherence to the activities and time lines (to the extent adherence to such activities and time lines is controllable by the Party responsible for performing such activities) set forth in the then most current version of the Development Plan and its associated Annual Workplan/Budget, subject to delays caused by issues of safety and efficacy and other technical and scientific issues that may arise or by any other factor outside of the reasonable control of the responsible Party. Notwithstanding the foregoing, to the extent that the performance of a Party's responsibilities hereunder is adversely affected by the other Party's failure to perform its responsibilities hereunder, such Party shall not be deemed to have failed to use its Commercially Reasonable and Diligent Efforts in performing such responsibilities. 1.23 "Commercially Significant Indication" shall mean, with respect to each Licensed Product, the use of the Licensed Product for the treatment, diagnosis or prevention of a specific disease or medical condition in humans where, with respect solely to such specific disease or medical condition, there is a valid technical rationale for use of Licensed Product in such indication and the peak sales of Licensed Product alone or as part of a Combination Product (using a Combination Product Amount-type adjustment), as evidenced by appropriate market research, are expected to be equal to or greater than *** per annum in the United States. *** APPROXIMATELY 8 LINES OMITTED *** 1.24 "Commercial Supplies" shall mean supplies of Licensed Product in suitable final packaged form, as specified under any manufacturing agreement between the Parties, manufactured in compliance with GMP, and ready to be offered for commercial sale for use in the Field in the Territory by Biogen and/or Elan, and/or their Affiliates, or permitted licensees or sublicensees. 1.25 "Control" shall mean the possession by a Party of the ability to grant access to, the right to use, or a license or sublicense, in each case as provided for in this Agreement, without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be required hereunder to grant the other CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 7 Party such access or license or sublicense. "Controlled" shall mean the past tense of Control. 1.26 "Co-Promotion" shall mean to Promote jointly a Licensed Product through Biogen, Elan, their Affiliates, and their respective sales forces, under a single trademark in the applicable country in the Territory. 1.27 "Cost of Goods Manufactured For Sale" shall have the meaning set forth in Exhibit B. 1.28 "Current Clinical Trials" shall mean the clinical trials underway as of the Effective Date, as more fully described in Schedule 1.28. 1.29 "Development" shall mean all activities performed by or on behalf of either Party pursuant to the Development Plan and each Annual Workplan/Budget with respect to a Licensed Product in the Field and in the Territory from March 1, 2000 until Regulatory Approval of a Licensed Product is obtained for the indication under study. "Development" shall include, without limitation, all activities related to preclinical testing, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, clinical studies, regulatory affairs, statistical analysis and report writing, market research and development and all other pre-approval activities, each to the extent performed pursuant to the Development Plan and an Annual Workplan/Budget. When used as a verb, "Develop" shall mean to engage in Development. 1.30 "Development Costs" shall have the meaning defined in Exhibit B. 1.31 "Development Plan" shall mean the comprehensive plan for (i) the Development of Antegren or, as applicable, any other Licensed Product, including, but not limited to activities designed to generate the preclinical, process development/manufacturing scale-up, clinical and regulatory information required for filing Drug Approval Applications in the Territory and (ii) the preparation and submission of Drug Approval Applications. An initial Development Plan is attached hereto as Exhibit C and incorporated herein, but may be modified pursuant to Section 4.2, and thereafter will be updated at least annually by the Joint Project Team, as approved by the JSC, as specified in Section 4.2. Subject to Section 4.7, the Development budget included as part of an Annual Workplan/Budget for a particular calendar year shall, within the limitations provided for in Section 4.6(d), constitute the maximum costs to be incurred thereunder during such calendar year for Development work, unless such budget is modified by the Joint Project Team, as approved by the JSC, in accordance with the terms of this Agreement. 1.32 "Distribution Costs" shall have the meaning defined in Exhibit B. 1.33 "Drug Approval Application" shall mean an application to a Regulatory Authority for Regulatory Approval of Licensed Product. 8 1.34 "Elan" shall mean Elan Pharma International Limited, an Irish private limited company, and those Affiliates which Elan Pharma International Limited designates to carry out its rights and obligations under this Agreement. 1.35 "Elan In-Licenses" shall mean the licenses listed on Schedule 1.35, each one an "Elan In-License". 1.36 "Elan Know-how" shall mean any and all Know-how which is within the Control of Elan or any of its Affiliates as of the Effective Date or during the Term of this Agreement, and (a) is useful for a Party to perform its tasks under this Agreement, the Development Plan, any associated Annual Workplan/Budget, the Commercialization Plan, any associated Annual Commercialization Plan/Budget or (b) is otherwise useful to Promote, market, use, Develop, Commercialize, manufacture, sell or import Licensed Products in the Field. 1.37 "Elan Patents" shall mean any and all Patents that are Controlled by Elan or any of its Affiliates as of the Effective Date or during the Term of this Agreement and (i) that claim Know-how that is necessary or useful to research, Develop, make, use or sell Licensed Products in the Field or (ii) that claim Licensed Product or any uses of Licensed Product in the Field or (iii) which otherwise would, but for this Agreement, be infringed by the Development, manufacturing and/or Commercialization activities of Biogen performed under this Agreement. The term "Elan Patents" shall also include Elan's interest in any Collaboration Invention Patent Rights and in any Patents owned jointly by the Parties as provided hereunder. "Elan Patents" known to be existing as of the date hereof are listed in Schedule 1.37. 1.38 "Elan Percentage" shall mean the percentage specified as the Elan Percentage under Section 6.1, as adjusted pursuant to Sections 4.7. The initial Elan Percentage shall be *** . 1.39 "Enhancing Third Party Intellectual Property" shall mean, in the Territory, on a country-by-country basis, a valid patent or patent application in such country owned or otherwise Controlled by a Third Party, that covers an invention, which if utilized by the Parties under this Agreement would facilitate the Development, manufacture or Commercialization of Antegren, or, as applicable, other Licensed Product and/or could materially enhance the commercial value of any Licensed Product. For purposes of clarity, Enhancing Third Party Intellectual Property shall not include Blocking Third Party Intellectual Property. 1.40 "Estimated Net Selling Price" as applicable to sales of Commercial Supplies by Biogen to Elan in any quarter shall mean an amount equal to total Net Sales for the preceding Calendar Quarter divided by the number of units of Licensed Product sold by Elan, its Affiliates and permitted sublicensees during such preceding Calendar Quarter, subject to adjustment, as determined by the JCT, to reflect any known trends CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 9 with respect to the Calendar Quarter for which the calculation is being made. If at the time Estimated Net Selling Price is being calculated, Licensed Product has not yet been launched or has not been on the market for a full quarter, the JCT shall determine Estimated Net Selling Price based on any total Net Sales and number of units sold data then available or, if none, a good faith estimate of anticipated total Net Sales and number of units forecasted to be sold for the quarter in which launch is anticipated. If the JCT determines to adjust the frequency of re-calculation of Transfer Price under Section 7.1(e) to other than a quarterly basis, the references to quarterly amounts in this definition shall be changed to reflect the period determined by the JCT to be used for the calculation of Transfer Price. 1.41 "Estimated Per Unit COGs" as applicable to sales of Commercial Supplies by Biogen to Elan in any quarter shall mean an amount equal to Biogen's Cost of Goods Manufactured For Sale for the number of units sold by Elan, its Affiliates and permitted sublicensees during the preceding Calendar Quarter divided by the number of units sold during such previous Calendar Quarter, subject to any adjustment, as determined by the JCT, to reflect any known trends with respect to the Calendar Quarter for which the calculation is being made. If at the time the Estimated Per Unit COGs calculation is being made, Licensed Product has not yet been launched or has not been on the market for a full quarter, the JCT shall determine Estimated Per Unit COGs based on any Cost of Goods Manufactured For Sale data then available. If the JCT determines to adjust the frequency of re-calculation of Transfer Price under Section 7.1(e) to other than a quarterly basis, the references to quarterly amounts in this definition shall be changed to reflect the period determined by the JCT to be used for the calculation of Transfer Price. 1.42 "Estimated Per Unit Distribution Costs" for a Party as applicable to sales of Commercial Supplies by Biogen to Elan in any quarter shall mean an amount equal to such Party's allocable Distribution Costs for the preceding Calendar Quarter divided by the number of units of Licensed Product sold by Elan, its Affiliates and permitted sublicensees during such preceding Calendar Quarter, subject to adjustment, as determined by the JCT, to reflect any known trends with respect to the Calendar Quarter for which the calculation is being made. If at the time the Estimated Per Unit Distribution Costs calculation is being made, Licensed Product has not yet been launched or has not been on the market for a full quarter, the JCT shall determine Estimated Per Unit Distribution Costs based on any Distribution Costs and number of units sold data then available or, if none, a good faith estimate of anticipated Distribution Costs and number of units forecasted to be sold for the calendar quarter in which launch is anticipated. If the JCT determines to adjust the frequency of re-calculation of Transfer Price under Section 7.1(e) to other than a quarterly basis, the references to quarterly amounts in this definition shall be changed to reflect the period determined by the JCT to be used for the calculation of Transfer Price. 1.43 "Estimated Selling Proceeds" shall mean the Estimated Net Selling Price less Elan's Estimated Per Unit Distribution Costs. 1.44 "EU" shall mean the European Union and its member nations as existing at the relevant point in time. 10 1.45 "FDA" shall mean the United States Food and Drug Administration and any successor agency. 1.46 "FD&C Act" shall mean the U.S. Food, Drug and Cosmetic Act, 21 C.F.R.ss.210 et seq. and the regulations promulgated thereunder, as the same may be amended from time to time. 1.47 "Field" shall mean the diagnosis, treatment or prevention of any medical or disease condition in humans, including, without limitation, multiple sclerosis or inflammatory bowel disease. 1.48 "First Commercial Sale" shall mean, in each country in the Territory, the first sale by Biogen, Elan, or their Affiliates or permitted sublicensees of a Licensed Product to a Third Party after the required Regulatory Approval to sell such Licensed Product in that country has been granted by the relevant Regulatory Authority. A Licensed Product sale shall be deemed to occur on the earlier of (a) the date the Licensed Product is shipped, or (b) the date of the invoice to the purchaser of the Licensed Product. 1.49 "FTE" shall mean a total of forty-seven (47) weeks or 1880 hours per year of work on the Development, manufacturing or Commercialization of a Licensed Product carried out by employees of a Party having the appropriate relevant expertise to conduct such activities. 1.50 "FTE Rate" shall mean the applicable rate per FTE to be applied by the Parties under this Agreement as set forth in Exhibit B. 1.51 "GCP" shall mean "Good Clinical Practice" or "GCP". Good Clinical Practice or GCP shall mean the then current standards for clinical trials for pharmaceuticals, as set forth in the FD&C Act and applicable regulations promulgated thereunder, as amended from time to time, and such standards of good clinical practice as are required by the Regulatory Authorities of the EU and other organizations and governmental agencies in countries in which the Licensed Products are intended to be sold, to the extent such standards are not less stringent than United States GCP, provided that a Party shall not be held to any standards of good clinical practice that are different than those standards required by the United States and the EU unless such standards have been specifically identified and approved for implementation by the Joint Project Team. 1.52 "GLP" shall mean the then current standards for laboratory activities for pharmaceuticals, as set forth in the FD&C Act and applicable regulations promulgated thereunder, as amended from time to time, and such standards of good laboratory practice as are required by the Regulatory Authorities of the EU. 1.53 "GMP" or "cGMP" shall mean the regulatory requirements for current good manufacturing practices promulgated by the FDA under the FD&C Act and under the Public Health Service Act, Biological Products, 21 C.F.R. ss.ss. 600-610 ("PHS Act"), and the regulations promulgated thereunder, as the same may be amended from time to time, and such standards of good manufacturing practice as are required by the 11 Regulatory Authorities of the EU and other organizations and governmental agencies in countries in which the Licensed Products are intended to be manufactured or sold, to the extent such standards are not less stringent than United States GMP, provided that a Party shall not be held to any standards required by countries outside the United States and EU unless such standards have been identified and approved for implementation by the Joint Project Team. 1.54 "Gross Sales" shall have the meaning defined in Exhibit B. 1.55 "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. 1.56 "HSR Clearance Date" shall mean the earliest date on which the Parties have actual notice that all applicable waiting periods under the HSR Act with respect to the transactions contemplated hereunder have expired or have been terminated. 1.57 "Invention" shall mean any discovery or other finding that directly relates to a Licensed Product, the Development of any Licensed Product, any method of making a Licensed Product or any method of using a Licensed Product or any uses of Licensed Product in the Field. 1.58 "Joint Commercialization Team" or "JCT" shall mean that body established pursuant to Section 3.3 below. 1.59 "Joint Patent Committee" or "JPC" shall mean that subcommittee of the Joint Project Team established pursuant to Section 3.4 below. 1.60 "Joint Project Team" or "JPT" shall mean that body established pursuant to Section 3.2 below. 1.61 "Joint Steering Committee" or "JSC" shall mean that committee established pursuant to Section 3.1 below. 1.62 "Know-how" shall mean all data, Inventions, methods, proprietary information, processes, trade secrets, techniques and technology of a Party (including Confidential Information as defined in Article 10 below), whether patentable or not but which are not generally known, which directly relate to Licensed Products or to the manufacture, testing or use of Licensed Product and are Controlled by such Party as of the Effective Date or hereafter during the Term of this Agreement, including, but not limited to, discoveries, formulae, materials, including biological materials, practices, methods, knowledge, know-how, processes, experience, test data (including pharmacological, toxicological and clinical information and test data), analytical and quality control data, marketing, pricing, distribution, cost and sales data or descriptions. "Know-how" may be made prior to the Effective Date or during the Term, solely by employees of Elan, solely by employees of Biogen, jointly by employees of Elan and Biogen, or by Elan or Biogen employees jointly with a Third Party. 12 1.63 "Licensed Product" shall mean any formulation (as determined from time to time in accordance with this Agreement) containing as an active constituent *** APPROXIMATELY 9 LINES OMITTED *** The term Licensed Product shall, as applicable, include Antegren. A Licensed Product approved for several different indications shall be considered a single Licensed Product. 1.64 "Licensed Product Promotional Materials" shall mean all Sales Representative training materials and all written, printed, graphic, electronic, audio or video matter related to the marketing or Promotion of a Licensed Product, including, but not limited to, journal advertisements, sales visual aids, direct mail, direct-to-consumer advertising, internet postings, broadcast advertisements, and sales reminder aids (e.g., scratch pads, pens and other such items) intended for use or used by a Party in connection with any Promotion. 1.65 "Lonza" shall mean Lonza Biologics plc. 1.66 "Major Market Country" shall mean any of the *** . 1.67 "Marketing Costs" shall have the meaning defined in Exhibit B. 1.68 "Net Sales" shall have the meaning defined in Exhibit B. 1.69 "Patent(s)" shall mean any and all patents, patent applications and any patents issuing therefrom, worldwide together with any extensions, registrations, confirmations, supplemental protection certificates and other like forms of patent term extensions, reissues, continuations, divisions, continuations-in-part, reexaminations, substitutions or renewals thereof. 1.70 "Patent Costs" shall have the meaning defined in Exhibit B. 1.71 "Percentage" as to Elan shall mean the Elan Percentage and as to Biogen shall mean the Biogen Percentage. 1.72 "Phase I Clinical Trial" shall mean studies in humans to obtain initial data regarding the safety of Licensed Product. 1.73 "Phase II Clinical Trial" shall mean studies in humans of the safety, dose range and efficacy of a Licensed Product which are conducted after Phase I Clinical Trial of such Licensed Product. 1.74 "Phase III Clinical Trial" shall mean one or more controlled studies in humans of the efficacy and safety of a Licensed Product, which is prospectively designed to demonstrate statistically whether the Licensed Product is safe and effective for use in a particular indication, in a manner intended to be sufficient to obtain CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 13 Regulatory Approval to market that Licensed Product and which the Joint Project Team designates as a Phase III Clinical Trial. 1.75 "Phase IV Clinical Trial" shall mean any clinical trial in an indication to be conducted after a Regulatory Approval in such indication which was mandated by the applicable Regulatory Authority as a condition of such Regulatory Approval. 1.76 "Post-Approval Clinical Trial" shall mean any clinical trial in an indication, other than a Phase III Clinical Trial or Phase IV Clinical Trial, to be conducted after a Regulatory Approval for such indication. 1.77 "Pre-Marketing Expenses" shall have the meaning defined in Exhibit B. 1.78 "Product Trademark" shall have the meaning set forth in Section 5.3(c). 1.79 "Promotion" shall mean those activities, including, without limitation, detailing normally undertaken by a pharmaceutical company's sales force to implement marketing plans and strategies aimed at encouraging the appropriate use of a particular Licensed Product in a specific indication. When used as a verb, "Promote" shall mean to engage in such activities. 1.80 "Regulatory Approval" shall mean any approvals (including pricing and reimbursement approvals), licenses, registrations or authorizations of any federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the marketing and sale of a Licensed Product in a regulatory jurisdiction. 1.81 "Regulatory Authority" shall mean any national (e.g., the FDA), supra-national (e.g., the European Commission, the Council of the European Union, or the European Agency for the Evaluation of Medicinal Products ("EMEA")), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity in any jurisdiction of the world involved in the granting of Regulatory Approval for Antegren or, as applicable, other Licensed Product. 1.82 Reimbursable Commercial Costs" shall mean Premarketing Expenses, Marketing Costs, Sales Costs, Other Out-of-Pocket Costs and Ongoing Development Expense. 1.83 "Royalty-Bearing Sales" shall mean, with respect to a License Agreement (as defined in Section 14.2(d)), the gross amounts charged for sales of Licensed Products by a Party, its Affiliates (which, solely for purposes of this definition and Section 14.3 and any License Agreement, shall, notwithstanding the proviso in the definition of Affiliates under Section 1.1, include any subsidiaries or other entities in which the Party or its Affiliates owns a majority of the ordinary voting power necessary to elect a majority of the board of directors or other governing board, whether or not such Party or Affiliate is restricted from electing such majority by contract or otherwise) 14 and/or its sublicensees, as appropriate, to Third Parties, less the sum of (a) and (b) where (a) is a provision for (i) reasonable trade, cash and quantity discounts (other than price discounts granted at time of invoice and which are already reflected in the determination of the amount charged), (ii) credits or allowances actually given or made for rejection or return of, previously sold products or for rebates or retroactive price reductions (including Medicaid, Medicare, government, commercial and similar types of rebates), (iii) taxes, duties or other governmental charges levied on or measured by the billing amount (excluding income and franchise taxes), as adjusted for rebates and refunds, (iv) charges actually incurred for freight and insurance directly related to the distribution of the Licensed Product (excluding amounts reimbursed by Third Party customers), (v) reasonable credits or allowances actually given or made for wastage replacement and (vi) reasonable allowances for bad debt; and (b) is a periodic adjustment of the provision determined in (a) to reflect amounts actually incurred for (i), (ii), (iii), (iv), (v) and (vi). Royalty-Bearing Sales for Combination Products shall be based on the Combination Product Amount. A "sale" of a Licensed Product is deemed to occur upon the earlier to occur of the date the Licensed Product is shipped or the date of the invoice to the purchaser of the Licensed Product. 1.84 "Sales Costs" shall have the meaning set forth in Exhibit B. 1.85 "Sales Representative" shall mean an employee of either Party or its Affiliates or permitted sublicensees or, as applicable, employee of a contract sales organization: (a) who is responsible for contacting customers and others who can buy or influence the buying decision with respect to the applicable Licensed Product in the applicable country in the Territory, and (b) whose success at such activities is a significant factor in the ongoing employment of the individual. 1.86 "Sample" shall mean a unit of a Licensed Product that is not intended to be sold and is intended to promote the sale of such Licensed Product. When used as a verb, "Sample" shall mean to provide Samples to health care providers. 1.87 "Territory" shall mean every country, territory, possession or other political subdivision of the world. 1.88 "Third Party" shall mean any entity other than Elan or Biogen or their Affiliates. 1.89 "Third Party License" shall mean any agreement with a Third Party for a license under Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property entered into by a Party during the Term of this Agreement pursuant to Sections 8.3 or 11.9. 1.90 "Third Party License Fees" shall mean license fees, royalties and other amounts paid to any Third Party under a Third Party License or an Elan In-License after the Effective Date. 15 1.91 "Transfer Price" *** . 1.92 "United States" or "U.S." shall mean the United States of America, its territories and possessions, and the Commonwealth of Puerto Rico. 1.93 Additional Definitions. Each of the following definitions are found in the body of this Agreement as indicated:

Section ------- "ACQUIRED PARTY" 14.7(a) "AMA" 5.4(e) "AMA GUIDELINES" 5.4(e) "ANNUAL COMMERCIALIZATION PLAN/BUDGET" 5.1(c) "CLINICAL MANUFACTURING AGREEMENT" 7.1(c) "CLINICAL RESUPPLY CAMPAIGN" Exhibit C "COLLABORATION AGREEMENT" 4.8 "COMMERCIAL MANUFACTURING AND SUPPLY AGREEMENT" 7.1(e) "COMMERCIALIZATION PLAN" 5.1(c) "COMMERCIALIZATION TEAM LEADER" 3.3 "CONFIDENTIAL INFORMATION" 10.1 "CONTRACT SALES ORGANIZATION" OR "CSO" 5.1(d) "COST OF CAPITAL CHARGE" Exhibit B "DESIGNATED PARTY" 5.1(b) "DEVELOPMENT COST PROJECT ACCOUNT" 4.6(b) "DISTRIBUTION ACTIVITIES" 5.6 "DISTRIBUTING PARTY" 5.6 "DIVESTED ASSETS" 14.8 "DIVESTING PARTY" 14.8 "EXCLUDED INDICATION" 4.7(a) "FUNCTIONAL CURRENCY" Exhibit B "INCLUDED INITIAL PERIOD COSTS" 4.6(c) "INITIAL PERIOD" 4.6(c) "LICENSE AGREEMENT" 14.2(d) "LICENSING PARTY" 14.2(d) "LOSSES" 15.1(a) "MATERIAL TRANSFER AGREEMENT" 4.8 "NOMINATED PRICE" 14.7(b) "NON-ACQUIRED PARTY" 14.7(a) "ONGOING DEVELOPMENT EXPENSES" Exhibit B "OTHER OUT-OF-POCKET COSTS" Exhibit B "OUTSIDE THE SCOPE INVENTIONS 11.1(b) "PHRMA" 5.4(e) "PHRMA CODE" 5.4(e)

CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 16

Section ------- "PROJECT TEAM LEADER" 3.2 "RECONCILIATION STATEMENT" Exhibit B "SALES RETURNS AND ALLOWANCES" Exhibit B "SPLIT ADJUSTMENT OR SPLIT ADJUSTED BASIS" 14.1(b)(i) "TERM" 14.1(a) "THIRD PARTY RESEARCH AGREEMENTS" 4.8 "VALUATION" 14.7(c) "VALUATION PRICE" 14.7(c)

ARTICLE 2. SCOPE OF THE COLLABORATION 2.1 Collaboration Goals. Pursuant and subject to the terms of this Agreement, within the Field and the Territory, the Parties agree to: (a) engage in Development activities with the goal of obtaining Regulatory Approval for Antegren or, as applicable, other Licensed Product, as soon as reasonably practicable, in one or more Commercially Significant Indications in each Major Market Country where it makes commercial sense to do so given the size of the potential market and the safety and efficacy profile of Licensed Product and (b) engage in Commercialization of Antegren, or, as applicable, other Licensed Product, with the goal of optimizing the profit available to each Party. For purposes of clarity, it is understood by the Parties that the JCT may decide that it does not make commercial sense for the Parties to Develop or Commercialize Licensed Product in a particular Major Market Country in a given indication. Each Party agrees to use Commercially Reasonable and Diligent Efforts in performing its tasks and responsibilities and in conducting all activities ascribed or assigned to it under this Agreement, the then current Development Plan, any Annual Work Plan/Budget, the then current Commercialization Plan and any Annual Commercialization Plan/Budget. Each Party shall cooperate with and provide reasonable support to the other Party in performing its activities with respect to the Development and Commercialization work contemplated hereunder. Each Party agrees, during the Term, to Develop, manufacture, Commercialize and Promote Licensed Products only under the terms of this Agreement. The Parties' intent is to Develop, Commercialize, manufacture and Promote Antegren or, as applicable, other Licensed Product, as expeditiously as reasonably practicable with the resources and responsibilities allocated between the Parties on the basis of each Party's respective capabilities and availability of adequate capacities, either internally or through such subcontractors as are customarily used by a Party. Unless otherwise specified in this Agreement, the guiding principles to be followed by the JSC, the Joint Project Team and the JCT are as follows: achieve synergy and avoid duplication of resources; maximize the profitability of Antegren or, as applicable, other Licensed Product, over its life; and utilize, to the extent practicable, the then-prevailing infrastructure and expertise of each Party with respect to specific Development activities and any specific indication and utilize, on a country-by-country basis, to the extent practicable, the then-prevailing commercial infrastructure, expertise and track record of each Party in promoting sales of disease modifying agents in the applicable disease area and for other Commercialization activities. The Parties shall 17 apply a standard of reasonableness and fairness to each Party and, subject to the specific terms of this Agreement, shall strive to balance the legitimate interests and concerns of both Parties, with the goal of realizing the economic potential of Licensed Product and allowing both Parties to benefit from the realization of such potential and share in the profitability of Licensed Product. 2.2 Exclusive Relationship. Except as expressly set forth in this Agreement, it is understood and agreed by the Parties that, during the Term, the Parties shall work exclusively with each other to research, Develop, manufacture and Commercialize Licensed Products in the Field solely in accordance with the terms of this Agreement. During the Term of this Agreement, for so long as Antegren or, as applicable, other Licensed Product, is being researched, Developed, manufactured and/or Commercialized under this Agreement, neither Party shall, alone or in collaboration with or through the grant of any rights to any Third Party, research, Develop, make, import, export, distribute, offer for sale, or otherwise Commercialize or Develop Antegren or, as applicable, other Licensed Product, for use as a therapeutic, diagnostic or prophylactic, except as otherwise permitted under this Agreement. Notwithstanding anything in this Agreement to the contrary, either Party shall be free to work alone or with Third Parties to research, develop, manufacture and/or commercialize any product that is not a Licensed Product in or outside the Field, including any composition of matter, therapeutic approach or means of treatment based upon inhibition of Alpha-4 Integrin which is not a Licensed Product. Prior to entering into a collaboration with a Third Party after the date hereof to research, develop, manufacture and/or commercialize any composition of matter, therapeutic approach or means of treatment based upon inhibition of Alpha-4 Integrin with a protein product which is not a Licensed Product, Elan shall first offer to Biogen the opportunity to include such composition of matter, therapeutic approach or means of treatment in the mutual and exclusive collaboration set forth in this Agreement. ARTICLE 3. MANAGEMENT OF THE COLLABORATION 3.1 Joint Steering Committee. (a) Establishment of Joint Steering Committee. Within thirty (30) days of the Effective Date, the Parties will establish a Joint Steering Committee, or JSC, to oversee and manage the Development and Commercialization activities contemplated by this Agreement and to be implemented by the Joint Project Team and Joint Commercialization Team. The JSC will be composed of three (3) representatives of each Party who shall be appointed (and may be replaced at any time) by such Party on written notice to the other Party in accordance with this Agreement. At least two (2) of such representatives from Elan and Biogen, respectively, shall be a vice-president or more senior officer of such Party and at least one (1) other of such representatives shall be an individual of suitable authority and seniority who has significant experience or expertise in biopharmaceutical drug research, development, commercialization or marketing. Any member of the JSC may designate a substitute of equal experience and seniority to attend and perform the functions of that member at any meeting of the JSC. 18 The JSC will meet at least four times each year during the Term of this Agreement, or at any other frequency agreed by the JSC. (b) Joint Steering Committee Responsibilities. In addition to its general responsibilities to oversee and coordinate the Development of Licensed Products according to the Development Plan and each Annual Workplan/Budget, to oversee and coordinate the Commercialization of Licensed Products in the Territory according to the Commercialization Plan and each Annual Commercialization Plan/Budget and to ensure a regular flow of information between the Parties, the JSC shall, subject to the terms of this Agreement: (I) direct the overall strategy, timing, goals and direction of the Development activities specified hereunder and provide direction to the Joint Project Team as provided herein; (II) review and approve global regulatory and clinical strategies; (III) approve the Development Plan and each Annual Workplan/Budget, including the division of responsibilities of each Party, and the annual budgets and multiyear expense forecasts formulated by the Joint Project Team and any material modifications or material amendments to or substantial departures from any of the foregoing; (IV) review and approve activities related to manufacturing and/or the supply of Clinical Supplies or Commercial Supplies, other than activities related specifically to Biogen's day-to-day manufacturing operations or to Biogen's facilities; (V) determine whether completion of a certain activity has, or has not, met the criteria for payment of milestones hereunder; (VI) determine whether or not the Parties should undertake to Develop a Licensed Product other than Antegren and whether or not the Parties should proceed with or continue Development in a particular indication, subject to Section 4.7; (VII) serve as the first forum for attempted settlement of disputes or disagreements that are unresolved by the Joint Project Team or Joint Commercialization Team and any subteams or subcommittees of such committee or of the JSC, unless otherwise indicated in this Agreement; (VIII) subject to Article 5, approve a Commercialization Plan and each Annual Commercialization Plan/Budget, including but not limited to the allocation of responsibilities between the Parties, or as applicable, one or more Third Parties, in each country covered thereunder, annual marketing and sales budgets, the price range, managed care contract strategies, and Phase IV clinical support (including scope and strategic direction) as well as any material 19 modifications or material amendments to or any substantial departures from any of the foregoing; (IX) review estimates of sales and expenses on a country by country and Licensed Product by Licensed Product basis; (X) review and approve the determinations of the Joint Project Team with respect to the calculations of the presence or absence of a Commercially Significant Indication; (XI) review and approve patent strategy and, to the extent applicable, litigation strategy; and (XII) perform such other functions as are allocated to it under the other provisions of this Agreement or as appropriate to further the purposes of this Agreement as determined by the Parties. (c) Joint Steering Committee Chairpersons; Procedures; Decisions. The JSC shall have a single Chairperson with customary duties and a Secretary who is not a member of the JSC. The Secretary shall send notices and the agendas for all regular JSC meetings. Elan shall designate the initial Chairperson and Biogen shall designate the initial Secretary. The following year, Biogen shall designate the Chairperson and Elan shall designate the Secretary, and thereafter the Parties shall alternate with one Party designating the Chairperson for a year and the other Party appointing the Secretary for that year. With respect to the approval or ratification of the decisions or recommendations of the Joint Project Team or the JCT or approval of the Development Plan, the Commercialization Plan, each Annual Workplan/Budget and each Annual Commercialization Plan/Budget or any amendments or modifications thereto, unless at least one representative of the JSC requests that the matter be placed to a vote, all such decisions or recommendations presented to the JSC shall be considered approved or ratified as presented if no objection is made by any member of the JSC at that time, provided that it is clear to the members of the JSC that the action being sought from the JSC is approval or ratification. The location of regularly scheduled JSC meetings shall alternate between the offices of the Parties (which in the case of Elan shall mean its offices in South San Francisco), unless otherwise agreed. Meetings may be held telephonically and shall be effective only if at least one (1) representative of each Party is in attendance or participating in the meeting. Decisions of the JSC shall be made by unanimous vote. The senior most attending or participating representative of each Party on the JSC shall have the right to vote on behalf of any members of the JSC from such Party not attending or participating in the meeting. The Secretary shall attend all meetings and record in the minutes in sufficient detail the discussion and decisions of the JSC. Such minutes shall be circulated to the Parties promptly following the meeting for review, comment and distribution. (d) Authority. The Parties agree that, in voting on matters as described in this Article 3, it shall be conclusively presumed that each voting member of the JSC has the authority and approval of such member's respective senior management 20 in casting his or her vote and that decisions of the JSC made in accordance with this Article 3 shall be binding upon each of the Parties; provided, however, that the JSC shall not have the authority to amend or modify this Agreement. (e) JSC Reports. Before each meeting of the JSC, either the Parties, the JPT or the JCT, or any subcommittee, as applicable, will provide the members of the JSC with written copies of all materials they intend to present at the JSC meeting. The JSC may also request at any time specific data or information related to Development or Commercialization activities or that a written report be prepared in advance of any meeting summarizing certain material data and information arising out of the conduct of the Development or Commercial activities and the Party or appropriate committee or team to whom such request is made shall promptly provide to the other Party or JSC such report, data or information. (f) Appointment of Subteams or Subcommittees. The JSC shall be empowered to create such subteams or subcommittees of itself as it may deem appropriate or necessary. Each such subteam or subcommittee shall report to the JSC, who shall have authority to approve or reject recommendations or actions proposed thereby subject to the terms of this Agreement. (g) Dispute Resolution. Issues coming before the JSC that require action, approval or resolution and for which the JSC is unable to reach agreement on a mutually acceptable action, approval or resolution shall be resolved by the Parties under the terms of Article 16 below. 3.2 Joint Project Team. (a) Establishment of Joint Project Team. Within thirty (30) days of the Effective Date, the Parties will establish a single Joint Project Team to coordinate and implement all activities with respect to the Development of Licensed Products in the Field and in the Territory, including, without limitation, the Development of Antegren, within the budgets approved under each associated Annual Workplan/Budget, including pre-clinical research, clinical research, manufacturing, the strategy for and content of Drug Approval Applications, and post-approval studies. The Joint Project Team shall consist of such number of representatives of each Party as are reasonably necessary to accomplish the goals of the Joint Project Team hereunder. Where possible, the Joint Project Team shall be composed of an equal number of representatives from each Party. Such representatives will include individuals with expertise and responsibilities in the areas of activity testing, toxicology, preclinical development, clinical development, process sciences, manufacturing, regulatory affairs, drug safety, product development, quality, marketing and intellectual property, as appropriate to the stage of Development of Antegren or, as applicable, other Licensed Products. One such representative from each Party shall be designated as that Party's "Project Team Leader" to act as the primary Joint Project Team contact for that Party. Together, the Project Team Leaders will be jointly responsible for managing the Joint Project Team. Each Project Team Leader will be responsible for ensuring that his/her Party's Joint Project Team members carry out the activities assigned them under the Development Plan and each Annual Workplan/Budget. 21 Either Party may replace any or all of its representatives at any time upon written notice to the other Party. Any member of the Joint Project Team may designate a substitute to attend and perform the functions of that member at any meeting of the Joint Project Team. The Joint Project Team shall be empowered to create such subteams or subcommittees as it may deem appropriate or necessary. Each such subteam or subcommittee, including the Joint Patent Committee, subject to Section 3.4, shall report to the Joint Project Team, which shall have authority to approve or reject recommendations or actions proposed thereby, subject to the terms of this Agreement. The Joint Project Team will meet, telephonically or otherwise, at least once each month, or more frequently, as agreed by the Joint Project Team. (b) Joint Project Team Responsibilities. The Joint Project Team shall be responsible, with the oversight and approval of the JSC, for formulating and executing the specific details of the Parties' Development collaboration, including, without limitation, preparing for and executing the Development activities contemplated hereunder. The Joint Project Team shall prepare the Development Plan and each associated Annual Work Plan/Budget in accordance with Section 4.2. Except as set forth in Section 4.7, the Joint Project Team shall also have the responsibility of selecting the criteria for Development of Antegren or, as applicable, other Licensed Product; making decisions regarding the design and implementation of all research programs; selecting and designing clinical trials for all proposed indications; developing a publication and scientific symposia strategy and a calendar of key scientific and clinical meetings; conducting market research and development activities prior to formation of Joint Commercialization Team; devising the content of and filing strategy for all Clinical Trial Applications and Drug Approval Applications; through the representatives on the Joint Project Team with regulatory expertise, coordinating interactions with Regulatory Authorities and, along with the Joint Commercialization Team, developing and implementing standard operating procedures for adverse event reporting and compliance with other regulatory requirements in the Territory, consistent with Article 13; through the Joint Patent Committee, coordinating patent and trademark-related activities, subject to Section 3.4; and implementing other activities necessary to the successful completion of the collaboration and for exchanging information and facilitating cooperation and coordination between the Parties as they exercise their respective rights and meet their respective obligations under this Agreement. In addition to such other reports as required by the JSC, the Joint Project Team shall submit to the JSC its written determinations of all Commercially Significant Indications for Antegren or, as applicable, other Licensed Product, as such determinations are made, and a determination of its recommendations as to the priority among such indications and the priority among the countries within the Territory in which the Joint Project Team expects to seek Regulatory Approval of Antegren, or, as required, other Licensed Product. The Joint Project Team will be responsible for all other activities assigned to it by the JSC. (c) Joint Project Team Decision-making. Decisions of the Joint Project Team shall be made by unanimous vote of the Project Team Leaders. If the Joint Project Team is unable to resolve a dispute regarding any issue, such dispute shall be resolved in accordance with Article 16. 22 (d) Ceasing of Joint Project Team Operations. The Joint Project Team will cease operations and have no further function hereunder on the date on which the Parties are no longer engaging in Development of any Licensed Product(s) in the Territory. (e) Annual Production Requirements. The Joint Project Team shall be responsible for submitting annual Antegren or, as applicable, other Licensed Product, production requirement reports as part of each Annual Workplan/Budget. Such report shall include a non-binding forecast of requirements for Clinical Supplies and placebo for the Territory for the then current year and the following two (2) years, and any other related information which the Joint Project Team determines to include. (f) Accounting/Financial Reporting. Each Party will appoint a representative with expertise in the areas of accounting, cost allocation, budgeting and financial reporting to the Joint Project Team. Such representatives shall provide services to and consult with the Joint Project Team in order to address the financial, budgetary and accounting issues which arise in connection with the Development Plan, each Annual Workplan/Budget and the Financial Planning, Accounting and Reporting Procedures attached hereto as Exhibit B, and updates thereto. Each representative may designate a substitute to perform such functions, or may be replaced at any time by the represented Party by providing notice thereof to the other Party. 3.3 Joint Commercialization Team. (A) FORMATION OF THE JCT. At the earlier of either one (1) year prior to the expected first commercial sale or Antegren or, as applicable, other Licensed Product or ninety (90) days after the start of any Phase III Clinical Trial for Antegren or, as applicable, other Licensed Product, a Joint Commercialization Team, or JCT, will be formed, comprised of an equal number of representatives of each Party, the total number of which will be between three (3) and five (5). Each member of the JCT will be an individual with experience in the commercialization and marketing of pharmaceutical products. The Project Team Leader of the Joint Project Team for each Party may also be one of the representatives for such Party on the JCT. One representative from each Party on the JCT shall be designated as that Party's "Commercialization Team Leader" to act as the primary JCT contact for that Party. Together, the Commercialization Team Leaders will be jointly responsible for managing the JCT. Each Commercialization Team Leader will be responsible for insuring that his/her Party's JCT members carry out the activities assigned them under the Commercialization Plan and each Annual Commercialization Plan/Budget. Either Party may replace any or all of its representatives on the JCT at any time upon written notice to the other Party. Any member of the JCT may designate a substitute to attend and perform the functions of that member at any meeting of the JCT. The JCT will meet, telephonically or otherwise, at least once each month, or more frequently, as agreed by the JCT. (b) Responsibilities of JCT. The JCT shall, during the Development of Antegren or, as applicable, other Licensed Product, coordinate with the Joint Project Team those activities deemed necessary for a successful Commercialization 23 of Licensed Product in the Territory upon Regulatory Approval. The JCT shall be responsible for preparing the Commercialization Plan and each Annual Commercialization Plan/Budget in accordance with Section 5.1, for overseeing and implementing the activities contemplated thereunder and under Article 5 and for coordinating with the Joint Project Team in developing and implementing standard operating procedures for adverse event reporting and compliance with regulatory requirements in the Territory, consistent with Article 13. (c) JCT Decision-making. Decisions of the Joint Commercialization Team shall be made by unanimous vote of the Commercialization Team Leaders. If the Joint Commercialization Team is unable to resolve a dispute regarding any issue, such dispute shall be resolved in accordance with Article 16. (d) Annual Production Requirements. The Joint Commercialization Team shall be responsible for submitting annual Antegren or, as applicable, other Licensed Product, commercial production requirement reports as part of each Annual Commercialization Plan/Budget. Such report shall include a non-binding forecast of requirements for Commercial Supplies for the Territory for the then current year and the following two (2) years, and any other related information which the JCT determines to include. (e) Accounting/Financial Reporting. Each Party will appoint a representative with expertise in the areas of accounting, cost allocation, budgeting and financial reporting to the Joint Commercialization Team. Such representatives shall provide services to and consult with the Joint Commercialization Team in order to address the financial, budgetary and accounting issues which arise in connection with the Commercialization Plan, each Annual Commercialization Plan/Budget and the Financial Planning, Accounting and Reporting Procedures attached hereto as Exhibit B, and updates thereto. Each representative may designate a substitute to perform such functions, or may be replaced at any time by the represented Party by providing notice thereof to the other Party. 3.4 Joint Patent Committee. Within thirty (30) days after the Effective Date, Biogen and Elan shall establish a "Joint Patent Committee" or "JPC", as a subcommittee of the Joint Project Team, to oversee and direct the continued prosecution of Elan Patents and Biogen Patents and the preparation and filing of Collaboration Invention Patent Rights, subject to the terms of Article 11. The JPC shall be comprised of one (1) senior patent attorney from each Party as appointed by such Party. A Party may replace its representative from time to time upon written notice to the other Party. The JPC shall exist until the termination of this Agreement, provided that at such time as the Joint Project Team no longer exists, the JPC shall become a subcommittee of the Joint Commercialization Team. All decisions of the JPC shall be unanimous, and in the event that a decision cannot be reached by the JPC, the matter shall be referred to the Joint Project Team. In the event that the Joint Project Team is unable to reach a decision with respect to any such matter, then such matter shall be resolved in accordance with Article 16. 24 3.5 Meetings of Chief Executive Officers. The Chief Executive Officers (CEOs) of Biogen and Elan Corporation, plc, or their designated direct-reporting representative, shall meet two (2) times per year during the term of this Agreement, unless otherwise agreed upon in writing by the Parties. In such meetings, the CEOs shall review the progress of the collaboration and shall discuss any current issues of the collaboration with the intent of proposing resolutions for such issues. Meetings, including without limitation, special meetings called pursuant to Section 16.1 shall alternate between the offices of the Parties, unless otherwise agreed by the CEOs or their respective representatives, or may be held telephonically or by videoconference. ARTICLE 4. DEVELOPMENT 4.1 Development Efforts. Through the Joint Project Team, Elan and Biogen each agree to collaborate exclusively and diligently with each other in the Development of Antegren or, as applicable, other Licensed Products in the Field and to use Commercially Reasonable and Diligent Efforts to Develop and bring Antegren or, as applicable, other Licensed Product, to market in the Field in Commercially Significant Indications as deemed appropriate by the Joint Project Team. The Parties agree to cooperate with each other in carrying out the Development Plan and each Annual Workplan/Budget. Development activities will, to the extent practicable, utilize the then-prevailing development infrastructure and expertise of each Party in a given activity or with respect to a specific Commercially Significant Indication. All activities to be undertaken in the performance of the Development Plan and each Annual Workplan/Budget shall be carried out by employees of the Parties and/or their respective Affiliates, provided, however, that if either Party is able to reasonably demonstrate, and the Joint Project Team agrees, that it would be in the best interests of both Parties for the responsible Party to contract with one (1) or more Third Parties to perform certain tasks under the Development Plan, then, the Party responsible for such task may enter into a contract with a Third Party to perform such task, which such Third Party and contract shall be subject to the prior written approval of the Joint Project Team. In determining whether to utilize the services of any Third Party in conducting activities under the Development Plan, the Parties shall consider, inter alia, what would be the most efficient and cost-effective means for accomplishing the proposed activity, any relevant intellectual property issues that may impede a Third Party's ability to perform the proposed activity or that may warrant limiting the performance of the proposed activity to one of the Parties, and other relevant factors. The responsibility for performing clinical studies will be assigned to Biogen, Elan and/or approved Third Party contractors selected by the Joint Project Team in accordance with this Section 4.1. 4.2 Development Plan and Responsibilities (a) Initial Development Plan. The Parties have attached as part of Exhibit C hereto an initial Development Plan, the goals of which are: (i) the Development (including further clinical testing) of Antegren as required to obtain Regulatory Approval for one or more Commercially Significant Indications in each Major Market Country (other than Japan which shall be addressed in subsequent updates) 25 as promptly as commercially and technically practicable, or as otherwise deemed appropriate by the Joint Project Team; (ii) the acquisition of Regulatory Approval for Antegren in a manner sufficient to allow the commercial promotion, marketing and sale of Antegren in those countries of the Territory where it makes commercial sense to do so given the size of the potential market and other relevant factors; (iii) the identification, selection and Development of additional Licensed Products if appropriate and (iv) the formation and transfer to Biogen of the information and capabilities necessary to manufacture and supply Clinical Supplies and Commercial Supplies of Antegren, or, as applicable, other Licensed Product, for such Development and Commercialization, including, but not limited to, the initial transfer of manufacturing Know-how by Elan and Lonza to Biogen in accordance with Section 7.1 and the timeline for such transfer set forth in the Development Plan. (b) Initial Annual Workplan/Budget. The Joint Project Team shall, within sixty (60) days of the execution date, prepare a draft of an Annual Workplan/Budget for 2000, specifying in detail the Development activities to be performed during the year, designation of which Party is responsible for each task, staffing levels (which levels shall be reasonably necessary for the attainment of the Development goals, as applicable), any approved use of Third Party contractors required to carry out such activities, a budget setting forth the estimated expenditures required to carry out such activities and a timeline for completion of such activities. Should the Joint Project Team determine that a specific activity would be best undertaken by a Third Party contractor, the Joint Project Team shall indicate which Party shall manage such Third Party contractor. The final Annual Workplan/Budget for 2000 shall be approved by the JSC by the end of August 2000. (c) Yearly Updates and Subsequent Annual Workplans/Budget. The Joint Project Team shall, on an annual basis, update the Development Plan to reflect any changes necessary given the progress and the results of the Development work as of such date or any change in strategy, timelines, or long range plans going forward. In addition, prior to the start of each year, the Joint Project Team shall prepare an Annual Workplan/Budget which shall specify in detail the Development activities to be performed during such year, designation of which Party is responsible for each task, staffing levels (which levels shall be reasonably necessary for the attainment of the Development goals, as applicable), any approved use of Third Party contractors required to carry out such activities, a budget setting forth the estimated expenditures required to carry out such activities, a timeline for completion of such activities and annual production requirements, as specified in Section 3.2(e). Should the Joint Project Team determine that a specific activity would best be undertaken by a Third Party contractor, the Joint Project Team shall indicate which Party shall manage such Third Party contractor. Each update to the Development Plan and adoption of each Annual Workplan/Budget under this paragraph and any modifications and updates under paragraph (d) below shall automatically be deemed to constitute an amendment to Exhibit C upon JSC approval and ratification of the meeting minutes related thereto, and shall not constitute an obligation of either Party until such approval and ratification. The schedule for yearly updates to the Development Plan and the drafting and approval of each Annual Workplan/Budget commencing with the Year 2001, is as follows: 26

EVENT TIMING ----- ------ Yearly Development Plan update by the Joint May 15 Project Team Draft of Annual Workplan/Budget for each September 15 of prior year year together with any necessary updates to the Development Plan prepared by Joint Project Team Approval of Development Plan update and Meeting of JSC next following Annual Workplan/Budget by JSC date when the plans are available

(d) Interim and Annual Workplan/Budget Modifications and Updates. The Joint Project Team shall review each Annual Workplan/Budget on a quarterly basis during the course of each year to review actual activities and expenditures compared to plan and to determine if any changes are necessary given the progress and the results of the Development work as of such date. Other interim modifications to each Annual Workplan/Budget during the course of the year may also be adopted by the Joint Project Team, as necessary, but shall be subject to the approval of the JSC if material. All changes to any Annual Workplan/Budget shall be subject to review and approval of the JSC where such modifications exceed the authority delegated to the Joint Project Team by the JSC or under this Agreement. (e) Responsibilities. Consistent with its responsibilities under this Agreement, the Development Plan and each Annual Workplan/Budget, each Party agrees to use Commercially Reasonable and Diligent Efforts to: (I) transfer to the other Party all Know-how in such Party's possession that the Joint Project Team deems useful for the Development of Antegren or, as applicable, other Licensed Products, including but not limited to preclinical data, assays and associated materials, protocols and procedures, provided that, notwithstanding anything in this Agreement to the contrary, the initial transfer of Know-how from Elan to Biogen shall include, but shall not be limited to, all manufacturing Know-how, as specified in Section 7.1, reasonable quantities of Antegren for research, Development and manufacturing scale-up work, all existing preclinical data, regulatory filings, and all existing clinical trial protocols and data, to the extent such Know-how is not already in Biogen's possession; (II) in accordance with the Development Plan and any associated Annual Workplan/Budget, conduct or, as applicable, assist the other Party to conduct, all relevant studies, including human clinical studies for Antegren or, as applicable, other Licensed Products; and (III) in accordance with the Development Plan and any associated Annual Workplan/Budget and Section 4.4, make or, as applicable, assist the other Party in making, all filings with and supporting all communications with the 27 relevant regulatory agencies or other governmental entities necessary to conduct such studies or to seek Regulatory Approvals for Antegren, or as required, other Licensed Products. 4.3 Clinical Trials. The Parties will conduct clinical trials for Licensed Products in accordance with the Development Plan and each Annual Workplan/Budget. Except to the extent otherwise required by relevant regulatory agencies or other governmental entities, there shall be one Clinical Trial Application in each country for all clinical trials for each distinct Licensed Product. All clinical data and reports related to clinical trials for Licensed Products shall be jointly owned by the Parties, and each Party shall have full use, for any purpose consistent with this Agreement, of all such data and reports related to clinical trials for Licensed Products. All data, database information and reports from such clinical trials for Licensed Products shall be centralized and held at a location to be chosen by the Joint Project Team, with a duplicate set available to each Party for deposit at a site of its own selection. 4.4 Clinical Trial Applications, Drug Approval Applications, Package Labels and Inserts. (a) The Joint Project Team shall determine which Party shall be responsible for filing all Clinical Trial Applications. Notwithstanding the foregoing, Elan shall continue to hold the existing INDs with respect to Antegren, provided that, within twelve (12) months after the Effective Date the Joint Project Team shall reconsider the assignment of responsibility for the existing INDs based on the allocation of related clinical responsibilities. Unless the JSC determines that it would be more efficient for one Party to file and hold Drug Approval Applications and Regulatory Approvals worldwide, Elan shall, with the oversight of the Joint Project Team, be responsible for filing Drug Approval Applications and seeking Regulatory Approvals for Licensed Products worldwide except in North America and Japan, and Biogen shall, with the oversight of the Joint Project Team, be responsible for filing Drug Approval Applications and seeking Regulatory Approvals in North America. The JSC shall allocate responsibility for filing and holding Drug Approval Applications and Regulatory Approvals for Licensed Product in Japan, provided that such filing shall be subject to the oversight of the Joint Project Team. Notwithstanding the foregoing, in the event that the Joint Project Team determines to cease development of Licensed Product in IBD but continues development in MS, Elan shall assume responsibility for filing Drug Approval Applications and seeking Regulatory Approvals for Licensed Product worldwide, subject to the oversight of the Joint Project Team. The Party responsible for filing a Clinical Trial Application or Drug Approval Application in a given jurisdiction (the "Filing Party") shall also comply with all regulatory obligations in such jurisdiction arising from any of the foregoing, subject to the terms of this Agreement. The Filing Party shall use Commercially Reasonable and Diligent Efforts in performing the activities contemplated under this Agreement, and shall perform such activities with the oversight of the Joint Project Team and in accordance with the Development Plan and each Annual Workplan/Budget. Prior to submitting any Clinical Trial Application or Drug Approval Application, the Parties, through the Joint Project Team, shall consult and cooperate in preparing such filings, their content and scope. Each Party shall have the right to review 28 and comment on all Clinical Trial Applications and Drug Approval Applications in accordance with specific timelines or other arrangements agreed upon by the Joint Project Team, and no such filing shall be made unless the Joint Project Team has approved the form and content of the filing. Unless otherwise required by relevant Regulatory Authorities, all regulatory documents shall be centralized and held at a location to be chosen by the Joint Project Team, with a duplicate set provided to each Party for deposit at a site of its own selection. Unless otherwise specified by the Joint Project Team and subject to the terms of this Agreement, the Filing Party shall own all regulatory submissions, including all Clinical Trial Applications, Drug Approval Applications and associated government licenses, approvals, and certificates for Licensed Products in the Territory. Notwithstanding the foregoing, in any jurisdiction, including the EU, in which, based on the written opinion of an attorney of the Parties' mutual selection who is expert in the applicable laws or regulations of the jurisdiction at issue or based on consultation with the applicable Regulatory Authority, the Parties determine that formation of a joint venture entity or entities to hold the applicable Drug Approval Applications or other governmental licenses, approvals or certificates for Licensed Products is the sole means by which the names of both Parties may appear on the label of a Licensed Product and/or the applicable Licensed Product Promotional Materials, the Parties, upon the written request of either Party, shall form and transfer ownership of the applicable Drug Approval Applications or other governmental licenses, approvals or certificates for Licensed Products to such joint venture entity or entities. Prior to any transfer under this Section 4.4(a), the Parties shall negotiate in good faith as to the necessity of the formation of such an entity or entities and shall consider in preference thereto all commercially reasonable alternatives. Each and every entity formed pursuant to this Section 4.4(a) shall be constituted in a form mutually acceptable to both Parties, shall be jointly owned and controlled by the Parties and shall undertake no business other than holding the applicable Drug Approval Applications or other governmental licenses, approvals, or certificates for Licensed Products. The Parties agree to take all commercially reasonably steps required to eliminate or minimize the tax effects on either Party arising out of the formation of any entity or entities pursuant to this Section 4.4(a). (b) The Filing Party shall not transfer title or otherwise attempt in any manner to dispose of any Clinical Trial Applications or Drug Approval Applications or other government licenses, approvals or certificates for Licensed Products in the Territory, or otherwise impair the other Party's rights in such filings, or other government licenses, approvals or certificates. (c) The Filing Party shall provide the other Party with a copy of any material documents or reports to be filed with the FDA or any other Regulatory Authority under this Agreement. The Joint Project Team shall approve all such material documents or reports prior to filing. Other communications and interactions of either Party with Regulatory Authorities related to Licensed Product shall be subject to the terms of Section 4.5. (d) The Parties will include on all package labels and inserts for Licensed Products sold in the Territory the names and logos of both Elan and Biogen with equal prominence, to the extent permitted by the applicable Regulatory Authorities. 29 To the extent the names and logos of both Elan and Biogen cannot, without violating applicable law, be included with equal prominence on package labels and inserts in a particular country under the current terms of this Agreement, the Parties shall discuss in good faith possible modifications to the terms of this Agreement that would allow the inclusion of both logos in compliance with applicable law. (e) The content and language of the proposed package insert, and all changes thereto, including without limitation, all safety-related package insert changes for Licensed Product shall be agreed upon by the Joint Project Team prior to submission to the applicable Regulatory Authority. 4.5 Regulatory Meetings and Communications. (a) For each country in the Territory, unless the Joint Project Team otherwise specifies, the Parties shall be jointly responsible for conducting meetings and discussions related to Licensed Products with the Regulatory Authorities in each country of the Territory. Each Party shall be given the opportunity to have one or more of its representatives participate in all substantive discussions and meetings with Regulatory Authorities which relate to Licensed Products, including, but not limited to, with respect to any Drug Approval Applications. (b) The Joint Project Team, through its members with regulatory and drug safety expertise, shall develop processes and procedures for the conduct and reporting to the Parties of telephone communications and written correspondence with Regulatory Authorities in the Territory related to Licensed Product. To the extent either Party receives material written or oral communication from the FDA or any other Regulatory Authority relating to Licensed Products, the Party receiving such communication shall notify the other Party and provide a copy of any written communication to the other Party as soon as reasonably practicable. (c) Within sixty (60) days after the Effective Date, the Parties' respective regulatory affairs or other applicable departments, including the members of the Joint Project Team with regulatory and drug safety expertise, shall meet and agree upon processes and procedures to recommend to the Joint Project Team for sharing information needed to support each Party's respective regulatory responsibilities, including without limitation, development of appropriate safety databases relating to Antegren, or, as applicable, other Licensed Products. The processes and procedures adopted by the Joint Project Team under this Section for sharing of information and adverse event reporting shall be consistent with Article 13. (d) The Parties shall cooperate in good faith with respect to the conduct of any inspections by any Regulatory Authority of a Party's site and facilities related to Licensed Products, and each Party shall at a minimum be given the opportunity to attend the summary, or wrap up, meeting related to Licensed Products with such Regulatory Authority at the conclusion of such site inspection. Each Party shall consider the attendance of the other Party at any such regulatory inspections, but shall not be obligated to accept the other Party's attendance at such inspections if such attendance 30 would result in the disclosure to the other Party of confidential information or trade secrets unrelated to the Licensed Products. 4.6 Development Costs. (a) Payment of Development Costs. All Development Costs, except those otherwise specifically excluded under this Section 4.6 and in Section 4.7 of this Agreement, for activities conducted under this Agreement, including without limitation all Development Costs related to physical product development and manufacturing, preclinical studies and clinical studies, shall be shared between Biogen and Elan as provided below and in accordance with the Financial Planning, Accounting and Reporting Procedures attached hereto as Exhibit B, so that Biogen bears *** of such costs and Elan bears *** of such costs, provided that such costs were part of an Annual Workplan/Budget or were otherwise approved by the JSC. There shall be a Reconciliation Statement, prepared by the finance representatives of the Parties on the Joint Project Team as set forth in Exhibit B, of such costs which are to be shared and which are incurred during a reporting period by each Party, in accordance with Section A.2.2 of Exhibit B, with a payment by one Party to the other, within thirty (30) days of receipt of the Reconciliation Statement, to the extent necessary so that each Party bears its appropriate percentage of such shared Development Costs. (b) Development Cost Accounts. Subject to the limitations set forth in this Section 4.6 and in Section 4.7, each Party shall charge all Development Costs so incurred by it or its Affiliates on its books and records to enable the tracking of expenses incurred in connection with the Development Plan and each Annual Workplan/Budget (each, a "Development Cost Project Account"). Within fourteen (14) business days after the end of each Calendar Quarter, each Party shall submit to the other Party a written summary of all expenses charged to its Development Cost Project Account during such Calendar Quarter, which summary shall be accompanied by reasonable supporting documentation for such expenses. (c) Initial Period Costs. Notwithstanding anything in this Agreement to the contrary, during the period commencing on March 1, 2000 and ending on December 31, 2000 (the "Initial Period"), the Development Costs to be shared by the Parties under Section 4.6 (a) shall include solely *** APPROXIMATELY 7 LINES OMITTED ***, as set forth in the Annual Workplan/Budget for 2000 (collectively "Included Initial Period Costs"). All other Development Costs incurred during the Initial Period shall be borne by the Party incurring such costs and shall be excluded from the Development Costs to be shared by the Parties under Section 4.6(a). The Parties further agree that the Development Costs charged by Elan to its Development Cost Project Account for out-of-pocket costs related to goods and services provided or activities performed by Third Parties for the period from March 1, 2000 until the date of this Agreement shall not exceed the amounts set forth in Schedule 4.6(c). CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 31 (d) Expense Limitations. The expenses charged by either Party to its Development Cost Project Account in accordance with this Agreement for any year shall not be in an amount in excess of *** of the amount included for the total expenditures in the then current Development Plan and Annual Workplan/Budget, as appropriate, unless the Joint Project Team recommends and the JSC approves such excess expenses. If actual costs of implementing an Annual Work Plan/Budget or the Development Plan are expected to vary by more than ten percent (10%) from the amounts budgeted for expenditure during the relevant period, the Joint Project Team will revise, as applicable, the Annual Workplan/Budget or Development Plan and submit it in writing, with an explanation of the variance and the reasons therefore, for approval to the JSC. If the JSC does not approve the variance, the amount by which the actual costs exceed *** of the budgeted costs shall be borne by the Party that incurred the costs. (e) Third Party License Fees. Until such date as Antegren, or as applicable, other Licensed Product, is Commercialized in the Territory the Parties *** of any Third Party License Fees relating thereto. The Party paying any Third Party License Fee shall invoice the other Party for its share of such Third Party License Fee within sixty (60) days after the date of payment. The Party receiving such invoice shall reimburse the other Party for its share of such Third Party License Fees within forty-five (45) days after receiving the invoice therefor. After the date when Antegren, or as applicable, other Licensed Product, is Commercialized in the Territory, Third Party License Fees shall be treated as "Other Out of Pocket Costs" under Exhibit B. (f) Records and Audits. During the term of this Agreement, each Party shall keep and maintain accurate and complete records showing the expenses incurred by it in performing its activities under the Development Plan and each Annual Workplan/Budget during the three (3) preceding calendar years, which books and records shall be in sufficient detail such that Development Costs can accurately be determined. Each Party shall have audit rights with respect to such records of the other Party as set forth in paragraph A.6 of Exhibit B. 4.7 Development Opt-Out. (a) Every Commercially Significant Indication shall be considered as a potential indication for the Development of Licensed Products by the Joint Project Team. In the event a Party desires to pursue a Commercially Significant Indication, other than MS or IBD, for Development, the other Party may, by providing a written notice to the Party desiring to proceed, cause any Development Costs associated solely and exclusively with such Commercially Significant Indication (an "Excluded Indication") to be exempted from the provisions of Section 4.6 of this Agreement. For any Excluded Indication, the Party desiring to proceed may continue, at its own cost and within its sole control, to Develop such Excluded Indication. The Party proceeding with Development in an Excluded Indication shall keep the Joint Project Team reasonably informed of the plan for Development, the progress of Development activities and the CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 32 results obtained from Development activities in the Excluded Indication. In addition, notwithstanding anything in this Agreement to the contrary, the Party proceeding with Development in an Excluded Indication shall consult with the Joint Project Team and consider in good faith the input of the Joint Project Team with respect to any decision or action related to Development of Licensed Product in the Excluded Indication to the extent such decision or action may have an impact on the Parties' ability to proceed with Development of Licensed Product in another indication or on the Parties' ability to obtain Regulatory Approval for Licensed Product in another indication or which may result in material safety concerns or other issues being raised that might materially adverse affect the value of Licensed Product in other indications. (b) The Party desiring to proceed in an Excluded Indication shall be responsible for preparing the Drug Approval Application for such Excluded Indication, provided that the filing shall be subject to the approval of the Joint Project Team under the terms of Section 4.4, and shall actually be filed by the Party responsible for regulatory filings under Section 4.4(a). (c) For each Excluded Indication Developed by a Party, commencing upon the date of First Commercial Sale in a Major Market Country with respect to the Excluded Indication, the other Party shall have its Percentage reduced by *** from its then current level. Should a Party whose Percentage is subject to reduction pursuant to this Section 4.7 Develop Licensed Product in a different Excluded Indication, then, on a matching basis, the reduction shall cease upon the date of First Commercial Sale in a Major Market Country in such different Excluded Indication. Additionally, with respect to each Excluded Indication, should a Party whose Percentage is subject to reduction pay, within *** of the First Commercial Sale with respect to such Excluded Indication, to the other Party an amount equal to *** of the total Development Costs related to such Excluded Indication which but for Section 4.7(a) would have been charged to the developing Party's Development Cost Account under Section 4.6, the reduction specified hereunder as a result of such Excluded Indication shall thereafter become *** . In no event shall the cumulative effect of this Section 4.7 be to reduce a Party's Percentage by an amount more than *** . Where on Party's Percentage is reduced pursuant to the operation of this Section 4.7(c), there shall be a corresponding and equal increase in the other Party's Percentage. 4.8 Third Party Research Agreements. (a) Biogen acknowledges that, as of the Effective Date, Elan has certain existing material transfer agreements and collaboration agreements involving use of Licensed Product with academic investigators or governmental research institutions ("Third Party Research Agreements"). The Third Party Research Agreements involving transfer of Antegren executed during the last three (3) years are as listed in Schedule 4.8. Each Party acknowledges that the other Party is required to fulfill its respective commitments under such Third Party Research Agreements. Such commitments may CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 33 include providing investigators with research quantities of Antegren or, as applicable, other Licensed Product for research purposes. Each Party agrees that, to the extent required by the applicable Third Party Research Agreement, the other Party may continue its existing commitments under such Third Party Research Agreements for up to one year from the Effective Date, or as agreed upon by the Joint Project Team, so long as no such commitments hinder a Party's ability to fulfill its responsibilities under the Development Plan or any Annual Workplan/Budget. Consistent with the responsibilities set forth in this Agreement, and with the consent of the appropriate Third Party, if required, each Party agrees promptly to provide the other Party with all data, reports and information related to the Licensed Product in the Field that such Party receives under such Third Party Research Agreements. After the Effective Date, the Parties shall, through the Joint Project Team, agree upon and coordinate subsequent Third Party material transfer and collaboration agreements with academic or governmental research institutions related to Development of Licensed Product or involving the use of Licensed Product, and amendments or extensions of the existing Third Party Research Agreements in a manner so as to conserve the available quantities of the Parties' research materials and to avoid compromise of the Parties' abilities to fulfill their responsibilities under the Development Plan or any Annual Workplan/Budget and with a view toward maintaining access to relevant intellectual property rights. Any such subsequent Third Party agreements shall be in a form of a "Material Transfer Agreement" and/or a "Collaboration Agreement" to be agreed upon by the Parties. (b) In the event that any Third Party Research Agreement, or any Material Transfer Agreement or Collaboration Agreement entered into after the Effective Date results in an invention or know-how made, jointly or solely, by a Third Party that relates to Licensed Products, the Joint Project Team shall determine whether a license (exclusive or non-exclusive) should be obtained under the rights of such Third Party to such invention or know-how in accordance with Section 11.9. If the invention or know-how resulting from the Third Party Research Agreement or Material Transfer Agreement or Collaboration Agreement has applicability outside the scope of this Agreement, and both Parties desire to have access to such invention or know-how for uses outside the scope of this Agreement, the Parties shall ensure that they each have the opportunity to separately license the rights to such invention or know-how. 4.9 Transfer of Materials. During the collaboration hereunder, the Parties anticipate that each Party will transfer certain of its proprietary materials to the other Party. Each Party agrees that it will use such materials of the other Party only for the purposes of the collaboration hereunder, and will not transfer such materials to any Third Party without the consent of the other Party except as expressly permitted under this Agreement. Each Party shall have the right to use proprietary materials made or assembled by either Party during and in furtherance of the collaboration hereunder, and which are directly related to Licensed Product solely for the purposes of the collaboration hereunder, including without limitation, the right to transfer such material to Third Parties, with consent of the JPT, under the form of Material Transfer Agreement or Collaboration Agreement agreed upon by the Parties pursuant to Section 4.8(a) above or as otherwise specifically approved as part of an Annual Workplan/Budget. 34 4.10 COMPLIANCE WITH GLP/GCP AND APPLICABLE LAWS. In performing Development activities, each Party shall comply with all applicable laws, regulations and professional standards. In particular, but without limiting the foregoing, all of the Development activities, including all tasks specified by the Development Plan and any associated Annual Workplan/Budget, shall be performed in accordance with GLP or GCP, to the extent applicable. With respect to any facility or site at which a Party conducts Development pursuant to this Agreement, including, where commercially reasonable and within the control of the other Party, Third Party facilities or sites, each Party shall have the right, at its expense, upon reasonable written notice and during normal business hours, to inspect such site and facility and any records relating thereto as is reasonably necessary to verify the other Party's compliance with the terms of this Agreement relating to GLP and GCP. Such inspection shall be subject to the confidentiality provisions of this Agreement. Each Party agrees to, to the maximum extent possible, to include in any agreement with a Third Party relating to such facilities and sites a clause permitting the other Party to exercise its rights under this Section 4.10. ARTICLE 5. COMMERCIALIZATION IN THE TERRITORY 5.1 Joint Commercialization Efforts . (a) EFFORTS. Elan and Biogen each agree to: (a) collaborate exclusively and diligently in the Commercialization of Antegren or, as applicable, other Licensed Products in the Field and (b) use Commercially Reasonable and Diligent Efforts to Commercialize Antegren or, as applicable, other Licensed Product, promptly and in such a manner as to optimize the profitability of Licensed Product for both Parties. Except as otherwise set forth in this Article 5, all activities shall be undertaken by the Parties in accordance with the Commercialization Plan and Annual Commercialization Plan/Budget developed under Section 5.1(c) and all sales shall be made under a single brand name and trademark, using professional sales representatives who are employees of the Parties. (b) APPOINTMENT OF DESIGNATED PARTY. Guided by the principles set forth in Section 2.1, for each indication, the Joint Commercialization Team shall appoint a Party as the "Designated Party" under this Agreement to play the primary role in marketing and sales activities in such indication as described in Sections 5.3 and 5.4. The formal designation of a Designated Party for an indication shall occur no later than sixty (60) days after the start of the Phase III Clinical Trial of Licensed Product in such indication. Notwithstanding anything in this Agreement to the contrary, the following shall apply with respect to the appointment of a Designated Party: (i) *** shall be the Designated Party for IBD, (ii) *** shall be the Designated Party for MS, (iii) the Party that bears the costs, as incurred, for Development of an Excluded Indication shall be the Designated Party for such indication and (iv) unless the JSC determines that it does not make sense to do so, the JCT shall appoint the Parties as CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 35 Designated Party for those indications not covered by clauses (i), (ii) or (iii) above on an alternating basis. (c) COMMERCIALIZATION PLAN/ANNUAL COMMERCIALIZATION PLAN/BUDGET. Within one hundred eighty (180) days after its creation, the JCT shall prepare, and submit to the JSC for approval, a rolling multiyear (not less than three (3) years) plan for Commercializing Antegren or, as applicable, any other additional Licensed Product in the Territory (the "Commercialization Plan"). Notwithstanding anything in this Agreement to the contrary, the Designated Party for an indication shall be responsible for proposing the sections of the Commercialization Plan related to such indication, provided that the proposal is subject to the review and approval of the full JCT and, ultimately, the approval of the JSC. The Commercialization Plan shall include a comprehensive market development, marketing, sales, supply and distribution strategy for each Licensed Product in the Territory. The Commercialization Plan shall be updated by the JCT by May 15 of each year and submitted for approval by the JSC at its meeting next following the date on which the updated plan is available. Each updated Commercialization Plan shall address no less than the three (3) upcoming years. Not later than sixty (60) days after the filing of the first Drug Approval Application for a Licensed Product in the Territory, the JCT shall prepare an annual commercialization plan and budget (the "Annual Commercialization Plan/Budget"). Notwithstanding anything in this Agreement to the contrary, the Designated Party for an indication shall be responsible for proposing the sections of the Annual Commercialization Plan/Budget related to such indication and all periodic updates thereto, provided that the proposal is subject to the review and approval of the full JCT and, ultimately, the approval of the JSC. The first such Annual Commercialization Plan/Budget shall cover the remainder of the calendar year in which such Licensed Product is anticipated to be approved plus the first full calendar year thereafter. On or before September 15 of each year thereafter, the JCT shall prepare an Annual Commercialization Plan/Budget for the upcoming year, together with any necessary updates to the Commercialization Plan, and shall submit such Annual Commercialization Plan/Budget and such updates to the JSC for approval at the meeting of the JSC next following the date when such plan is available. Each Annual Commercialization Plan/Budget shall be based on the then current Commercialization Plan and, taking into account the provisions of this Article 5 and the other terms of this Agreement, shall include a comprehensive market development, marketing, customer support, sales, supply and distribution strategy, a detailed plan for implementation of such strategy, designation of which Party is responsible for each activity, including a description of which audiences and distribution channels each Party shall devote its respective Promotion efforts towards, the personnel and other resources to be devoted by each Party to such efforts, the number and positioning of details and the type and level of other sales force activities to be performed by each Party, as well as market and sales forecasts and forecasts of related operating expenses for the Licensed Product in each country of the Territory, annual production requirements as set forth in Section 3.3(d) and budgets for all projected Commercialization expenses. The JCT shall divide responsibilities, where appropriate, with the intent that, in general, Sales Representatives from only one Party will call on any individual customer. In preparing and updating the Commercialization Plan and each Annual Commercialization Plan/Budget, the JCT will take into consideration factors such as market conditions, regulatory issues and 36 competition as well as the other provisions of this Article 5 and the other terms and conditions of this Agreement. (d) CONTRACT SALES ORGANIZATION. Notwithstanding the foregoing, if the Joint Commercialization Team recommends, and the JSC agrees, that it would be in the best interest of both Parties for one or both of the Parties to contract with one (1) or more Third Parties who, by agreement, performs selling activities (a "Contract Sales Organization") to perform all or part of such Party's sales efforts hereunder, then such Party may enter into a contract with such Contract Sales Organization to perform such activities, which such Contract Sales Organization and contract shall be subject to the prior written approval of the JSC. The Parties may also agree to appoint one or more Third Party distributors to assist in Commercialization efforts as specified in Section 5.4(c). 5.2 PRICING. On a periodic basis, as agreed upon by the JCT, both Parties shall conduct studies relating to the optimal pricing and reimbursement strategies on a country-by-country, or as applicable, regional basis. Such studies shall be presented to the JCT and any recommendations by either Party relating to pricing and reimbursement strategies shall be submitted to the JCT in order to permit it to prepare the Commercialization Plan and each Annual Commercialization Plan/Budget. Based on such information and recommendations, the JCT shall establish a recommended price range, on a country by country basis, including a pricing and discounting strategy. The price range will contain an upper and lower price. The Parties may take various considerations into account in establishing the upper and lower price. In setting the lower end of the price range, factors to be considered by the Parties will include *** . In setting the upper end of the price range, factors to be considered by the Parties will include *** . Notwithstanding anything in this Agreement to the contrary, *** APPROXIMATELY 5 LINES OMITTED ***, the Parties agree to negotiate in good faith an alternative arrangement which would provide equivalent economic benefit to *** . In the event *** becomes the Distributing Party in any country, the Parties shall discuss in good faith modifications to the terms of this Agreement *** . 5.3 Marketing Responsibilities/Marketing Materials. (a) Role of Designated Party in Marketing. The Designated Party in any indication shall have the primary role, with the other Party's participation, and subject to the approval of the JCT, in (i) preparing annual marketing plans and overall marketing and promotional platforms and campaigns for the market for such indication, including allocation for sales and marketing personnel in such indication between the Parties; (ii) implementing marketing activities (including those related to product launch) for Antegren or, as applicable, other Licensed Product, with respect to such indication; (iii) the design of Licensed Product Promotional Materials; and (iv) proposing patient assistance programs. The non-Designated Party shall have the right, CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 37 through the JCT, to provide input to the Designated Party with respect to marketing and product launch activities for Licensed Product in the designated indication in the Territory, including, without limitation, input into the design of Licensed Product Promotional Material in accordance with procedures established by the JCT which shall include review and approval of such materials by the applicable review or clearance committees of both the Designated Party and the non-Designated Party. The role of the Designated Party in sales efforts is described in Section 5.4. (b) Pre-Marketing Expenses. On a country by country basis, before Regulatory Approval in such country of the Territory, the Pre-Marketing Expenses incurred by the Parties with respect to such Licensed Product in anticipation of obtaining Regulatory Approval of such Licensed Product in such country shall be *** by the Parties, consistent with plans and budgets established in the Development Plan and associated Annual Workplan/Budget or the Commercialization Plan or any Annual Commercialization Plan/Budget. As such Pre-Marketing Expenses are incurred they shall be paid for by the Party incurring such expenses, subject to reimbursement as set forth in Exhibit B. (c) Product Trademarks. Antegren shall be sold in the Territory under the Antegren Trademark as selected by the JCT with the advice and counsel of the JPC. As applicable, all other Licensed Products shall be sold in the Territory under trademarks selected by the JCT and approved by the JSC with the advice and counsel of the JPC (the "Product Trademarks"). The term "Product Trademarks" shall also include any servicemarks selected by the JCT for use in connection with services related to Antegren, or, as applicable, other Licensed Product. The JCT shall use its best efforts to select a worldwide Product Trademark for each Licensed Product. In the event of a Third Party challenge of the Parties right to commercialize Licensed Product under the Antegren Trademark or selected Product Trademark, the JPC shall consider the grounds for such challenge and recommend to the JCT a course of action in the affected market based on an assessment of the legal merits of such Third Party claim. The foregoing procedure shall also be followed in the event of an objection to the Antegren Trademark or selected Product Trademark raised by a Regulatory Authority that is reviewing a Drug Approval Application. (d) Party Name on Licensed Product Promotional Materials. With respect to Licensed Product Promotional Materials, to the extent such Licensed Product Promotional Materials identify or otherwise make reference to either of the Parties, Elan and Biogen shall both be presented and described with equal prominence and emphasis as having joined and participated in the development and joint commercialization of Antegren or, as applicable, other Licensed Product, as permitted by the applicable laws and regulations of each country in which such Licensed Product Promotional Materials are to be presented. The manner in which the trademarks and business name of the Parties is to be presented on the Licensed Product Promotional CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 38 Material shall be subject to prior review and approval of the JCT, with the advice and counsel of the JPC. 5.4 Sales Efforts in the Territory. (a) Sales Representatives. The sales force of the Designated Party for an indication shall be primarily responsible for Promoting and marketing Licensed Product in such indication in the Territory. Notwithstanding the foregoing, in its proposed Annual Commercialization Plan/Budget for an indication, the Designated Party shall provide that no less than *** of those total sales effort resources used in interactions with customers in each of the U.S. and the EU which are to be furnished directly by the parties shall be provided by the non-Designated Party to the extent that such Party has the appropriate resources. The foregoing shall not apply if the JSC, in an affirmative decision, determines that such allocation would create undue operational inefficiencies. If the JSC does not make such an affirmative decision or is deadlocked, the foregoing *** allocation shall apply. The non-Designated Party shall have the right, through the JCT, to provide input to the Designated Party with respect to sales efforts for Licensed Product in the designated indication in the Territory. Where it makes commercial sense to do so given the size of the potential market or based on other commercial factors, upon the recommendation of the Designated Party for an indication, the JCT may decide to allocate sole responsibility for Promotion and marketing activities in some countries to one Party on a country by country basis. Sales Representatives of both Parties shall only use Licensed Product Promotional Materials that have been designed by the applicable Designated Party and approved by the JCT, unless the JCT otherwise determines. In the event that the Licensed Product has failed in either IBD or MS, but succeeds in the other indication and at such time Licensed Product is not being developed for any other Commercially Significant Indication, the JSC shall consider in good faith a request of the non-Designated Party, if made eighteen (18) months prior to the anticipated date of launch of the Licensed Product in the designated indication, to increase its allocation of the total sales force effort under the preceding sentence from *** to *** . The JSC shall grant such a request if it makes a specific determination that (i) the increased participation by the non-Designated Party in the sales force effort in the applicable indication will add value to the profitability of the Licensed Product and (ii) that such added value outweighs any additional operational costs and/or complexity arising out of such additional participation. If the JSC does not make an affirmative decision to permit the non-Designated Party to increase its sales force effort as provided for in the preceding two sentences or is deadlocked, the *** allocation shall continue to apply, notwithstanding anything in this Agreement to the contrary. (b) Sales Representative Training. Each Party Promoting Antegren or, as applicable, other Licensed Product, in any country in the Territory shall supervise and maintain such competent and qualified Sales Representatives as may be required to fulfill its Promotion responsibilities under the Annual Commercialization CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 39 Plan/Budget. With respect to each country in the Territory, the Sales Representatives of the Parties shall be jointly trained by the Parties, as agreed upon by the JCT and approved by the JSC. Each Party shall periodically provide additional training, in accordance with the training requirements and training programs and using training materials approved by the JCT, to each of its Sales Representatives engaging in Promotion activities hereunder. (c) Use of Third Party Distributors. The JCT shall determine in which countries, if any, the Parties shall appoint Third Party distributors. The Distributing Party shall be responsible for entering into the agreement with the Third Party distributor, provided that the distributor and the form of the distribution agreement must be approved in advance by the JSC. (d) Sales Forecasts. The Designated Party for an indication shall be responsible for preparing monthly 24-month rolling sales forecasts and manufacturing resource plans for such indication. (e) Co-Promotion Compliance Responsibilities. Each Party Promoting a Licensed Product in the U.S. shall in all material respects conform its practices and procedures relating to such Promotion to the FD&C Act, the PHS Act, the Pharmaceutical Research and Manufacturers of America ("PhRMA") Code of Pharmaceutical Marketing Practices (the "PhRMA Code") and the American Medical Association ("AMA") Guidelines on Gifts to Physicians from Industry (the "AMA Guidelines"), as the same may be amended from time to time, and promptly notify the other Party of and provide the other Party with a copy of any material correspondence or other reports with respect to the Promotion of a Licensed Product submitted to or received from the FDA, PhRMA or the AMA relating to the FD&C Act, the PHS Act, the PhRMA Code, or the AMA Guidelines. Outside of the U.S., the Parties shall in all material respects conform their practices and procedures relating to such Promotion to the applicable laws, rules and regulations of the applicable country in the Territory, and similarly provide the other Party with a copy of comparable correspondence or other reports as applicable in such country. Each Party shall cause each of its employees, representatives and agents, including, without limitation, each of its Sales Representatives, to do nothing which such Party knows or reasonably should know would jeopardize the goodwill or reputation of either Party or Antegren, or, as applicable, other Licensed Product. (f) Labeling Claims. Each Party shall limit the claims of safety and efficacy that such Party or its sales force makes for a Licensed Product in the Territory to those that are consistent with the approved labeling for such Licensed Product in such country of the Territory. Neither Party may add, delete or modify claims of efficacy or safety in its Promotion of any Licensed Product in the Territory nor make any other changes in Promotion materials, Licensed Product Promotional Materials and literature approved by the JCT unless the change is approved by the JCT. Each Party shall be fully responsible for disseminating accurate information regarding any Licensed Product to its Sales Representatives based on approved labeling and information provided by the JCT. 40 (g) Samples. No Sampling of Licensed Product shall occur unless the JCT has approved a Sampling program. If the JCT determines that a Sampling program is advisable, each Party's Sales Representatives shall follow the procedures for Sampling agreed upon by the JCT and shall perform Sampling in compliance with all applicable laws and regulations. 5.5 CUSTOMER SERVICE. As part of its Commercialization Plan and each Annual Commercialization Plan/Budget, the JCT shall develop a strategy and procedures for customer support services, on a country by country basis, including the integration of such services with marketing and sales activities of both Parties, the logistics, order entry and invoicing activities of the Distributing Party and the ongoing regulatory obligations and information collection activities of the Parties as specified in this Agreement. The JCT shall, based on the recommendation of the relevant Designated Party as to customer support in a particular indication, allocate responsibility for customer support services between the Parties in such a way as to balance the goal of providing consistent, high quality support with the goal of utilizing, to the extent practicable, the then-prevailing infrastructure and expertise of each Party in a given activity or with respect to a specific indication. 5.6 DISTRIBUTION ACTIVITIES. Notwithstanding anything in this Agreement to the contrary, *** shall be the "Distributing Party" in each country of the Territory unless the Joint Commercialization Team recommends, with the approval of the JSC, that *** assume such responsibilities in a country. The Distributing Party in a country shall be responsible for processing orders, pick, pack and ship operations, order delivery, invoicing and collection activities and any other distribution activities that are allocated to the Distributing Party in the Commercialization Plan and an Annual Commercialization/Budget (collectively, "Distribution Activities"). All Distribution Activities shall be performed by the Distributing Party in accordance with the Commercialization Plan and an Annual Commercialization/Budget using employees and facilities of the Distributing Party or using a Third Party or Third Parties approved by the JCT under a contract approved by the JCT. 5.7 RECALLS. Decisions with respect to recalls, withdrawals or corrections of Licensed Product related to manufacturing or product quality issues shall be handled in accordance with the Clinical Supply Agreement and the Commercial Supply Agreement. The JSC shall have decision-making authority with respect to issuing all other recall, market withdrawal or correction of any Licensed Product in the Territory. The members of the JSC for each Party shall delegate their authority under this Section to the appropriate executive officers in their respective regulatory departments who shall develop appropriate standard operating procedures with respect to recalls. To the extent regulatory timeframes or public safety considerations require immediate action, a telephone conference of the JSC's designees under this Section shall be called within the required timeframe to consider the action and make a decision. Each Party shall notify the other Party promptly (and in any event within twenty-four (24) hours of receipt of CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 41 written notice) if any Licensed Product is alleged or proven to be the subject of a recall, market withdrawal or correction in any country in the Territory. Once a recall or withdrawal decision has been made under this Section, the Distributing Party, under the direction of the JCT and the designees of the JSC, shall be responsible for handling and implementing such recalls and market withdrawals of any Licensed Product in the Territory, provided that such activities be performed in accordance with standard operating procedures approved by the JCT and the JSC. The other Party will make available to the Distributing Party, upon request, all of the other Party's pertinent records that the Distributing Party may reasonably request to assist it in effecting any recall or market withdrawals. The Parties shall share equally all costs of a recall or marketing withdrawal in the Territory in accordance with a budget for such activities to be agreed upon by the JCT and approved by the JSC. A Party shall have no obligation to reimburse or otherwise compensate the other Party for any lost profits or income that may arise in connection with any such recall or market withdrawal. Any investigation conducted in connection with a Licensed Product recall shall be undertaken jointly by the Parties under the direction of the JSC. 5.8 Marketing Rights. (a) Single Party Promotion. The Parties hereby agree that in the event that only one Party plans to Promote a Licensed Product in any country or countries in the Territory, then such Party may request good faith negotiations with the other Party to obtain a potential royalty-bearing license in such country or countries to replace the economic terms of this Agreement therefor, where the royalty rate for such a license would place the non-Promoting Party in the same economic position as expected by the economic terms of this Agreement for sales of such Licensed Product in such country or countries. Nothing herein, however, shall obligate either Party to enter into such a license agreement in such event. (b) Both Parties. The Parties hereby agree that in the event that neither Party will Promote a Licensed Product in any country or countries in the Territory, then the Parties shall promptly meet in an attempt to determine whether to appoint a Third Party distributor under 5.4(c) or whether the best approach is to license the marketing and sales rights for such Licensed Product in such country or countries. If the Parties choose to license rights, they either will mutually agree upon a royalty rate for such license that is approximately equivalent to each Party's anticipated economic return hereunder expected for sales of such Licensed Product in such country or countries, or agree upon the mechanism for otherwise sharing the economic return from Licensed Products as provided under this Agreement in such country or countries. 42 ARTICLE 6. CONSIDERATION/COST ALLOCATION 6.1 PERCENTAGE. Subject to the adjustments set forth in Section 4.7, the Biogen Percentage shall be *** and the Elan Percentage shall be *** for Net Sales of Licensed Products in the Territory under *** on an annual basis. When Net Sales of Licensed Product are, on average, for four (4) Calendar Quarters, in excess of *** per Calendar Quarter, then Elan, at its sole discretion, within thirty (30) days of the end of that Calendar Quarter, may make a first single payment (the "First Tier Payment") to Biogen of *** . If Elan remits the First Tier Payment to Biogen, the Percentages applicable when Net Sales are in excess of *** , but less than *** on an annual basis, will continue to be *** as the Elan Percentage and *** as the Biogen Percentage, subject to the adjustments set forth in Section 4.7. Should Elan elect not to make the First Tier Payment, the Percentages applicable when Net Sales are in excess of *** on an annual basis shall be adjusted such that the Biogen Percentage is *** and the Elan Percentage is *** , subject to further adjustment as set forth in Section 4.7. If Elan has remitted to Biogen the First Tier Payment and, thereafter, Net Sales of Antegren or, as applicable, other Licensed Product, on average, for four (4) Calendar Quarters, are in excess of *** per Calendar Quarter, then Elan, at its sole discretion, within thirty (30) days of the end of that Calendar Quarter, may make a second single payment (the "Second Tier Payment") to Biogen of *** . If Elan remits the Second Tier Payment to Biogen, the Percentages applicable when Net Sales are in excess of *** on an annual basis will continue to be *** as the Biogen Percentage and *** as the Elan Percentage, subject to the adjustments set forth in Section 4.7. Should Elan elect not to make the Second Tier Payment and having made the First Tier Payment, the Percentages applicable when Net Sales are in excess of *** on an annual basis shall be adjusted such that the Biogen Percentage is *** and the Elan Percentage is *** , subject to further adjustment as set forth in Section 4.7. 6.2 REIMBURSABLE COMMERCIAL COST SHARING. The Parties shall split Reimbursable Commercial Costs in accordance with the Parties' respective Percentages, and in accordance with the procedures described in the Financial Planning, Accounting and Reporting Procedures attached hereto as Exhibit B. There shall be a Reconciliation Statement, prepared by the finance representatives of the Parties on the JPT or Joint Commercialization Team as set forth in Exhibit B, of such costs which are to be shared and which are incurred during a reporting period by each Party, in accordance with Section A.2.2 of Exhibit B, with a payment by one Party to the other, within thirty (30) days of receipt of the Reconciliation Statement, to the extent necessary so that each Party bears its appropriate Percentage of such shared Reimbursable Commercial Costs. Elan shall be entitled to credits against its share of Reimbursable Commercial Costs otherwise owed to Biogen under this Section in the amount of *** and any additional amounts set forth below upon occurrence of the corresponding triggering event. The credits may be applied only after First Commercial Sale of CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 43 Licensed Product in MS, if any. Elan may not apply credits of more than *** in any one (1) year.

Event Credit Amount ----- ------------- Biogen's initiation of the Clinical Resupply Campaign $ *** following successful production at 200 liter scale Biogen's conduct of the Clinical Resupply Campaign in $ *** accordance with the Development Plan and satisfactory completion of comparability protocols such that there is sufficient Clinical Supplies for Phase III Clinical Trials in MS and Crohn's disease as currently contemplated such that unrestricted enrollment in the trials could begin by the Anticipated Phase III Start Date (even if such trials do not actually begin by such date)

6.3 UPFRONT FEE. On the Effective Date, Biogen shall pay Elan an up-front fee of fifteen million dollars ($15,000,000) to reimburse Elan for research and development expenditures previously incurred by Elan. The payment set forth in this Section 6.3 shall not be refundable or creditable and shall not be subject to or create future performance obligations on the part of either Biogen or Elan. The terms of this up-front fee are separate and distinct from the other terms of this Agreement. 6.4 MILESTONE PAYMENTS TO ELAN. Biogen shall pay to Elan the following milestone payments, each such payment being due and payable one time only and within thirty (30) days after the occurrence of the corresponding triggering event.

Event Payment To Elan By Biogen ----- ------------------------- *** $ *** *** APPROXIMATELY 5 LINES OMITTED *** $ *** *** APPROXIMATELY 15 LINES OMITTED *** $ ***

CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 44

Event Payment To Elan By Biogen ----- ------------------------- *** APPROXIMATELY 5 LINES OMITTED *** $ *** *** APPROXIMATELY 5 LINES OMITTED *** $ *** *** APPROXIMATELY 5 LINES OMITTED *** $ ***

Each of the milestone payments set forth in this Section 6.4 are payable only once, and shall be not be refundable or creditable or subject to or create any future performance obligations on the part of either Biogen or Elan. The terms of the milestones are separate and distinct from the other terms of this Agreement. 6.5 RECORDS OF NET SALES AND COMMERCIALIZATION COSTS. Each Party will maintain complete and accurate records which are relevant to costs, expenses, sales and payments used to determine payments to be made under this Agreement and such records shall be open during reasonable business hours for a period of three (3) years from creation of individual records for examination at the other Party's expense and not more often than once each year by an independent certified public accountant selected by the other Party as described in A.6 of Exhibit B. Any records or accounting information received from the other Party shall be Confidential Information for purposes of Article 10. Results of any such audit shall be provided to both Parties, subject to Article 10. ARTICLE 7. MANUFACTURE AND SUPPLY 7.1 Manufacture of Licensed Products. (a) Technology Transfer. Elan will ensure that a letter agreement regarding technology transfer agreement with Lonza, in the form attached to this Agreement as Exhibit D, is in effect by the execution date of this Agreement. Commencing on the Effective Date, Elan shall commence transfer of manufacturing Know-how from Elan and Lonza to Biogen, and shall use Commercially Reasonable and Diligent Efforts to ensure that such technology transfer is completed within sixty (60) days of the Effective Date. CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 45 (b) Existing Supplies and Commitments. Elan's sole current manufacturing commitments are with the third party contract manufacturers as set forth in Schedule 7.1(b)(i). The Parties will initially use Elan's existing Clinical Supplies of Antegren and the quantities of Antegren currently scheduled to be manufactured by Elan's contract manufacturer for preclinical, and, as determined by the Joint Project Team, for clinical trial uses. Elan's existing inventory of Clinical Supplies is described in Schedule 7.1(b)(ii). The JPT shall determine whether to have Elan instruct Lonza to complete the manufacture of six to nine batches of Antegren in 2000 and 2001, and Elan shall comply with such instruction. (c) Clinical Supplies. Biogen shall be responsible for scale-up of the manufacturing process for Licensed Product at Biogen's facility, and preparation for the production of Clinical Supplies. Commencing at such time as the technology transfer and manufacturing scale-up processes at Biogen have been completed and the FDA has granted any approvals and licenses required for Licensed Product manufactured by Biogen to be used in clinical trials, Biogen shall supply Clinical Supplies of Antegren for the completion of human clinical trials in the Territory, subject to the terms of a "Clinical Manufacturing Agreement" to be entered into by the Parties within sixty (60) days of the Effective Date in a form to be mutually agreed upon by the Parties. Once Clinical Supplies are available from Biogen, the Joint Project Team shall determine from which source of Licensed Product preclinical and clinical needs will be filled. (d) Costs Associated with Clinical Supplies *** of Biogen's Cost of Goods Manufactured For Sale for manufacture and supply of Clinical Supplies incurred after the execution date shall be included as Development Costs. (e) Commercial Supplies. Biogen shall be responsible for establishing a commercial manufacturing process, and supplying Commercial Supplies of Antegren, or applicable, other Licensed Product at the scale and in the amounts required to meet worldwide demand for Licensed Product subject to oversight of the JSC with respect to plans and forecasts. Within ninety (90) days after initiation of a Phase III Clinical Trial of Licensed Product, the Parties will enter into a "Commercial Manufacturing and Supply Agreement" in a form to be mutually agreed upon by the Parties. The executed Commercial Supply Agreement shall contain terms and provisions identical or not less favorable than the applicable provisions of this Agreement. The termination provisions in the Commercial Supply Agreement shall be identical to those provisions related to continuation of supply after termination contained in Article 14. The purchase price to be paid by Elan for Commercial Supplies provided by Biogen under the Commercial Manufacturing and Supply Agreement shall be the applicable Transfer Price as defined under this Agreement, provided, however, that the purchase price of any unit of Commercial Supplies to be distributed as Samples shall be *** . The Transfer Price shall be calculated on a quarterly basis, or on a such other basis as the JCT shall determine. The Transfer Price shall be paid within thirty (30) days after such Commercial Supplies are delivered to Elan or its designee. CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 46 (f) Decision-making. Notwithstanding anything in this Agreement to the contrary, Biogen shall have final decision-making authority solely with respect to issues directly related to physical product development, process development and day-to-day manufacturing of Licensed Product, provided that such decisions are made in good faith and are consistent with the plans and forecasts for Licensed Product approved by the JSC. For purposes of clarity, it is understood by the Parties that strategic decisions related to physical product development, process development, and manufacturing shall be made by the JSC. (g) Use of Third Party Suppliers. In the event that Biogen desires to use a Third Party to perform any part of manufacturing of Commercial Supplies, the JSC shall first consider whether Elan has the ability, capability and desire to perform such manufacturing operations, and, if so and if the Parties are able to agree on terms that are acceptable to both Parties, the Parties shall amend this Agreement and the Commercial Manufacturing and Supply Agreement to cover the manufacturing operations to be performed by Elan. 7.2 PAYMENTS TO BIOGEN. Upon occurrence of the events specified below, Elan shall make the corresponding payment to Biogen to reimburse Biogen for manufacturing-related expenditures incurred by Biogen. The payments shall not be refundable or creditable and shall not be subject to or create future performance obligations on the part of either Biogen or Elan. The terms of these payments are separate and distinct from the other terms of this Agreement.

Event Credit Amount ----- ------------- *** $ *** *** $ *** *** $ *** *** APPROXIMATELY 8 LINES OMITTED *** $ ***

7.3 ALTERNATIVE MANUFACTURING. To the extent relevant activities are contained in the Development Plan and Annual Workplan/Budget, Elan shall have CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 47 primary responsibility for completing the evaluation of the economic viability of manufacturing Licensed Product through the introduction of genetic material into a goat. If recommended by the Joint Project Team and approved by the JSC, as part of an Annual Workplan/Budget, Elan may enter into contracts with such Third Parties as may be approved by the Joint Project Team in order to evaluate the transgenic means of production referred to in this Section 7.3. Elan's costs associated with this Section 7.3 shall, where included within an Annual Workplan/Budget, be chargeable as Development Costs. If the JSC, upon the recommendation of the Joint Project Team, decides to pursue the transgenic means of production for Clinical Supplies or Commercial Supplies, the Parties shall negotiate in good faith appropriate adjustments to this Agreement. 7.4 COMPLIANCE WITH GMP. All of the manufacturing activities with respect to Clinical Supplies intended for use in humans and Commercial Supplies shall be performed in accordance with GMP. With respect to any facility or site at which a Party conducts manufacturing pursuant this Agreement, including, where commercially reasonable and within the control of the other Party, Third Party facilities or sites, each Party shall have the right, at its expense, upon reasonable written notice and during normal business hours, to inspect such site and facility and any records relating thereto as is reasonably necessary to verify the other Party's compliance with the terms of this Agreement relating to GMP. Such inspection shall be subject to the confidentiality provisions of this Agreement. Each Party agrees to, to the maximum extent possible, to include in any agreement with a Third Party relating to its facilities and sites a clause permitting the other Party to exercise its rights under this Section 7.4. ARTICLE 8. LICENSES 8.1 LICENSE TO ELAN WITHIN THE FIELD IN THE TERRITORY. Subject to the terms and conditions of this Agreement, including, without limitation, Article 6, Biogen hereby grants to Elan a worldwide royalty-free license, without the right, except as otherwise provided for herein, to sublicense, under the Biogen Patents and Biogen Know-how in the Field to develop, make, have made, use, market, sell, distribute, export, import, offer for sale, have sold, or have distributed or imported Licensed Products in the Territory. The license granted to Elan hereunder, in any country, shall be co-exclusive with Biogen. Biogen agrees not to grant to any Third Party any license rights under Biogen Patents and/or Biogen Know-how to develop, make, have made, use, sell, offer for sale, have sold and/or import Licensed Products except as otherwise permitted under this Agreement. 8.2 LICENSE TO BIOGEN WITHIN THE FIELD IN THE TERRITORY. Subject to the terms and conditions of this Agreement, including, without limitation Article 6, Elan hereby grants to Biogen a worldwide royalty-free license, without the right, except as otherwise provided for herein, to sublicense, under the Elan Patents and Elan Know-how in the Field to develop, make, have made, use, market, sell, distribute, export, import, offer for sale, have sold, or distributed or imported Licensed Products in the Territory. The license granted to Biogen hereunder, in any country, shall be co-exclusive with Elan. Elan agrees not to grant to any Third Party any license rights under Elan Patents and/or 48 Elan Know-how to develop, make, have made, use, sell, offer for sale, have sold and/or import Licensed Products except as otherwise permitted under this Agreement. 8.3 UNBLOCKING LICENSES. In the event that the Development activities of a Party, or authorized Third Party, under this Agreement and/or the manufacture and/or Commercialization of Licensed Products in the Territory would, during the term of this Agreement, misappropriate any know-how and/or infringe any patent rights Controlled by the other Party that are not covered by the licenses and sublicenses granted to in Sections 8.1 and/or 8.2, each Party hereby grants to the other Party, to the extent such Party is legally able to do so, a worldwide, non-exclusive, non-royalty bearing license, under such know-how and patent rights, to enable the licensed Party perform its obligations under this Agreement and to manufacture and/or Commercialize Licensed Products in the Territory in accordance with the licenses and sublicenses granted in Sections 8.1 and 8.2 of this Agreement. 8.4 RIGHT TO GRANT LICENSES/SUBLICENSES. Subject to Section 10.2, if pursuant to this Agreement, the JSC approves the utilization of one or more Third Parties to perform certain tasks in the conduct of the Development Plan and Annual Workplan/Budget, the Commercialization Plan, the Annual Commercialization Plan/Budget, or the manufacture of Clinical Supplies or Commercial Supplies, the Party entering into a contract with such Third Party for the performance of such services, may, as part of such contract, grant to such Third Party a nonexclusive, nontransferable license or sublicense, as applicable, without the right to grant sublicenses, under the Elan Patents, Elan Know-how, Biogen Patents or Biogen Know-how, as applicable, only to the extent and only for so long as such license or sublicense is necessary for such Third Party to perform such tasks. All such contracts and sublicenses entered into by either Party with any such Third Party shall be subject to the prior written approval of the JSC with the prior review of each Party's legal department, which approval shall not be unreasonably withheld or delayed. 8.5 *** SUBLICENSE. The Parties agree to comply with the obligations set forth in the *** 8.6 ELAN IN-LICENSES. Elan shall not terminate or amend the Elan In-Licenses without the prior written consent of Biogen. ARTICLE 9. TRADEMARKS AND SERVICEMARKS 9.1 PRODUCT TRADEMARKS. Each Party agrees to sell Antegren solely in connection with the Antegren Trademark chosen by the JCT with the advice and counsel of the JPC pursuant to Section 5.3(c). All other Licensed Products shall be sold in the Territory under the Product Trademarks chosen by the JCT, with the advice and counsel of the JPC as described in Section 5.3(c) above. The Distributing Party, in coordination CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 49 with, and subject to the review and approval of, the JCT and the JPC, shall be responsible for the preparation, prosecution and maintenance of applications related to the Antegren Trademark and Product Trademarks in each country in the Territory in which it is the Distributing Party, which such Antegren Trademark and Product Trademarks shall be owned by such Distributing Party, subject to the terms of this Agreement. Each Distributing Party, subject to the terms of Section 9.3, shall grant to the other Party a royalty-free, nontransferable, non-assignable, fully paid up, license to use the Antegren Trademark and the Product Trademarks as contemplated by this Agreement. The costs of the preparation, prosecution and maintenance of such Product Trademark applications and Product Trademarks shall be included in Other Out of Pocket Costs pursuant to Exhibit B to the extent such costs are included in the Development Budget/Plan or the Commercialization Plan. 9.2 PARTY TRADEMARKS ON LICENSED PRODUCT PROMOTIONAL MATERIALS. All Licensed Product Promotional Materials used by either Party in Promoting in the Territory shall contain (a) the Biogen trademarks, corporate name and logo as may be provided by Biogen to Elan from time to time and (b) the Elan trademarks, corporate name and logo as may be provided by Elan to Biogen from time to time, in positions of equivalent prominence and emphasis, subject to Sections 5.3(d) and 9.4. 9.3 Trademark Licenses. (a) In order to enable each Party to perform its obligations as set forth in Section 9.2 above, Biogen hereby grants to Elan a non-assignable, non-exclusive, royalty-free right and license to use the BIOGEN trademark as specified by Biogen and as modified by Biogen from time to time (the "BIOGEN trademark"), and Elan hereby grants to Biogen a non-assignable, non-exclusive, royalty-free right and license to use the ELAN trademark as specified by Elan and as modified by Elan from time to time (the "ELAN trademark") in the Territory solely in connection with the Licensed Product Promotional Materials and labeling for Licensed Products. (b) Elan hereby grants to Biogen a royalty-free, fully paid up, co-exclusive license to use the Antegren Trademark in the Territory for the Development, Promotion, and manufacturing and Commercialization activities provided for in this Agreement and each Party shall grant to each other a royalty-free, fully paid up, co-exclusive license to use the Product Trademarks in the Territory for the Development, Promotion, and Commercialization and manufacturing activities provided for in this Agreement. (c) The trademark licenses granted under this Section 9.3 shall be sublicensable to the extent and pursuant to the express terms and conditions permitted under Section 8.4 above. Unless otherwise agreed, each such sublicensee shall be subject to all of the obligations of the licensing or sublicensing Party. Furthermore, the licenses set forth in this Section 9.3 shall expire as to any terminating Party under Section 14.2 or breaching Party in the event of termination under Section 14.4 or non-purchasing Party under Section 14.1(b), 14.7, or 14.8, and any license rights under Section 9.3(b) shall become exclusive to the non-terminating or non-breaching Party or the purchasing Party, 50 as the case may be, immediately upon termination of this Agreement; provided, however, each Party (to the extent permitted under this Agreement to sell Licensed Products after termination) shall thereafter have a reasonable period, not to exceed *** following such termination, within which to use the existing inventory of such Licensed Product Promotional Materials and labeling containing any trademarks of the other Party. Upon a termination pursuant to Section 14.2 or 14.4 below or a purchase under Sections 14.1(b), 14.7 or 14.8 below, the non-terminating Party or non-breaching Party or the purchasing Party, respectively, shall thereafter be relieved of its obligations to display the other Party's trademarks on such Licensed Product Promotional Materials and labeling printed following such termination or purchase and, upon the exhaustion of any existing inventory of Licensed Product promotional materials and labeling following such termination, the license granted to the non-terminating Party or non-breaching Party or the purchasing Party, as the case may be, under Section 9.3(a) shall terminate. 9.4 TRADEMARK USE REQUIREMENTS. Prior to the use thereof, each Party shall provide to the other Party, through the Joint Project Team or the JCT or their designees and the JPC, a prototype of any Licensed Product Promotional Materials or labeling for Licensed Products which contain the other Party's trademarks (including any Product Trademark) for the purposes of the other Party's review of the manner in which its trademarks are used therein. The reviewing Party shall notify the other Party within ten (10) business days after delivery of such prototype, whether the reviewing Party approves or disapproves of the manner of such use and, in the case of disapproval, the specific reasons therefor and an acceptable alternative. In the event the reviewing Party fails to so notify the other Party within such ten (10) business day period, the reviewing Party shall be deemed to have approved of the manner of such use. In the event the reviewing Party disapproves of the manner of such use and the Parties are unable to reach agreement regarding the manner of such use, such dispute shall be resolved by the Parties in accordance with Article 16 below. Each Party shall permit one or more authorized representatives of the other Party, on reasonable prior notice, at reasonable intervals, during normal business hours and subject to normal safety and security procedures, to inspect and examine from time to time, Licensed Product Promotional Materials and labeling for Licensed Products and the records of such Party that are directly related to use of the other Party's trademarks, or to use of such Licensed Product Promotional Materials or labeling. Notwithstanding the above, the Parties shall not have the right to so inspect Licensed Product Promotional Materials and labeling for Licensed Products more often than once in any calendar year, unless a Party is in breach of this Section 9.4, in which case the other Party shall have the right to so inspect such materials and records with respect to such breach. 9.5 INFRINGEMENT OF TRADEMARKS. Each Party shall notify the JCT promptly upon learning of any actual, alleged or threatened infringement of any trademark, service mark or trade dress right applicable to a Licensed Product in the Territory, or of any unfair trade practices, trade dress imitation, passing off of counterfeit CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 51 goods, or like offenses in the Territory. Upon learning of such offenses from a Party regarding such potential or actual violation, the JPC shall confer with the Parties as to which Party and counsel should be assigned to defend the applicable rights. Subject to the overview of the JPC, the Party defending the Product Trademark or Antegren Trademark, as the case may be, shall take all reasonable and appropriate steps to protect, defend and maintain the Product Trademark and Antegren Trademark for use by the Parties in the Territory in connection with Antegren or, as applicable, other Licensed Product. The Parties shall cooperate in good faith with respect to all enforcement actions hereunder, and each Party shall notify the other Party promptly of all substantive developments with respect to such enforcement actions, including, but not limited to, all material filings, court papers and other related documents. Each Party shall consider the timely given, reasonable comments and advice of the other Party with respect to the strategy employed and submissions made relative to any such enforcement actions, and any disagreements shall be brought to the attention of the JSC for resolution. 9.6 COSTS OF DEFENSE OF TRADEMARKS. All of the costs, expenses and legal fees in bringing, maintaining and prosecuting any action approved by the JPC to protect or defend the Antegren Trademark or, as applicable, Product Trademark in the Territory, and any recovery, shall be included in the Other Out of Pocket Costs pursuant to Exhibit B. ARTICLE 10. CONFIDENTIALITY 10.1 CONFIDENTIALITY. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that, for the Term of this Agreement and for five (5) years thereafter, the receiving Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as permitted under this Agreement any Know-how and other information and materials furnished to it by the other Party pursuant to this Agreement (collectively, "Confidential Information"), except to the extent that it can be established by the receiving Party that such Confidential Information: (a) was already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the other Party; (b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party; (c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement; (d) was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others; or 52 (e) was subsequently developed by the receiving Party without use of the Confidential Information as demonstrated by competent written records. 10.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential Information of the other Party hereunder to the extent such disclosure is reasonably necessary in filing or prosecuting patent applications, prosecuting or defending litigation, making filings with Regulatory Authorities related to Licensed Product, or complying with applicable governmental regulations, provided that in making any such disclosure of the other Party's Confidential Information it will, except where impracticable for necessary disclosures, for example in the event of medical emergency, give reasonable advance notice to the other Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed. In addition, each Party shall be entitled to disclose, under a binder of confidentiality containing provisions substantially as protective as those of this Article 10 to the extent reasonably practicable, Confidential Information of the other Party to its Affiliates, consultants, clinical investigators, potential sublicensees and other Third Parties only for any purpose provided for in this Agreement. Nothing in this Article 10 shall restrict any Party from using for any purpose any Information developed by it during the course of the collaboration hereunder except as otherwise set forth in Section 10.5 and 10.6 and except that results of Development work related to Licensed Product, including but not limited to clinical trials of Licensed Product shall not be disclosed to any Third Party unless pursuant to a publication under Section 10.5, a press release under Section 10.6 or to Affiliates, consultants, clinical investigators, potential sublicensees and other Third Parties under an obligation to the disclosing Party to maintain the confidentiality of such Information and provided such Information is furnished for a purpose contemplated under this Agreement. 10.3 SURVIVAL. This Article 10 shall survive the termination or expiration of this Agreement for a period of five (5) years. 10.4 TERMINATION OF PRIOR AGREEMENT. This Agreement supersedes the Confidentiality Agreement between the Parties dated January 21, 1998, as modified by side letters exchanged between the Parties on February 4, 2000, but only insofar as such Confidentiality Agreement relates to the subject matter of this Agreement. All Confidential Information (as defined in such Confidentiality Agreement) exchanged between the Parties under such Confidentiality Agreement relating to the subject matter of this Agreement shall be deemed Confidential Information hereunder and shall be subject to the terms of this Article 10. 10.5 PUBLICATIONS. The Joint Project Team will determine the overall strategy for publication of results of clinical trials of Licensed Product and publication in support of such Licensed Products in the Territory. Except as required by law, each Party agrees that it shall not publish or present the results of Development work related to Licensed Product, including but not limited to, studies or clinical trials carried out by such Party as part of the collaboration under this Agreement without the opportunity for 53 prior review by the other Party and the approval of the Joint Project Team, Joint Commercialization Team or the JSC, as the case may be. Each Party shall provide to the other Party the opportunity to review any of the submitting Party's proposed abstracts, manuscripts or presentations (including information to be presented verbally) which relate to the Licensed Products or their use (including any proposed Third Party publication submitted to the submitting Party for review) at least thirty (30) days prior to their intended presentation or submission for publication, and such submitting Party agrees, upon written request from the other Party, not to submit such abstract or manuscript for publication or to make such presentation until the other Party is given up to forty-five (45) days from the date of such written request to seek appropriate patent protection for any material in such publication or presentation which it reasonably believes is patentable. Once such abstracts, manuscripts or presentations have been reviewed by each Party and have been approved for publication by the Joint Project Team, the Joint Commercialization Team, or the JSC, as the case may be, the same abstracts, manuscripts or presentations do not have to be provided again to the other Party for review for a later submission for publication. Expedited reviews for abstracts or poster presentations may be arranged if mutually agreeable to the Parties. Each Party also shall have the right to require that its Confidential Information that may be disclosed in any such proposed publication or presentation be deleted prior to such publication or presentation. In the event that either Party submits any manuscript or other publication relating to Antegren or other Licensed Product, it will consider and acknowledge the contributions of the other Party, including, as appropriate, co-authorship. 10.6 PUBLICITY REVIEW. The Parties agree that the public announcement of the execution of this Agreement shall be in the form of a draft press release attached to this Agreement as Exhibit F, and thereafter each Party shall be entitled to make or publish any public statement consistent with the contents thereof. Thereafter, Elan and Biogen will jointly discuss and agree, based on the principles of Section 10.5 and this Section 10.6, on any statement to the public regarding this Agreement or any aspect or term of this Agreement or any results of Development work subject in each case to disclosure otherwise required by law or regulation as determined in good faith by each Party. The principles to be observed by Elan and Biogen in such public disclosures will be: accuracy, the requirements for confidentiality under Article 10, the advantage a competitor of Elan or Biogen may gain from any public statements under this Section 10.6, and the standards and customs in the biotechnology and pharmaceutical industries for such disclosures by companies comparable to Elan and Biogen. The terms of this Agreement may also be disclosed to (a) government agencies where and to the extent required by law (and with appropriate requests made for confidential treatment), including filings required to be made by law with the Securities and Exchange Commission, the New York Stock Exchange, or any national securities exchange, (b) a Party's accountants or lawyers, or (c) Third Parties with the prior written consent of the other Party, which consent shall not be unreasonably withheld, so long as such disclosure is made under a binder of confidentiality (in the case of Third Parties), so long as highly sensitive terms and conditions such as financial terms are extracted from the Agreement or not disclosed upon the request of the other Party and the disclosing Party gives reasonable advance notice of the disclosure and the circumstances requiring the disclosure. 54 ARTICLE 11. OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS 11.1 Ownership of Intellectual Property. (a) Collaboration Inventions. All Know-how and Collaboration Inventions arising hereunder which constitute joint inventions by employees of Elan and Biogen will be owned jointly by Elan and Biogen, and each Party shall retain an undivided one-half interest in and to such Know-how and Collaboration Inventions, including, without limitation, any patents resulting therefrom, with full ownership rights in and to any field and including the right to license and sublicense, subject to the provisions of Sections 8.1 and 8.2 above. The laws of the U.S. with respect to joint ownership of inventions shall apply in all jurisdictions giving force and effect to this Agreement. Each Party shall solely own all Collaboration Inventions arising under, in furtherance of, and as a direct result of, that Party's activities under this Agreement which are made (meaning that they are conceived prior to or during the Term and experimentation has been initiated in the course of the activities contemplated hereunder) solely by its employees or jointly with a Third Party, subject to Sections 8.1, 8.2 and 8.3 above and, with respect to inventions for which patent applications are filed, subject to the provisions of Section 11.4(c) below. (b) Other Inventions. During the Term of this Agreement, and during the course of, in furtherance of, and as a direct result of the collaboration hereunder, inventions may be made (meaning that they are conceived prior to or during the Term and experimentation has been initiated in the course of the activities contemplated hereunder) by employees of either Party, solely or jointly, which are not Collaboration Inventions as defined herein and do not relate directly to any Licensed Product or use of Licensed Product in the Field ("Outside the Scope Invention"). Elan shall own all such Outside the Scope Inventions made (meaning that they are conceived prior to or during the Term and experimentation has been initiated in the course of the activities contemplated hereunder) solely by its employees or jointly by its employee and a Third Party, and Biogen shall own all such Outside the Scope Inventions made (meaning that they are conceived prior to or during the Term and experimentation has been initiated in the course of the activities contemplated hereunder) solely by its employees or jointly by its employee and a Third Party, in each case such Elan-owned and Biogen-owned Outside the Scope Inventions shall be subject to the provisions of Sections 8.1, 8.2 and 8.3 above, to the extent applicable. All such Outside the Scope Inventions made (meaning that they are conceived prior to or during the Term and experimentation has been initiated in the course of the activities contemplated hereunder) jointly by employees of Elan and Biogen will be jointly owned by Elan and Biogen, subject to Sections 8.1, 8.2 and 8.3. Each Party, at its sole discretion and responsibility, may file, prosecute and maintain patent applications and patents covering its solely owned Outside the Scope Inventions. For such Outside the Scope Inventions which are made jointly by employees of Elan and Biogen, the Parties shall, though the JPC, jointly decide on a patent application filing and prosecution strategy. 55 (c) Inventorship Procedure. The JPC shall within a reasonable time after the Effective Date establish a mutually agreeable procedure for determining inventorship of Collaboration Inventions, provided that such determination shall be made in accordance with applicable United States laws relating to inventorship. All such determinations shall be documented to ensure that any divisional or continuation patent applications reflect appropriate inventorship and that inventions and patent rights are assigned to the appropriate party. 11.2 DISCLOSURE OF PATENTABLE INVENTIONS. In addition to the disclosures required under Article 13 below, each Party shall provide to the other Party any invention disclosure submitted in the normal course of its business which discloses a Collaboration Invention. Such invention disclosures shall be provided to the other Party within thirty (30) days after the Party determines that an invention has been made. In the event patent applications are not filed on such invention disclosures by either Party, such invention disclosures shall be considered Know-how hereunder. 11.3 PATENT DUE DILIGENCE. Promptly after the Effective Date, each Party shall disclose to the other Party any patents or patent applications and corresponding file histories Controlled by the disclosing Party, as well as any Third Party patents or patent applications known to it, that claim or disclose Licensed Products, methods for their use, or processes relating to the manufacture thereof, and are relevant to the collaboration established hereunder. Each Party agrees to bring to the attention of the other Party in a timely manner any Third Party patent or patent application it discovers, or has discovered, and which relates to, and may materially affect, the operations to be conducted by or on behalf of the Parties under the collaboration. The cost of any freedom to operate searches and analyses with respect to Licensed Products, to the extent approved by the JPC, will be chargeable to the collaboration as Other Out of Pocket Costs, and the Parties will agree on an allocation of responsibilities between themselves regarding such searches and analyses. 11.4 Patent Filings. (a) Elan Patents. Decisions as to whether to file, prosecute and maintain, and in which countries to do so along with other strategic decisions relating thereto, shall be made by the Joint Patent Committee with respect to those Elan Patents which relate specifically to Licensed Product or the use of Licensed Product or the manufacture of Licensed Product, and by Elan with respect to all other Elan Patents. For purposes of clarity, it is understood that strategic decisions related to those Elan Patents that cover additional matter beyond that which relates specifically to Licensed Product are to be made by Elan. Elan shall use diligent efforts to prepare, file, prosecute and maintain all of the Elan Patents which are licensed hereunder, using patent counsel that is reasonably acceptable to Biogen. Solely with respect to any Elan Patents which relate specifically to Licensed Products or the use or manufacture of Licensed Product, Elan shall consult with the Joint Patent Committee on all material decisions related to preparation, filing, prosecution and maintenance of such Elan Patents, and shall use diligent efforts to implement the decisions made by the Joint Patent Committee. Elan shall give Biogen an opportunity to review and comment upon the text of the applications 56 relating to any and all Elan Patents before filing, shall consult with Biogen with respect to such application, and shall supply Biogen with a copy of the applications as filed, together with notice of its filing date and serial number whether such Elan Patents are filed prior to or after the Effective Date, as well as full copies of the prosecution history for those Elan Patents filed prior to the Effective Date. Elan shall keep Biogen advised of the status of the actual and prospective patent filings relating to any Elan patents and shall give Biogen an opportunity to review and comment on any material filing or correspondence proposed to be sent to any patent office. Elan shall also notify Biogen of the grant of any Elan Patents. Any disputes between the Parties related to the preparation, filing, prosecution and maintenance of any Elan Patents which relate specifically to Licensed Product or the use or manufacture of Licensed Product shall be brought to the attention of the Joint Patent Committee. Elan shall not cease the prosecution and/or maintenance of any Elan Patents in any country or elect not to file a patent application unless Biogen agrees to such action. (b) Biogen Patents. Decisions as to whether to file, prosecute and maintain, and in which countries to do so, along with other strategic decisions relating thereto, shall be made by the Joint Patent Committee with respect to those Biogen Patents which relate specifically to Licensed Product or the use of Licensed Product or the manufacture of Licensed Product, and by Biogen with respect to all other Biogen Patents. For purposes of clarity, it is understood that strategic decisions related to those Biogen Patents that cover additional matter beyond that which relates specifically to Licensed Product are to be made by Biogen. Biogen shall use diligent efforts to prepare, file, prosecute and maintain all of the Biogen Patents which are licensed hereunder, using patent counsel that is reasonably acceptable to Elan. Solely with respect to any Biogen Patents which relate specifically to Licensed Products or the use or manufacture of Licensed Product, Biogen shall consult with the Joint Patent Committee on all material decisions related to the preparation, filing, prosecution and maintenance of such Biogen Patents, and shall use diligent efforts to implement the decisions of the Joint Patent Committee. Biogen shall give Elan an opportunity to review and comment upon the text of the applications related to any and all Biogen Patents before filing, shall consult with Elan with respect to such application, and shall supply Elan with a copy of the applications as filed, together with notice of its filing date and serial number whether such Biogen Patents are filed prior to or after the Effective Date, as well as full copies of the prosecution history for those Biogen Patents filed prior to the Effective Date. Biogen shall keep Elan advised of the status of the actual and prospective patent filings related to any Biogen Patents and shall give Elan an opportunity to review and comment on any material filing or correspondence proposed to be sent to any patent office. Biogen shall also notify Elan of the grant of any Biogen Patents. Any disputes between the Parties related to the preparation, filing, prosecution and maintenance of any Biogen Patents which relate specifically to Licensed Product or the use or manufacture of Licensed Product shall be brought to the attention of the Joint Patent Committee. Biogen shall not cease the prosecution and/or maintenance of any such Biogen Patents in any country or elect not to file a patent application unless Elan agrees to such action. Notwithstanding the foregoing, Biogen shall be under no obligation to share with Elan, nor to cooperate with the JPC, on any Biogen Patents that are being challenged by Elan in a court or administrative proceeding. 57 (c) Collaboration Inventions. Upon the identification of a Collaboration Invention, the JPC shall (i) promptly discuss such Collaboration Invention, (ii) promptly discuss the desirability of filing a United States patent application covering such Collaboration Invention, as well as any foreign counterparts, (iii) make the final decision with respect to any such filings as soon as practicable, and (iv) designate the Party to be responsible for the supervision of the preparation, filing and prosecution of such patent application by outside patent counsel reasonably acceptable to the JPC which such responsible Party shall, unless the Collaboration Invention is jointly owned by the Parties, be the Party which owns such Collaboration Invention. Such outside patent counsel shall be instructed to act in the best interests of both Parties taking into consideration their relative interests under this Agreement. The Party responsible for the preparation, filing, prosecution and maintenance of Collaboration Invention Patent Rights shall consult with the Joint Patent Committee on all material decisions related to the preparation, filing, prosecution and maintenance of such Collaboration Invention Patent Rights, and shall use diligent efforts to implement the decisions of the Joint Patent Committee. The Party responsible for the preparation, filing and prosecution of Collaboration Invention Patent Rights shall provide the other Party with a copy of any patent application related to such Collaboration Invention Patent Rights prior to filing such applications in any jurisdiction for review and comment by the other Party, shall consult with the other Party with respect to such application, and shall supply the other Party with notice of its filing date and serial number. The Party responsible for each patent application shall keep the other Party advised of the status of the actual and prospective patent filings, including, without limitation, the grant of any Collaboration Invention Patent Rights, and shall provide advance copies of any official filings or correspondence related to the filing, prosecution and maintenance of such patent filings for review and comment by the other Party. Any disputes between the Parties related to the preparation, filing, prosecution and maintenance of Collaboration Invention Patent Rights shall be brought to the attention of the JPC for resolution. The Party responsible for a patent application shall not cease the prosecution and/or maintenance of any such Collaboration Invention Patent Rights in any country or elect not to file a patent application unless the JPC agrees to such action. Subject to (i) the grant of licenses to Biogen and Elan under Article 8, and (ii) the exclusivity provisions of Section 2.3, each Party shall be free to exploit its Collaboration Invention Patent Rights within the Territory without restriction. Anything in this Agreement to the contrary notwithstanding, a Party may choose to file, prosecute and maintain solely-owned Collaboration Inventions using its own internal patent attorneys. (d) Patent Term Extensions. The Parties shall cooperate, if necessary and appropriate, with each other in gaining patent term extensions, including without limitation, supplementary protection certificates and any other extensions that are now or become available in the future wherever applicable to Patents covering Licensed Products. The Parties shall, if necessary and appropriate, use reasonable efforts to agree upon a joint strategy relating to patent term extensions, but, in the absence of mutual agreement with respect to any extension issue, a patent shall be extended if either Party elects to extend such patent. All filings for such extension shall be made by the Party to whom the patent is assigned, provided, however, that in the event that the Party to whom the patent is assigned elects not to file for an extension, such Party shall (i) inform the 58 other Party of its intention not to file and (ii) grant the other Party the right to file for such extension. (e) Patent Filing Costs. All costs and expenses incurred after the Effective Date of filing, prosecuting, maintaining and extending those Elan Patents or Biogen Patents which related specifically to Licensed Product or to the manufacture or use of Licensed Product and all Collaboration Invention Patent Rights shall be treated as Other Out of Pocket Costs and shall be shared by the Parties as part of Reimbursable Commercial Costs in accordance with their respective Percentages as set forth in Section 6.2. Notwithstanding the foregoing, any expenses related to those Elan Patent Rights or Biogen Patent Rights that are not specifically related to Licensed Products shall not be shared by the Parties. 11.5 Patent Interferences. (a) Oppositions/Interferences Between The Parties. With respect to those interferences/oppositions listed on Schedule 11.5(a) and in the event that an interference is declared by the U.S. Patent and Trademark Office or an opposition exists between one or more patents or patent applications owned solely by Elan that are relevant to the collaboration, and one or more patents or patent applications owned solely by Biogen that are relevant to the collaboration, or any of the above and one or more patents or patent applications owned jointly by the Parties pursuant to the collaboration, and such declared interference or opposition does not involve any patents or patent applications owned by a Third Party, then the Parties shall in good faith establish within thirty (30) days hereof or of the declaration of such interference or opposition or such other time as agreed upon a mutually agreeable process to resolve such interference or oppositions in a reasonable manner in conformance with all applicable legal standards, but which prejudices neither Party nor diminishes the value of the Patents at issue therein, provided that, notwithstanding anything in this Section to the contrary, Elan shall withdraw its opposition to those claims of Biogen's EU use patent applicable to Alpha 4 Integrin antibodies and shall not institute any other opposition to such claims. Nothing in this Section 11.5(a) shall cause either Party to settle or withdraw an interference or opposition other than as to a patent claim specifically covering a Licensed Product, its manufacture or use. (b) Oppositions/Interferences With Third Parties. Other than as set forth in Section 11.5(a), all decisions relating to interferences or oppositions with respect to Collaboration Invention Patent Rights, including, without limitation, whether to initiate such interferences, whether to file oppositions, appropriate settlement strategy, along with other strategic decisions relating thereto, shall be made by the JPC. Each party shall control and have sole discretion, after consultation with the other Party and consideration in good faith of the other Party's comments, with respect to all decisions relating to interferences and oppositions relating to all species of intellectual property covered by this Agreement other than Collaboration Invention Patent Rights. (c) Oppositions/Interferences Costs. The Parties shall share the costs of any opposition or interference proceedings relating solely to Collaboration 59 Invention Patent Rights. No other costs arising out of any interference or opposition shall be shared between the Parties. 11.6 INITIAL FILINGS IF MADE OUTSIDE OF THE U.S. The Parties agree to use reasonable efforts to ensure that any patent filed outside of the U.S. prior to a U.S. filing will be in a form sufficient to establish the date of original filing as a priority date for the purposes of a subsequent U.S. filing. 11.7 Enforcement Rights. (a) Notification of Infringement. If either Party learns of any infringement or threatened infringement by a Third Party of Elan Patents, Biogen Patents or Collaboration Invention Patent Rights owned solely or jointly by the other Party, such Party shall promptly notify the other Party and shall provide such other Party with available evidence of such infringement. (B) ENFORCEMENT. (I) BIOGEN PATENTS. Within a reasonable time prior to Biogen bringing any action or proceeding with respect to infringement of any of the Biogen Patents, including any Collaboration Invention Patent Rights owned solely by Biogen, the Parties shall consult with the JPC to determine the best way for the Parties to proceed. If Elan elects, prior to the commencement of any such action (or as otherwise agreed), to join Biogen in such action because of the significance of the action to the future commercialization prospects for Licensed Products, the costs of patent enforcement shall be included in Other Out of Pocket Costs, and recovery from any settlement or judgment shall be shared by the Parties in accordance with their respective Percentages. Alternatively, if Elan decides by the date of commencement of any such action not to join Biogen in such action, Biogen shall have the right, but not the obligation, to institute, prosecute and control, at its own expense, any action or proceeding with respect to infringement of any of the Biogen Patents, by counsel of its own choice, and Elan shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. Any damages or other monetary awards recovered from settlement or judgment from an action to enforce a patent owned solely by Biogen for which Biogen paid its own expense under the preceding sentence shall be allocated first to reimburse the costs and expenses of Biogen, then to reimburse the costs and expenses, if any, of Elan, and any amounts remaining shall be paid to Biogen. (II) ELAN PATENTS. Within a reasonable time prior to Elan bringing any action or proceeding with respect to infringement of any of the Elan Patents, including any Collaboration Invention Patent Rights owned solely by Elan, the Parties shall consult with one another to determine the best way for the Parties to proceed. If Biogen elects, prior to the commencement of any such action (or as otherwise agreed), to join Elan in such action because of the significance of the action to the future commercialization prospects for Licensed Products, the costs of patent enforcement shall be included in Other Out of Pocket Costs and 60 recovery from any settlement or judgment shall be shared by the Parties in accordance with their respective Percentages. Alternatively, if Biogen decides by the date of commencement of any such action not to join Elan in such action, Elan shall have the right, but not the obligation, to institute, prosecute and control at its own expense any action or proceeding with respect to infringement of any of the Elan Patents, by counsel of its own choice, and Biogen shall have the right, at its own expense, to be represented in any such action by counsel of its own choice. Any damages or other monetary awards recovered from settlement or judgment from an action to enforce a patent owned solely by Elan for which Elan paid its own expense under the preceding sentence shall be allocated first to reimburse the costs and expenses of Elan, then to reimburse the costs and expenses, if any, of Biogen and any amounts remaining shall be paid to Elan. (III) JOINTLY-OWNED PATENTS. In the event of an infringement of a Patent jointly-owned by the Parties, the JSC, with the advice and counsel of the JPC, shall decide the best way for the Parties to proceed. If one Party brings any such action or proceeding, as approved by the JSC, the other Party agrees to be joined as a party plaintiff if necessary to prosecute the action or proceeding and to give the first Party reasonable assistance and authority to file and prosecute the suit. The costs of patent enforcement to enforce any such jointly-owned Patents shall be included in Other Out of Pocket Costs and recovery from any settlement or judgment shall be shared by the Parties in accordance with their respective Percentages. (c) Settlement with a Third Party. The Party that solely brings suit to enforce a given Elan Patent, Biogen Patent or Collaboration Invention Patent Right shall also have the right to control settlement of such claim; provided, however, that if one Party controls, no settlement shall be entered into without the written consent of the other Party. If there is no agreement between the Parties regarding such settlement, then the dispute will be resolved pursuant to Article 16 below. If the dispute is not resolved pursuant to Article 16, then the case may not be settled. 11.8 Third Party Patents. (a) Third Party Claims -- Course Of Action. If any of the Development, Commercialization or manufacturing activities actually conducted or to be conducted under this agreement become known to a Party hereto or are alleged by a Third Party to infringe a Third Party's Patent, misappropriate a Third Party's trade secret or violate a Third Party's trademark or other intellectual property, the Party becoming aware of such allegation shall promptly notify the other Party thereof, in writing, reasonably detailing the claim. (b) Negotiation With A Third Party. Under the circumstances described in paragraph (a), the JSC shall determine which Party, if any, shall negotiate with said Third Party for a suitable license or assignment and execute such license or assignment, provided, however, that such Party shall enter into no such agreement unless it has first obtained the other Party's written approval of the terms of such agreement, 61 including the amounts of any royalties or payments, which approval shall not be unreasonably withheld. If such negotiation results in a consummated agreement approved by both Parties, the executing Party shall make all payments to the Third Party and such payments shall be deemed Third Party License Fees for purposes of this Agreement and the paying Party shall be reimbursed for payment of such fees in accordance with Section 4.6(e) or as part of Reimbursable Commercial Costs under Section 6.2. (c) Third Party Suit. If a Third Party sues a Party (the "Sued Party") alleging that the Sued Party's or the Sued Party's sublicensees' Development, manufacture or Commercialization activities hereunder infringe or will infringe said Third Party's patent or misappropriate said Third Party's trade secret or Third Party's trademark or other intellectual property, then upon the Sued Party's request and in connection with the Sued Party's defense of any such Third Party suit, the other Party shall provide reasonable assistance to the Sued Party for such defense and shall join such suit if deemed a necessary party. The Sued Party shall keep the other Party, if such other Party has not joined in such suit, reasonably informed on a quarterly basis, in person or by telephone, prior to and during the pendency of any such suit. The Sued Party shall not admit the invalidity of any Patent nor settle any such suit, without written consent of the other Party, which consent shall not be unreasonably withheld. The Parties shall equally share in the reasonable litigation expenses, including settlement costs, royalties paid in settlement of any such suit, and the payment of any damages to the Third Party, other than Third Party License Fees which shall be paid pursuant to Section 4.6(e) or as part of Reimbursable Commercial Costs under Section 6.2. 11.9 Third Party Licenses. (a) In General. If either Party believes that there exists Third Party intellectual property that constitutes Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property, as the case may be, it shall notify the JPC. The JPC shall then determine whether or not such Third Party intellectual property constitutes Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property, as the case may be. If the determination of the JPC is affirmative, the Joint Project Team or the Joint Commercialization team, as the case may be, shall determine whether, on what terms (economic or otherwise), and by which Party (the "Licensing Party") such Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property, as the case may be, shall be licensed for the purposes of this Agreement. Prior to entering into a license agreement with respect to such Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property, as the case may be, the Licensing Party shall submit the proposed license agreement to the JSC for approval. If the JSC approves the proposed license agreement, the Licensing Party shall enter into such license agreement and shall pay the Third Party License Fees due thereunder, subject to reimbursement in accordance with Section 4.6(e) or as part of Reimbursable Commercial Costs under Section 6.2. Any agreement entered into pursuant to this Section 11.9(a) and any Elan In-License or other agreements between a Party and any Third Party existing as of the Effective Date and relating to Elan Patents, 62 Elan Know-how, Biogen Patents or Biogen Know-how, shall not be amended without prior written consent of the JSC. (b) Failure To Obtain License. If, within one hundred eighty (180) days after a Licensing Party has been instructed by the Joint Project Team or the Joint Commercialization Team, pursuant to Section 11.9(a), to attempt to enter into a license agreement with respect to Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property, as the case may be, it is determined by the JSC that no license is obtainable on commercially reasonably terms despite a good faith attempt by such Licensing Party to obtain such license, then (a) neither Party shall practice the Third Party intellectual property that was the subject of the proposed license agreement and (b) in the case of Blocking Third Party Intellectual Property only, neither Party shall proceed with the Development, Manufacture and/or Commercialization of any Licensed Product, as the case may be, to the extent doing so would infringe such Blocking Third Party Intellectual Property. (c) Failure To Reach Agreement. If the JPC is unable to reach a determination under Section 11.9(a) with respect to whether Third Party intellectual property constitutes Blocking Third Party Intellectual Property or Enhancing Third Party Intellectual Property, as the case may be, then such issue shall be presented to the JSC for determination. If the JSC is unable to resolve such issue, or is unable to reach a determination under Section 11.9(a) or this Section 11.9(c) with respect to any issue relating to a proposed license agreement, then such issue shall be evaluated in accordance with the procedures set forth in Article 16. If such issue cannot be resolved pursuant to Article 16, then (a) neither Party shall enter into a license agreement with respect to, nor practice, the Third Party intellectual property that is the subject of the unresolved dispute and (b) in the case of Blocking Third Party Intellectual Property only, neither Party shall proceed with the Development, Manufacture and/or Commercialization of a Licensed Product, as the case may be, to the extent that at least one of the Parties believes such activities would infringe such Blocking Third Party Intellectual Property. ARTICLE 12. REPRESENTATIONS AND WARRANTIES 12.1 REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby represents and warrants as of the Effective Date as follows: (a) This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms. The execution, delivery and performance of the Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it. (b) Such Party has not, and during the Term of the Agreement will not, grant any rights to any Third Party which would conflict with the rights granted to the other Party hereunder. 63 (c) That such Party has the right to grant the licenses granted herein. (d) It has no knowledge of any communication from a Third Party alleging that the Development, manufacture or Commercialization of Licensed Products has violated or would violate any of the intellectual property rights owned or controlled by such Third Party. (e) All of its employees and officers have executed agreements requiring assignment to the Party of all inventions made during the course of and as a result of their association with such Party and obligating the individual to maintain as confidential the confidential information of such Party. (f) To its knowledge, none of the data or information given to the other Party regarding Antegren is untrue or inaccurate. To its knowledge, there is no other data or information necessary to make the data and information provided to the other Party regarding Antegren complete and not misleading. (g) To its knowledge, there are no third party patents that would be or might be infringed by the Development, manufacture, use or sale of Licensed Product other than those that have been brought to the attention of the other Party. 12.2 ELAN REPRESENTATION REGARDING LONZA. Elan represents and warrants that the copy of the Lonza Supply Agreement, as amended through Amendment 17, supplied to Biogen is a true and accurate copy of the sole agreement in effect between Elan and Lonza related to Licensed Product as of the Effective Date, other than the letter agreement described in Section 7.1 and its attachments. ARTICLE 13. INFORMATION AND ADVERSE DRUG EVENTS AND REPORTS 13.1 INFORMATION. Biogen and Elan will disclose and make available to each other in a timely manner all preclinical, clinical, regulatory, commercial and other information concerning Licensed Products and constituting Know-how, including, without limitation, all Know-how relevant to the joint promotion of Licensed Products, known by Biogen or Elan at any time during the Term of this Agreement. Each Party will use Commercially Reasonable and Diligent Efforts to disclose to the other Party all significant information directly related to Licensed Products promptly after it is learned or its significance is appreciated. Notwithstanding the foregoing, neither Party shall be obligated to disclose to the other Party confidential information about its products other than Licensed Product. 13.2 COMPLAINTS. Each Party shall maintain a record of all non-medical and medical product-related complaints it receives with respect to any Licensed Product. Each Party shall notify the other Party of any complaint received by it in sufficient detail and in accordance with the timeframes and procedures for reporting established by the Joint Project Team and the Joint Commercialization Team, and in any event in sufficient time to allow the Party that holds the applicable regulatory filing to comply with any and 64 all regulatory requirements imposed upon it in any country. The Party that holds the applicable regulatory filing in a particular country shall investigate and respond to all such complaints in such country with respect to any Licensed Product as soon as reasonably practicable. All such responses shall be made in accordance with the procedures established by the Joint Project Team and the Joint Commercialization Team. The Party responsible for responding to such complaint shall promptly provide the other Party a copy of any such response. 13.3 ADVERSE DRUG EVENTS. Each Party will be responsible for the safety surveillance and pharmacovigilance regulatory obligations with respect to the Licensed Product in those territories where it is the sponsor of non-clinical or clinical development, including but not limited to animal toxicology or pharmacology studies, or where it is the license holder of the Licensed Product's Regulatory Approval. Each Party shall provide to the responsible Party under this Section with data on all adverse drug experience reports related to Licensed Product in each case in accordance with procedures established by the Joint Project Team or the Joint Commercialization Team or pursuant to an adverse event reporting agreement entered into by the Parties. Elan and Biogen agree to fulfill all their safety surveillance and pharmacovigilance regulatory obligations with respect to the Licensed Product. Where a joint venture entity is created by the Parties to be the license holder of the Licensed Product's Regulatory Approval, the joint venture shall designate one of the Parties to coordinate safety surveillance and pharmacovigilance activities. The Parties agree that the groups responsible for the safety surveillance and pharmacovigilance of the Licensed Product at each company shall meet within sixty (60) days following the Effective Date to develop detailed procedures regarding the format, timing, and content of the safety information to be exchanged between the Parties, and shall meet periodically thereafter to update the procedures. ARTICLE 14. TERM AND TERMINATION 14.1 Term and Purchase Terms Upon Expiration. (a) TERM. This Agreement shall commence as of the Effective Date. Unless sooner terminated as provided in this Article 14 and except as provided in Sections 14.1(b) and 14.7 below, the remaining provisions of this Agreement relating to activities in the Territory shall continue in effect until *** after the date of the First Commercial Sale of a Licensed Product in a Major Market Country (the "Term"). (B) PURCHASE TERMS UPON EXPIRATION. (I) Except as otherwise specified herein in the case of early termination of this Agreement, upon the expiration of the Term of this Agreement, either Party may propose that it purchase the other Party's interest in CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 65 this Agreement *** . Notice of a Party's desire to purchase the other Party's interest shall be given to the non-purchasing Party at least eighteen (18) months prior to the end of the Term. *** APPROXIMATELY 16 LINES OMITTED *** A closing on the purchase of the interest of one Party by the other Party shall take place upon expiration of the Term of this Agreement. If neither Party desires to purchase the other Party's interest, the Parties shall agree to extend this Agreement, including this provision, for a mutually agreed upon additional term. (II) In the event of a purchase under this Section (b) the following shall apply: (i) the non-purchasing Party shall have no further rights under the licenses provided to it under Article 8, (ii) the non-purchasing Party shall assign to the purchasing Party the non-purchasing Party's rights and obligations under any then existing licenses to Blocking Third Party Intellectual Property and Enhancing Third Party Intellectual Party for Licensed Products, (iii) the non-purchasing Party shall be deemed to have granted to the purchasing Party an exclusive worldwide license, with the right to grant sublicenses, under the non-purchasing Party's rights and interests in all Elan Patents and Elan Know-how (in the case of purchase by Biogen) or Biogen Patents and Biogen Know-how (in the case of purchase by Elan) solely to develop, use, make, have made, sell, have sold and import Licensed Products in the Field in the Territory. The non-purchasing Party shall retain all rights and interest in its own Patents and Know-how with respect to all products other than Licensed Products. In the event of a purchase under this paragraph (b), the non-purchasing Party shall, at the expense of the purchasing Party, transfer to the other Party ownership of any regulatory submissions (including, without limitation, all Clinical Trial Applications and Drug Approval Applications) and Regulatory Approvals then in its name for all Licensed Product, and shall notify the appropriate Regulatory Authorities and take any other action reasonably necessary to effect such transfer of ownership. If ownership of a regulatory submission or Regulatory Approval cannot be transferred to the purchasing Party in any country, the non-purchasing Party shall grant to the purchasing Party a permanent, exclusive and irrevocable right of access and reference to such regulatory submissions and Regulatory Approvals for Licensed Product in such country. If such right of access and reference is not sufficient to permit the purchasing Party to develop, make, market, use or sell Licensed Product, the non-purchasing Party shall provide the purchasing Party with the complete data package that the non-purchasing Party used in regulatory submissions in such country in order to allow the purchasing Party to receive Regulatory Approval in its own name. In the event of a purchase under this Section, the non-purchasing Party shall assign to the purchasing Party, at the expense of the purchasing Party, all of non-purchasing Party's right, title and interest in the Antegren Trademark and any Product Trademarks owned by non-purchasing Party, subject to the terms and conditions in Section 9.4 above. CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 66 14.2 Voluntary Termination by Either Party. (a) So long as such Party is not in breach of its obligations hereunder, either Party shall have the right to terminate this Agreement upon providing at least sixty (60) days' prior written notice to the other Party. In the event of termination under this Section 14.2, the following shall apply: (i) the terminating Party shall have no further rights under the licenses provided to it under Article 8, (ii) the terminating Party shall assign to the non-terminating Party the terminating Party's rights and obligations under any then existing licenses to Blocking Third Party Intellectual Property and Enhancing Third Party Intellectual Party for Licensed Products, (iii) the terminating Party shall be deemed to have granted to the non-terminating Party an exclusive worldwide license, with the right to grant sublicenses, under the terminating Party's rights and interests in all Elan Patents and Elan Know-how (in the case of termination by Elan) or Biogen Patents and Biogen Know-how (in the case of termination by Biogen) solely to develop, use, make, have made, market, sell, have sold and import Licensed Products in the Field in the Territory. The terminating Party shall retain all rights and interest in its own Patents and Know-how with respect to all products other than Licensed Products. A termination under this Section shall not relieve the terminating Party of any of its obligations to share in the Development Costs scheduled to be paid (meaning current obligations have been incurred and amounts are to be actually paid in the period) prior to the effective date of such termination under the then current Annual Workplan/Budget. In the event of termination under this Section, the terminating Party shall, at its cost, transfer to the other Party ownership of any regulatory submissions (including, without limitation, all Clinical Trial Application's and Drug Approval Applications) and Regulatory Approvals then in its name for all Licensed Product, and shall notify the appropriate Regulatory Authorities and take any other action reasonably necessary to effect such transfer of ownership. If ownership of a regulatory submission or Regulatory Approval cannot be transferred to the non-terminating Party in any country, the terminating Party shall grant to the non-terminating Party a permanent, exclusive and irrevocable right of access and reference to such regulatory submissions and Regulatory Approvals for Licensed Product in such country. If such right of access and reference is not sufficient to permit the non-terminating Party to file a Drug Approval Application and receive Regulatory Approval or to develop, make, market, use or sell Licensed Product, the terminating Party shall provide the non-terminating Party with the complete data package that the terminating Party used in regulatory submissions in such country in order to allow the non-terminating Party to file such Drug Approval Applications and receive Regulatory Approval in its own name. In the event that Biogen terminates this Agreement pursuant to this Section 14.2(a), Biogen shall assign to Elan, without cost to Elan, all of Biogen's right, title and interest in the Product Trademarks owned by Biogen, subject to the terms and conditions in Section 9.4 above. In the event that Elan terminates this Agreement pursuant to this Section 14.2(a), Elan shall assign to Biogen, without cost to Biogen, all of Elan's right, title and interest in the Antegren Trademark and other Product Trademarks owned by Elan, subject to the terms and conditions in Section 9.4 above. (b) In the event of termination of this Agreement by Biogen under this Section 14.2, the royalty payment obligations of Elan, shall be as follows: 67 (III) If Biogen terminates this Agreement prior to the date of enrollment of the first patient in the first Phase III Clinical Trial for a chronic indication, Elan shall pay to Biogen a royalty of *** (IV) If Biogen terminates this Agreement on or after the date set forth in Section 14.2(b)(i) above, but before the date of the First Commercial Sale of a Licensed Product in a Major Market Country after a Regulatory Approval of the use of a Licensed Product in a chronic indication, Elan shall pay to Biogen a royalty of *** (V) If Biogen terminates this Agreement on or after the date of the First Commercial Sale of a Licensed Product in a Major Market Country after a Regulatory Approval of the use of a Licensed Product in a chronic indication, Elan shall pay to Biogen a royalty of *** (c) In the event of termination of this Agreement by Elan under this Section 14.2, the royalty payment obligations of Biogen, shall be as follows: (I) If Elan terminates this Agreement prior to the date of enrollment of the first patient in the first Phase III Clinical Trial for a chronic indication, Biogen shall pay to Elan a royalty of *** (II) If Elan terminates this Agreement on or after the date set forth in Section 14.2(c)(i) above, but before the First Commercial Sale of a Licensed Product in a Major Market Country after a Regulatory Approval of the use of a Licensed Product in a chronic indication, Biogen shall pay to Elan a royalty of *** (III) If Elan terminates this Agreement on or after the date of the First Commercial Sale of a Licensed Product in a Major Market Country after a Regulatory Approval of the use of a Licensed Product in a chronic indication, Biogen shall pay to Elan *** (d) Prior to the effective date of such termination by one Party pursuant to this Section 14.3, the Parties shall enter into a definitive license agreement ("License Agreement") granting to the non-terminating Party (the "Licensing Party") an exclusive, worldwide, sublicensable license under all the terminating Party's rights and interests in Elan Patents and Elan Know-how (in the case of termination by Elan) and Biogen Patents and Biogen Know-how (in the case of termination by Elan) to develop, make, have made, use, market, distribute, import, offer for sale, sell and have sold Licensed Product in the Field, in consideration of the non-terminating Party paying royalties on Royalty-Bearing Sales of Licensed Product sold by the non-terminating Party and its Affiliates and sublicensees, at the royalty rate applicable under Section 14.2(a) or 14.2(b) above. Such License Agreement shall contain all of the provisions described in this Section 14.2, the terms described in CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 68 Section 14.3 below, the definitions set forth in this Agreement above with respect to Royalty-Bearing Sales and the other defined terms, and such other terms and conditions that are customary for similar types of transactions. (e) In the event that Biogen terminates this Agreement prior to initiation of the first Phase III Clinical Trial of Licensed Product, Biogen's sole obligation with respect to manufacture and supply of Licensed Product under this Agreement and the Clinical Supply Agreement shall be *** In the event of termination by either Party pursuant to this Section 14.2 after initiation of the first Phase III Clinical Trial, in addition to the obligations specified under paragraph (a) above, the terminating Party shall *** , in order to allow the other Party to find an alternate source of supply. The sole and exclusive amount to be paid by the non-terminating Party for supplies of Licensed Product under the preceding sentence during the period after termination shall be as follows:

Period following termination Amount to be Paid ---------------------------- ----------------- Up to *** *** *** months *** *** to *** *** months *** to *** *** months *** to *** *** months

In the event the terminating Party is obligated to continue to supply Licensed Product under this Agreement, the other Party shall use Reasonable Commercial and Diligent Efforts to identify one or more viable suppliers *** of termination and to transfer manufacturing operations as soon as commercially reasonable within the aforementioned *** time frame. In addition to the foregoing obligations, the terminating Party agrees to (i) make its personnel and other resources reasonably available to the other Party as necessary to effect an orderly transition of manufacturing, Development and/or Commercialization responsibilities, with the fully-loaded cost of such personnel and resources to be borne by the non-terminating Party after the effective date of termination; (ii) for a reasonable period of time *** continue to assist in a transition of responsibilities to the non-terminating party; and (iii) transfer copies of all relevant information, files or data CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 69 containing Know-how to the non-terminating party. Notwithstanding anything in the foregoing to the contrary, if the terminating Party is the supplying Party, the terminating Party will agree to perform technology transfer activities for a period of up to *** following execution by the non-terminating Party of an agreement with a new supplier, subject to the payment of costs as set forth in the preceding sentence. (f) Upon any termination under this Section 14.2, the Parties shall have no further rights or obligations under this Agreement except as set forth in this Section 14.2 and in Sections 14.3, 14.9 and 14.10. 14.3 Termination License Agreement Provisions. The License Agreement to be entered into between the Parties pursuant to Section 14.2 above or Sections 5.8 or 14.6 below shall contain the following terms and conditions in addition to those customary in license agreements in the biotechnology industry: (a) Date of Sale. The sales of Licensed Products shall be deemed to occur on the earlier of: (i) the date the Licensed Product is shipped; or (ii) the date of the invoice to the purchaser of the Licensed Product. (b) Royalties. Royalties shall be paid on Royalty-Bearing Sales of those Licensed Product sold by the licensee Party, its Affiliates and sublicensees in each calendar quarter and which (i) incorporate Know-how of the Party granting the license or (ii) the manufacture, use, offer for sale, sale or importation of which would, but for the licenses granted herein, infringe a valid claim of an issued patent within any Patents owned or controlled by the Party granting such royalty-bearing license hereunder. (c) One Royalty. The obligation to pay royalties under the License Agreement shall be imposed only once with respect to the same unit of Licensed Product, at the highest royalty rate applicable, regardless of the number of patents and patent applications pertaining thereto. (d) Royalty Payments. Royalty payments shall be made to the licensor Party or its designee quarterly within forty-five (45) days following the end of each calendar quarter for which royalties are due. Each royalty payment shall be accompanied by a report, described in subsection (j) below, summarizing the Royalty-Bearing Sales during the relevant calendar quarter. All royalty payments not made when due shall bear interest, calculated from the date such payment was due, at the rate of two percent (2%) over the prime rate of interest as published in the weekly Federal Reserve H.15 Bulletin, or any successor bulletin thereto. CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 70 (e) Term of Royalty Obligations. The licensee Party shall pay royalties to the licensor Party hereunder as to each Licensed Product in each country worldwide for the later of: (i) the expiration of the last to expire of any issued Patent owned or controlled by the licensor Party that covers such Licensed Product in such country or in the country of manufacture; or (ii) *** from the date of First Commercial Sale of such Licensed Product in such country following Regulatory Approval. Upon expiration of the royalty term for a Licensed Product in a country as described above, the licensee Party shall thereafter have an exclusive, paid-up irrevocable license to make, have made, use, market, sell, offer for sale, have sold and import such Licensed Product in that country. (f) Mode of Payment. All payments due shall be made in U.S. dollars via wire transfer of immediately available funds, or by such other commercially reasonable means as may be designated by the licensor Party, and shall be made where directed by the licensor Party from time to time. Royalty payments due on Royalty-Bearing Sales in countries or jurisdictions outside the U.S. shall be made in U.S. dollars, after being converted by the licensee Party into U.S. dollars at the rate of exchange for such country's or jurisdiction's currency in U.S. dollars as listed in The Wall Street Journal on the last business day of the calendar quarter in which such sales were made. (g) Taxes. If laws, rules or regulations require withholding of income taxes or other taxes imposed upon payments made to the licensor Party, the licensee Party shall make such withholding payments as required and subtract such withholding payments from the payments otherwise to be paid. (h) Blocked Currency. In each country where the local currency is blocked and cannot be removed from the country, royalties shall continue to be accrued in such country and Royalty-Bearing Sales in such country shall continue to be reported, but such royalties will not be paid until they may be removed from the country or at licensor Party's request, shall be paid in the local currency into a local bank designated by the licensor Party for the account of the licensor Party. If such royalties are accrued, then at such time as the licensee Party is able to remove currency from such country it shall also remove and pay the royalties accrued on the licensor Party's behalf. (i) Records. Any Party making royalty payments under the License Agreement, and its Affiliates and sublicensees, shall keep full, true and accurate books of account containing all particulars which may be necessary for the purpose of showing Royalty-Bearing Sales. Such books of account shall be kept at the principal place of business of such Party, its Affiliates or sublicensees, as the case may be. Such books and the supporting data shall be open at all reasonable times, for three (3) calendar years following the end of the calendar CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 71 year to which they pertain, to the inspection of an independent public accountant selected by the reviewing Party and reasonably acceptable to the other Party for the purpose of verifying Royalty-Bearing Sales under the License Agreement, subject to the provisions of subsection (k) below. (j) Reports. Along with the royalty payments due under the License Agreement, a Party making royalty payments hereunder shall deliver to the receiving Party a true and accurate report, which sets forth such particulars of the business conducted by the paying Party, its Affiliates and sublicensees during such preceding calendar quarter as are pertinent to an accounting for Royalty-Bearing Sales and deductible expenses. Such reports shall include at least the following: (i) the total gross sales of Licensed Products occurring during that calendar quarter, (ii) the allowable deductions therefrom, (iii) the total Royalty-Bearing Sales of Licensed Products occurring during that calendar quarter and (iv) the calculation of royalties, if any, due thereon pursuant to the License Agreement. (k) Auditing. At the request and expense of a Party receiving payments under the License Agreement, the other Party (and its Affiliates and sublicensees) shall permit an independent certified public accountant selected by the reviewing Party and reasonably acceptable to the Party being reviewed, to examine, not more than once in any four (4) consecutive calendar quarters during the term of the License Agreement, but including one post-termination audit, such books of account and records under subsection (i) above as may be necessary to: (i) determine the correctness of any report or payment made under the License Agreement; or (ii) obtain information as to any payment or reimbursement due for any relevant period in the case of the paying Party's failure to report, pay or reimburse pursuant to the License Agreement. Any such accountant shall enter into a confidentiality agreement with both Parties substantially similar to the confidentiality provisions of this Agreement limiting the disclosure and use of such information to the purposes germane to this subsection (k). Such examination shall be made at reasonable times during regular business hours and upon at least twenty (20) business days' prior notice. If such accountant reasonably determines that the royalties payable under the License Agreement have been, for any calendar year in total, understated by the paying Party, such paying Party shall immediately pay all understated royalties, together with interest on such royalties from the date accrued at a rate of two percent (2%) over the prime rate of interest as published in the weekly Federal Reserve H.15 Bulletin, or any successor bulletin thereto, and shall pay the reasonable costs of the examination if such paying Party has understated such royalties by more than the greater of *** . (l) Payments to or Reports by Affiliates and Sublicensees. Any payment required under any provision of the License Agreement to be made CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 72 to either Party or any report required to be made by any Party shall be made to or by an Affiliate or sublicensee of that Party if designated by that Party as the appropriate recipient or reporting entity. 14.4 Termination for Breach. (a) Material Breach. If either Party materially breaches this Agreement at any time, which breach is not cured within sixty (60) days of written notice thereof from the non-breaching Party (or if such breach is not susceptible of cure within such period, the breaching Party is not making diligent good faith efforts to cure such breach), the non-breaching Party shall have the right to terminate this Agreement. Upon such termination, the Parties shall have no further rights or obligations under this Agreement except as set forth in Sections 14.4(b), 14.5, 14.9 and 14.10 below. The Parties acknowledge and agree that failure to exercise any right or option with respect to any Licensed Product or to take any action expressly within the discretion of a Party shall not be deemed to be material breach hereunder. (b) Breaching Party Obligations. In the event of termination by a Party due to material breach by the other Party, in addition to the obligations specified in Section 14.6(a), the breaching Party shall: (i) remain responsible for its share of Development Costs scheduled to be paid (meaning current obligations have been incurred and amounts are to be actually paid in the period) during the period ending *** following termination under the Annual Workplan/Budget in effect on the effective date of termination, (ii) make its personnel and other resources reasonably available to the other Party as necessary to effect an orderly transition of Development and/or Commercialization responsibilities, with the reasonable cost of such personnel and resources to be borne by the non-breaching Party after the effective date of termination; (iii) for a reasonable period of time *** , assist in the transition of responsibilities to the non-breaching Party; and (iv) transfer all relevant information, files or data to the non-breaching Party. Notwithstanding anything in the foregoing to the contrary, if the breaching Party is the supplying Party, the breaching Party will agree to perform technology transfer activities for a period of up to *** following execution by the non-breaching Party of an agreement with a new supplier, subject to the payment of costs as set forth in the preceding sentence. In the event that Elan terminates this Agreement as a result of breach by Biogen prior to initiation of the first Phase III Clinical Trial of Licensed Product, Biogen's sole obligation with respect to manufacture and supply of Licensed Product under this Agreement and the Clinical Supply Agreement shall be to *** . In the event of termination by either Party pursuant to this Section 14.4 after initiation of the first Phase III Clinical Trial, in addition to the obligations specified under paragraph (a) above, the breaching Party shall remain responsible for supplying the amounts of Antegren or, as applicable, other Licensed Product, it was obligated to supply at the time of such termination (consistent with then current forecasts) for a reasonable period of time, *** in order to allow the other Party to find an alternate source of supply. The sole and exclusive amount to be CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 73 paid by the non-breaching Party for supplies of Licensed Product under the preceding sentence during the period after termination shall be as follows:

Period following termination Amount to be Paid ---------------------------- ----------------- Up to *** months *** *** months *** *** months ***

In the event the breaching Party is obligated to continue to supply Licensed Product under this Agreement, the other Party shall use Reasonable Commercial and Diligent Efforts to identify one or more viable suppliers *** of termination and to transfer manufacturing operations as soon as commercially reasonable within the aforementioned *** time frame. 14.5 Effect of Termination for Breach. (a) If either Party terminates this Agreement pursuant to Section 14.4 above the following shall apply: (i) the breaching Party shall have no further rights under the licenses granted to it under Article 8; (ii) the breaching Party shall assign to the non-breaching Party the breaching Party's rights and obligations under any then existing licenses to Blocking Third Party Intellectual Property and Enhancing Third Party Intellectual Property for Licensed Products; and (iii) the breaching Party shall be deemed to have granted to the non-breaching Party an exclusive, sublicensable, license in the Territory under the Elan Patents and Elan Know-how (where Elan is the breaching Party) and the Biogen Patents and Biogen Know-how (where Biogen is the breaching Party) to develop, make, have made, use, market, sell, offer for sale, have sold or import Licensed Products in the Field in the Territory. In the event of termination under this Section, the breaching Party shall, at its cost, transfer to the non-breaching Party ownership of any regulatory submissions related to Licensed Product (including, without limitation, all Clinical Trial Applications and Drug Approval Applications) and Regulatory Approvals then in its name to the non-breaching Party, and shall notify the appropriate Regulatory Authorities and take any other action reasonably necessary to effect such transfer of ownership. If ownership of a regulatory submission or Regulatory Approval cannot be transferred to the non-breaching Party in any country, the breaching Party shall grant to the non-breaching Party a permanent, exclusive and irrevocable right of access and reference to such regulatory submission and Regulatory Approvals for Licensed Product in such country. If such right of access and reference is not sufficient to permit the non-breaching Party to file a Drug Approval Application and receive Regulatory Approval or to develop, make, market, use or sell Licensed Product, the breaching Party shall provide CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 74 the non-breaching Party with the complete data package that the breaching Party used in regulatory submissions in such country in order to allow the non-breaching Party to file such Drug Approval Applications and to receive Regulatory Approval in its own name. If the non-breaching Party sells a Licensed Product under the license granted in this Section 14.5 that would, but for the license granted herein, infringe a claim of the Patents of the breaching Party, the non-breaching Party shall pay to the breaching Party a royalty equal to *** the applicable royalty determined by reference to Section 14.2(b) or (c) as if the breaching Party had terminated this Agreement under the terms of a License Agreement to be entered into between the Parties consistent with Section 14.2(d). (b) If this Agreement terminates pursuant to Section 14.4, the breaching Party shall assign to the non-breaching Party all of its right, title and interest in the Antegren Trademark and the other Product Trademarks. 14.6 BANKRUPTCY. Either Party may, in addition to any other remedies available to it by law or in equity, terminate this Agreement by written notice to the other Party in the event the other Party shall have become bankrupt, or shall have made an assignment for the benefit of its creditors or there shall have been appointed a trustee or receiver of the other Party or for all or a substantial part of its property or any case or proceeding shall have been commenced or other action taken by or against the other Party in bankruptcy or seeking reorganization, liquidation, dissolution, winding-up, arrangement, composition or readjustment of its debts or any other relief under any bankruptcy, insolvency, reorganization or other similar act or law of any jurisdiction now or hereafter in effect and any such event shall have continued for sixty (60) days undismissed, unbonded and undischarged. All rights and licenses granted under to this Agreement by one Party to the other Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as defined under Section 101 (56) of the Bankruptcy Code. The Parties agree that the licensing Party under this Agreement shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code in the event of a bankruptcy by the other Party as if the other Party were the terminating Party under Section 14.2. The Parties further agree that in the event of the commencement of a bankruptcy proceeding by or against one Party under the Bankruptcy Code, the other Party shall be entitled to complete access to any such intellectual property pertaining to the rights granted in the licenses hereunder of the Party by or against whom a bankruptcy proceeding has been commenced and all embodiments of such intellectual property. 14.7 Provisions For Change Of Control. (a) Change Of Control Notice. A Party subject to a Change of Control (the "Acquired Party") shall provide, where possible, written notice to the other Party (the "Non-Acquired Party") at least sixty (60) days prior to the Change of Control or, if earlier, as soon as the impending Change of Control can be disclosed to the Non- CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 75 Acquired Party. Within fifteen (15) days of the receipt of a written notice pursuant to this Section 14.7(a), the Chief Executive Officer of each Party shall meet to discuss the impact of any proposed Change of Control upon the collaboration and the commercial value of the Licensed Products and to discuss the possible nature of the relationship with the combined entity. (b) Certain Acquisition Rights Upon Change Of Control. In the event of a Change of Control, the Non-Acquired Party shall have the right, exercisable in accordance with this Section, to purchase the interest of the Acquired Party under this Agreement. Within thirty (30) days after receipt of the written notice required pursuant to Section 14.7(a), the Non-Acquired Party must give written notice to the Acquired Party of its own election to either (i) continue it obligations under this Agreement after the Change of Control or (ii) exercise its right to purchase the interest of the Acquired Party after the Change of Control. In determining whether to exercise its option to purchase the Acquired Party's interest in this Agreement, among other matters selected in its sole discretion, the non-Acquired Party shall consider any proposed post-Change of Control strategies and plans, commitments or guarantees respecting the Licensed Product presented by the Acquired Party. Notwithstanding the foregoing, the ultimate decision of whether to exercise its right under this Section will be at the sole discretion of the non-Acquired Party. In the event the Non-Acquired Party exercises its election to purchase the interest of the Acquired Party under this Agreement, the Parties shall *** APPROXIMATELY 15 LINES OMITTED *** (c) *** APPROXIMATELY 21 LINES OMITTED *** (d) Closing. Closing on the sale of Party's interest under this section shall take place within thirty (30) days of the determination under this Section as to the price and which Party will be the purchaser. (e) Rights and Obligations. The rights and obligations of each Party in the event of a purchase of a Party's interest under this Section shall be those specified under Section 14.1(b)(ii). (f) Confirmation. Within thirty (30) days after receipt of notice from the Non-Acquired Party of its interest to continue under the Agreement after a Change of Control, the Acquired Party shall provide to the Non-Acquired Party written confirmation reasonably satisfactory to the Non-Acquired Party to the effect that after such Change of Control, the Acquired Party will continue to meet its obligations under this Agreement and will commit to maintain sufficient resources in performing work under this Agreement consistent with the terms of this Agreement and the then current Development Plan, Annual Workplan/Budget or Commercialization Plan, and Annual Commercialization Plan/Budget, as applicable. CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 76 14.8 DISPOSITION UPON DIVESTITURE. If any governmental agency requires either Party (the "Divesting Party") (including, but not limited to pursuant to a consent decree) to divest its interest to any Licensed Products or this Agreement (the "Divested Asset(s)"), the Divesting Party shall provide written notice of such a requirement to the other Party within thirty (30) days of its first notice of such a condition that has been made final. The other Party shall have the right to purchase the Divesting Party's interest in the Divested Asset(s) for fair consideration. *** APPROXIMATELY 13 LINES OMITTED *** The rights and obligations of each Party in the event of a purchase of a Party's interest under this Section shall be those specified under Section 14.1(b)(ii). 14.9 SURVIVING RIGHTS. Except as modified above in Sections 14.1 (b), 14.2, 5.8, 14.4, 14.5 and 14.7, the obligations and rights of the Parties under Articles 10, 12, and 15 and Sections 8.6, 11.1, 11.2, 11.3, 11.4, and 14.10 of this Agreement will survive termination or expiration of this Agreement (in the case of Article 10 for the periods set forth therein). 14.10 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing before such expiration or termination. Any expiration or early termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement before termination, including, without limitation, the obligation to receive payments with respect to Licensed Product(s) sold before such termination. ARTICLE 15. INDEMNIFICATION 15.1 Indemnification in the Territory. (a) Each Party hereby agrees to save, defend and hold the other Party and its agents and employees harmless from and against any and all losses, damages, liabilities, settlements, penalties, fines, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) (collectively, the "Losses") resulting directly or indirectly from the use, handling, storage, sale or other disposition of Licensed Products sold or used in the Territory by the indemnifying Party, its Affiliates, agents or sublicensees, but only to the extent such Losses *** of the indemnifying Party or its employees and agents and do not also *** of the Party seeking indemnification. Any other Losses resulting directly or indirectly from the manufacture, use, handling, storage, sale or other disposition of Licensed Products in the Territory *** at the time such claim is finally determined, whether by judgment, award, decree or settlement. (b) In the event that either Party receives notice of a claim with respect to a Licensed Product in the Territory, such Party shall inform the other Party as CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 77 soon as reasonably practicable. The Parties shall confer on how to respond to the claim and how to handle the claim in an efficient manner. (c) In the event that a Party is seeking indemnification under Section 15.1 (a), it shall inform the indemnifying Party of a claim as soon as reasonably practicable after it receives notice of the claim, shall permit the indemnifying Party to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration), shall cooperate as requested (at the expense of the indemnifying Party) in the defense of the claim, and shall not settle or compromise the claim without the express written consent of the indemnifying Party. 15.2 INSURANCE. Beginning on the date that the first Licensed Product is first administered in a human clinical trial in any country in the Territory, Elan and Biogen shall each procure and maintain, at its own cost, the following insurance coverages: (a) Commercial General Liability, including coverage for products and completed operations (maintained for a period of at least *** years after the expiration or termination of this Agreement) and contractual liability (including coverage for advertising and personal injury). The policy shall have a limit of no less than *** each occurrence. (b) Foreign Local Coverage: Where required by law, foreign local coverages in an amount that, at a minimum, satisfies the legal requirements of that jurisdiction. (c) Policy Conditions: All policies under (a) and (b) above shall: (I) be written by insurance companies with an A.M. Best's rating of A:VIII or higher; and (II) provide that coverage under such policy shall not be suspended, voided, canceled, non-renewed, reduced in scope or limits below *** , except after thirty (30)-days written notice has been given to the other Party. Each Party shall name the other Party as an additional insured under such coverages and shall provide to the other Party a copy of the corresponding certificate of insurance reflecting such coverages. ARTICLE 16. DISPUTE RESOLUTION 16.1 DISPUTES. The Parties recognize that disputes as to certain matters may from time to time arise during the Term of this Agreement which relate to either CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 78 Party's rights and/or obligations hereunder. It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation. To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 16 if and when a dispute arises under this Agreement. Unless otherwise specifically recited in this Agreement, disputes among members of the Joint Project Team, the JCT, or the Joint Patent Committee will be resolved by submission to the JSC. Such submission shall occur within twenty (20) days of the date of the last meeting at which the Joint Project Team, the JCT or the Joint Patent Committee, as the case may be, was unable to resolve the issue. The JSC will hear the disputed matter in as timely a manner as possible. If the JSC is unable to reach a decision, such matter shall be referred for resolution to the Chief Executive Officer, Biogen and the Chief Executive Officer, Elan Corporation, plc (or such other officer exercising the duties of such office). In the event that a dispute is not resolved by the Chief Executive Officers within thirty (30) days of being requested by a Party to resolve the dispute and the dispute solely relates to physical product development, process development and/or manufacturing of Licensed Product, Biogen shall have final decision-making authority but will make such decision in good faith and consistent with Section 7.1(f); otherwise the matter shall be referred to mediation under Section 16.2. 16.2 MEDIATION. If a dispute arises between the Parties, and if such dispute cannot be resolved pursuant to Section 16.1 above, the Parties agree to try in good faith to resolve any dispute, controversy or claim (except as to any issue relating to intellectual property) arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, by non-binding mediation administered by the American Arbitration Association in accordance with its commercial mediation rules. Unless otherwise mutually agreed upon by the Parties, the mediation proceedings shall be conducted in New York. The Parties agree that they shall share equally the cost of the mediation, including filing and hearing fees, and the cost of the mediator(s). Each Party will bear its own attorneys' fees and associated costs and expenses. 16.3 ARBITRATION. If the Parties are unable to resolve a dispute through mediation under Section 16.2, they shall enter into arbitration under the terms of this Section. Within ten (10) days of delivery of notice from one Party to the other requesting arbitration under this Section, each Party shall select one expert in the field of drug development if the dispute relates to Development or drug commercialization if the dispute relates to Commercialization, to serve on an arbitration panel to decide the issue. The expert selected by a Party shall not be a past or present employee of or consultant to such Party or of any Affiliate of such Party. The members of the panel selected by the Parties shall, within five (5) days of their selection, select a third member to serve on the panel who shall not be a past or present employee of or consultant to either Party. If the members of the panel selected by the Parties cannot, within ten (10) days of their selection, agree on a third member, the Parties shall request that the American Arbitration Association ("AAA") select the third member who shall not be a past or present employee of or consultant of either Party or of any Affiliate of either Party. Each Party shall then have fifteen (15) days to submit to the panel and to the other Party a written response presenting such Party's position on the issue. The panel shall, within fifteen 79 (15) days after receipt of both Parties responses, hold a joint meeting on the issue at which each Party will have an opportunity to make a presentation and to respond to the other Party's presentation. Within fifteen (15) days of the conclusion of the meeting, the panel shall render its decision in writing. The decision of the panel shall be binding on both Parties. Each Party shall bear its own costs in connection with the arbitration proceedings, including the costs of the panel member selected by it. The costs of the third panel member will be shared equally. The arbitration shall be held in the United States and conducted under the rules of the AAA, except as otherwise expressly provided in this Section. 16.4 MATTERS TO PROCEED TO COURT . Notwithstanding the foregoing, any dispute relating to the determination of validity of a Party's Patents or other issues relating solely to a Party's intellectual property and any dispute asserting breach of this Agreement or of the representations and warranties made hereunder shall be submitted exclusively to the federal court in New York, and the Parties hereby consent to the jurisdiction and venue of such court. ARTICLE 17. MISCELLANEOUS 17.1 ASSIGNMENT. Neither this Agreement nor any right or obligation hereunder may be assigned or delegated, in whole or part, by either Party without the prior express written consent of the other, except as expressly set forth below in this Section 17.1. Notwithstanding the foregoing, either Party may assign this Agreement and its rights and delegate its obligations hereunder to any of its Affiliates or, with the written consent of the other Party which such consent shall not be unreasonably withheld, to a Third Party in connection with the transfer or sale of all or substantially all of its business relating to the subject matter of this Agreement (provided that any such assignment to a Third Party shall be deemed a Change in Control of the assigning Party for purposes of Section 14). 17.2 LEGAL COMPLIANCE. Each Party shall comply in all material respects with all laws, rules and regulations applicable to the conduct of its business in the Territory pursuant to this Agreement. 17.3 RETAINED RIGHTS. Nothing in this Agreement shall limit in any respect the right of either Party to conduct research and development with respect to, or market, any products that do not constitute Licensed Products in or outside the Field using such Party's own technology. 17.4 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be liable to the other Party for damages or losses on account of failure of performance by the defaulting Party if the failure is occasioned by government action, war, fire, explosion, flood, strike, peril of the sea, lockout, embargo, act of God, or any other cause beyond the control and without the fault or negligence of the defaulting Party, provided that the Party claiming force majeure has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a Party be required to settle any labor 80 dispute or disturbance. Such excuse shall continue as long as the condition preventing the performance continues. Upon cessation of such condition, the affected Party shall promptly resume performance hereunder. Each Party agrees to give the other Party prompt written notice of the occurrence of any such condition, the nature thereof, and the extent to which the affected Party will be unable to perform its obligations hereunder. Each Party further agrees to use all reasonable efforts to correct the condition as quickly as possible and to give the other Party prompt written notice when it is again fully able to perform its obligations. 17.5 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. 17.6 NO RIGHT TO USE NAMES. Except as otherwise provided herein, no right, express or implied, is granted by this Agreement to use in any manner the name "Elan," "Biogen" or any other trade name or trademark of a Party or its Affiliates in connection with the performance of this Agreement. 17.7 NOTICES. All notices hereunder shall be in writing and shall be deemed given if delivered personally or by facsimile transmission (receipt verified), telexed, mailed by registered or certified mail (return receipt requested), postage prepaid, or sent by express courier service, to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof). IF TO ELAN, ADDRESSED TO: ELAN PHARMA INTERNATIONAL LIMITED WIL House Shannon Business Park Shannon, County Clare Ireland Attention: President Telephone: 353-61-362-533 Telecopy: 353-61-362-010 with a copy to Elan Pharmaceuticals, Inc. Attention: President Telephone: (650) 877-0900 Telecopy: (650) 553 7165 IF TO BIOGEN, ADDRESSED TO: BIOGEN INC. 14 Cambridge Center Cambridge, MA 02142 Attention: Vice President - Business and Market Development 81 Telephone: (617) 679-2000 Fax: (617) 679-2804 with a copy to: Vice President - General Counsel Telephone: (617) 679-2000 Fax: (617) 679-2838 17.8 WAIVER. Except as specifically provided for herein, the waiver from time to time by either of the Parties of any of their rights or their failure to exercise any remedy shall not operate or be construed as a continuing waiver of the same or of any other of such Party's rights or remedies provided in this Agreement. Except as set forth in Article 16, nothing in this Agreement shall be construed to limit in any way either Party's rights and remedies in the event of breach by the other Party of any term of this Agreement or the failure of any representation or warranty by the other Party to be true and accurate when made. 17.9 SEVERABILITY. If any term, covenant or condition of this Agreement or the application thereof to any Party or circumstance shall, to any extent, be held to be invalid or unenforceable, then (a) the remainder of this Agreement, or the application of such term, covenant or condition to Parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law; and (b) the Parties hereto covenant and agree to renegotiate any such term, covenant or application thereof in good faith in order to provide a reasonably acceptable alternative to the term, covenant or condition of this Agreement or the application thereof that is invalid or unenforceable, it being the intent of the Parties that the basic purposes of this Agreement are to be effectuated. 17.10 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with, the laws of the State of New York without giving effect to principles of conflict of laws. 17.11 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authorized the ambiguous provision. 17.12 HEADINGS. All headings are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 17.13 COUNTERPARTS. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 17.14 ENTIRE AGREEMENT. This Agreement, including all Exhibits attached hereto which are hereby incorporated herein by reference, sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof and, 82 except as otherwise set forth herein, supersedes and terminates all prior agreements and understandings between the Parties. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties with respect to the subject matter hereof other than as set forth herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of the Parties. 17.15 INDEPENDENT CONTRACTORS. Both Parties are independent contractors under this Agreement. Nothing herein contained shall be deemed to create an employment, agency, joint venture or partnership relationship between the Parties or any of their agents or employees, or any other legal arrangement that would impose liability upon one Party for the act or failure to act of the other Party. Neither Party shall have any express or implied power to enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf of, the other Party, or to bind the other Party in any respect whatsoever. [This space is intentionally left blank.] 83 IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their proper officers as of the date and year first above written. ELAN PHARMA INTERNATIONAL LIMITED BIOGEN, INC. By: By: ------------------------------ ----------------------------------- Name: David J. Hurley Name: James C. Mullen Title: Director Title: President and Chief Executive Officer 84 EXHIBIT A Alpha 4 Integrin *** APPROXIMATELY 5 LINES OMITTED *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. EXHIBIT B FINANCIAL PLANNING, ACCOUNTING AND REPORTING FOR THE ELAN/BIOGEN ANTEGREN DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT This Exhibit B to the Antegren Development and Marketing Collaboration Agreement (the "Agreement") dated as of June 30,2000, between Elan Pharma International Limited and Biogen, Inc. ("Biogen") covers financial planning, accounting policies and procedures to be followed in determining Development Costs and Reimbursable Commercial Costs as well as in determining the applicable Transfer Price pursuant to the Agreement. For such purpose, this Exhibit B sets forth the principles for reporting actual results and budgeted plans in the Territory, the frequency of reporting, the use of a single "Functional Currency" (as defined in A.3 below) and the methods of determining payments to the Parties, auditing of accounts and other matters. This Exhibit B also provides agreed upon definitions of financial terms applicable to the Parties for purposes of the Agreement. All capitalized terms used herein without definition shall have the meanings ascribed thereto in the Agreement and, where applicable, the further definitions contained herein. References in this Exhibit B to a "Party" or "Parties" shall be construed to mean Biogen or Elan, as the case may be, and in every case shall be deemed to include a Party's Affiliates or permitted sublicensees under the Agreement. The contents of this Exhibit B are hereby incorporated into the Agreement and are governed by the terms and conditions of the Agreement, including the confidentiality provisions set forth therein. Notwithstanding anything in this Agreement to the contrary, no cost, expense, amount or sum allocable or chargeable to the Parties' activities hereunder shall be allocated or charged more than once. Unless otherwise specifically authorized by the Parties or this Agreement, all costs, expenses, amounts or sums to be charged or allocated by one Party to the other Party hereunder shall not be so chargeable or allocable unless they are both directly related to the Parties' collaboration under this Agreement and are reasonable and customary with respect to the global pharmaceutical industry considering the respective size and activities of the two Parties. A. DEFINITIONS, REPORT AND RECONCILIATION A.1. DEFINITIONS A.1.1. "ALLOCABLE OVERHEAD" shall mean costs incurred by a Party or for its account which are attributable to a Party's facilities and occupancy costs and its information systems, human relations and purchasing functions and which are allocated to company departments based on space occupied or headcount or other activity-based method consistently applied by a Party, or a standard rate if agreed to by the Parties. Allocable Overhead shall not include any costs attributable to general corporate activities including, by way of example, executive management, investor relations, business development, legal affairs and finance. A.1.2. "COST OF GOODS MANUFACTURED FOR SALE" shall mean a Party's costs to produce Clinical Supplies and/or Commercial Supplies of Licensed Product to the extent that such costs could be included as an inventory cost under U.S. GAAP plus the Cost of Capital Charge. A.1.3. "COST OF CAPITAL CHARGE" shall mean a cost of capital charge intended to allow the manufacturer to recover its cost of capital on those capital assets (direct and indirect) used in the manufacture and production of Licensed Product, based on percentage utilization of the facility in the manufacture of Licensed Product, as determined under U.S. GAAP, which shall be sufficient to provide a *** cost of capital rate of return on the gross book value of the asset over the life of the asset, provided, however, that the base of total capital assets on which the Cost of Capital Charge is calculated shall not exceed *** . For purposes of this Section A. 1.3, direct assets are those assets within and including the building where manufacturing takes place and/or directly used in the manufacturing process. Indirect assets include those assets used to support or facilitate manufacturing facilities, but not directly involved in the manufacturing process. A.1.4. "DEVELOPMENT COSTS" shall mean the costs and expenses associated with Development activities actually incurred by Biogen or Elan from March 1, 2000 through the later of (a) the date of the last Regulatory Approval obtained (including thereafter costs to maintain or expand such Regulatory Approval) in the Territory, or (b) the date of termination of Development of the final indication for which Regulatory Approval is to be sought in the Territory, provided that, with respect to the Initial Period, only Included Initial Period Costs, as defined in Section 4.6(c), shall be included. The costs and expenses associated with Development activities shall include those costs required to obtain, maintain and/or expand the authorization and/or ability to manufacture, formulate, fill, ship and/or sell Licensed Product in commercial quantities to Third Parties in the Territory. "Development Costs" shall also include, but are not limited to, costs of research or Development, including costs of studies on the toxicological, pharmacological, metabolical or clinical aspects of a Licensed Product conducted internally or by individual investigators or consultants and necessary for the purpose of obtaining, maintaining and/or expanding marketing approval of a Licensed Product, process development, process improvement and scale-up and recovery costs (including plant costs), validation costs, including qualification lots, the manufacture of Clinical Supplies of Licensed Product, costs for preparing, submitting, reviewing or developing data or information for the purpose of submission to a governmental authority to obtain, maintain and/or expand manufacturing and/or marketing approval of a Licensed Product and costs of marketing studies related to Licensed Product. "Development Costs" shall also include expenses for data management, statistical designs and studies, document preparation, and other administration expenses associated with the clinical testing program. In determining "Development Costs" chargeable under this Agreement, each Party will use its respective project accounting systems, and will CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 2 review and approve its respective project accounting systems and methodologies with the other Party. The Parties hereby agree that efforts of the employees of a Party or its Affiliates in performing its activities hereunder shall be charged as Development Costs at the applicable FTE Rate. Notwithstanding anything in this Section A. 1.4 to the contrary, only those Development Costs that are contemplated by the Development Plan and an Annual Workplan/Budget or were otherwise approved by the JSC shall be chargeable by a Party as Development Costs with any cost overruns treated in the manner set forth in Section 4.6(d) of the Agreement. All payments made by a Party to a Third Party in connection with the performance of its activities under the Development Plan and an Annual Workplan/Budget shall be charged as Development Costs at such Party's actual out-of-pocket cost. The costs of manufacturing Clinical Supplies of Licensed Product shall be charged as Development Cost in an amount equal to *** of the Cost of Goods Manufactured for Sale for such manufacture and supply. Except to the extent included in Cost of Goods Manufactured for Sale under the preceding sentence, expenses incurred by each Party for equipment, materials and supplies utilized in performing its activities under the Development Plan and an Annual Workplan/Budget shall not be separately charged as Developments Costs, except for those expenses incurred by a Party, with the prior written consent of the JSC as set forth in the Development Plan and Annual Workplan/Budget, in the purchase or making of equipment, materials or supplies (other than common laboratory supplies, e.g., pipettes, test tubes, petri dishes, reagents, and the like) that are to be used exclusively in connection with the performance of such Party's activities under a Development Plan and an Annual Workplan/Budget (e.g., laboratory animals, placebo supplies, etc.), which expenses shall be charged as Developments Cost at such Party's actual out-of-pocket expense incurred in purchasing or making such equipment, materials or supplies. A.1.5. "DISTRIBUTION COSTS" shall mean the FTE costs and other costs specifically identifiable or allocable to the distribution of Licensed Product by a Party and described in an Annual Commercialization Plan/Budget including order entry, billing, shipping, credit and collection and other such activities as approved by the JCT. For purposes of this definition, FTE costs shall be charged at the applicable FTE Rate. A.1.6. "GROSS SALES" shall mean the gross amount invoiced by either Party or their Affiliates or permitted sublicensees for sales of a Licensed Product to Third Parties in the Territory, subject to adjustment under Section 1.20 with respect to Combination Products. A.1.7. "MARKETING COSTS" shall mean the FTE costs and other costs of marketing, promotion, advertising, including, without limitation, costs for preparing and reproducing detailing aids, Licensed Product Promotional Materials and other promotional materials, costs of professional education, product related public relations, relationships with opinion leaders and professional societies, market research (before and after product approval), healthcare economics studies, Post-Approval Clinical Trials, CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 3 and other similar activities directly related to the Licensed Products, in each case as approved by the JCT as part of the Commercialization Plan and an Annual Commercialization Plan/Budget Such costs will include both internal FTE costs and outside services and expenses (e.g., consultants, agency fees, meeting costs, etc.). "Marketing Costs" shall also include activities related to obtaining reimbursement from payers, costs of sales and marketing data, the costs of manufacturing and distributing Samples to the extent a Sampling Program has been approved by the JCT and all activities reasonably related thereto. "Marketing Costs" will specifically exclude the costs of activities which promote either Party's business as a whole without being product specific (such as corporate image advertising) and costs already included as Sales Costs. For purposes of this definition, FTE costs shall be charged at the applicable FTE Rate. A.1.8. "NET SALES" shall mean Gross Sales of a Licensed Product less applicable Sales Returns and Allowances. A.1.9. "ONGOING DEVELOPMENT EXPENSE" shall mean FTE costs and other costs and expenses borne by either Party with respect to Phase IV Clinical Trials approved by the JCT and other expenses approved by the JCT associated with market positioning of a Licensed Product to the extent not otherwise included within Development Costs, Marketing Costs or Sales Costs. For purposes of this definition, FTE costs shall be charged at the applicable FTE Rate. A.1.10. "OTHER OUT OF POCKET COSTS" shall mean other operating expenses paid to Third Parties which are not part of Development Costs, Distribution Costs or other Reimbursable Commercial Costs, but are considered and approved by the Joint Project Team, the JCT and/or JSC as expenses for purposes of the cost sharing arrangements under the Agreement. Other Out-of-Pocket Costs shall be limited to the following: - Third Party License Fees (other than those related to the manufacture of Licensed Product which are to be included as part of Fully Absorbed Standard Costs) - Patent Costs and trademark costs (as limited by Articles 9 and 11 of the Agreement) - product liability insurance to the extent the Parties obtain a joint policy - indemnification costs (as defined in Article 15 of the Agreement) - other (to be approved by JSC) A.1.11. "PATENT COSTS" shall mean the fees and expenses paid to outside legal counsel and experts, and filing and maintenance expenses, incurred after the Effective Date, in connection with the establishment and maintenance of Collaboration Patent Rights and under Patents covering any Licensed Product (to the extent to be shared by the Parties under the Agreement), including, to the extent specified in Article 11 of the Agreement, costs of patent interference, reexamination, reissue, opposition and revocation proceedings. 4 A.1.12. "PRE-MARKETING EXPENSES" shall mean FTE costs and those out-of-pocket expenses incurred on a country-by-country basis and region-by-region basis, by either Party, other than Development Costs, before Regulatory Approval of Antegren or, as applicable, other Licensed Product, in such country, directly attributable to the carrying out of such Party's obligations under the Commercialization Plan or an Annual Commercialization Plan/Budget, as applicable, in preparation for Commercialization in such country. Such expenses may include, without limitation, costs incurred for professional education, Commercialization-related public relations, relationships with opinion leaders and professional societies, market research, health care economics studies, amounts paid Third Parties by a Party at reasonable rates pre-approved by the JSC, and establishment of the supply chain for the distribution and sale in such country, each to the extent allocable to Licensed Product and as described in the then current Commercialization Plan and an Annual Commercialization Plan/Budget. For purposes of this definition, FTE costs shall be charged at the applicable FTE Rate. A.1.13. "REIMBURSABLE COMMERCIAL COSTS" shall mean Distribution Costs, Marketing Costs, ongoing, Development Expense, Other Out of Pocket Costs and Sales Costs. A.1.14. "SALES COSTS" shall mean FTE costs and other costs approved by the JCT as part of the Commercialization Plan and an Annual Commercialization Plan/Budget and specifically identifiable to sales of Licensed Product in the Territory. Sales Costs shall include costs associated with Sales Representatives and training of the Sales Representatives, sales meetings, details, sales call reporting, work on managed care accounts, costs related to customer service and other sales and customer service-related expenses. Sales Costs will not include start-up costs associated with either Party's sales force, including recruiting, relocation and other similar costs. For purposes of this definition, FTE costs shall be charged at the applicable FTE Rate. A.1.15. "SALES RETURNS AND ALLOWANCES" shall mean the sum of (a) and (b), where: (a) is a provision, determined by a Party under U.S. GAAP for sales of Licensed Products in the Territory for (i) trade, cash and quantity discounts on Licensed Products (other than price discounts granted at the time of invoicing and which are already included in the determination of Gross Sales), (ii) credits or allowances given or made for rejection or return of, and for uncollectible amounts on, previously sold Licensed Products or for rebates or retroactive price reductions (including Medicare, Medicaid and similar types of rebates and chargebacks), (iii) taxes, duties or other governmental charges levied on or measured by the billing amount for Licensed Products, as adjusted for rebates and refunds, (iv) charges for freight and insurance directly related to the distribution of Licensed Products, to the extent included in Gross Sales, and (v) credits for allowances given or made for wastage replacement, indigent patient and any other sales programs agreed to by the Parties for Licensed Products; and (b) is a periodic adjustment of the provision determined in (a) to reflect amounts actually incurred by a Party in the Territory for items (i), (ii), (iii), (iv) and (v) in clause (a). The provision allowed in clause (a) and adjustments made in clause (b) (if any) will be reviewed by the Joint Commercialization Team and approved by the JSC. 5 It is the intention of the Parties that the interpretation of these definitions in this Exhibit B will be consistent with generally accepted accounting principles ("GAAP") in the U.S. If necessary, a Party will make the appropriate adjustments to the financial information it supplies under the Agreement to conform to the above format of reporting results of operation. A.2.1. REPORTING Each Party shall report to the other Party forecasts, budgets and actual results of operations related to the following: Development Costs Premarketing Expenses Marketing Costs Sales Costs Ongoing Development Expenses Other Out of Pocket Costs Gross Sales Net Sales Distribution Costs Sales Returns and Allowances Number of units sold Cost of Goods Manufactured for Sale Reporting by each Party will be performed as follows:

Reporting Event Frequency Timing of Submission - --------------- --------- -------------------- Actuals Quarterly Calendar Quarter end + 14 business days Forecasts Quarterly One month following Calendar Quarter end (four quarter rolling - by month) Preliminary Budgets Annually September 15 (one year - by month)

Reporting Event Frequency Timing of Submission - --------------- --------- -------------------- Final Budgets Annually October 31 (one year - by month) Long Range Plan Annually May 15 (current year plus 2 years)

6 In addition to the foregoing, beginning upon first launch if Licensed Product, on a monthly basis, the Distributing Party will supply the other Party with each month's Distribution Costs number of units sold and Gross Sales and Net Sales of Licensed Products in units, local currency and U.S. dollars (using the month-end rate for conversion for such month as shown in The Wall Street Journal) by country in the Territory according to the Distributing Party's sales reporting system, which shall be consistent with the definitions herein. Each such report shall be provided as early as possible, but no later than five (5) days after the last day of the month in question, and shall separately provide monthly and year-to-date cumulative figures. The financial representatives from the Parties will meet as appropriate but at least quarterly to review and approve the following: - actual results - forecasts - budgets - inventory levels - Sales Returns and Allowances - other financial matters, including but not limited to each Party's methodologies for charging costs and allocating Sales Representatives to activities related to Licensed Product for determination of actuals, forecasts, budgets and long range plans and the results of applying such methodologies. Costs included in Cost of Goods Manufactured For Sale are not subject to JSC approval as long as they are consistent with the definitions. A.2.2. RECONCILIATION STATEMENTS. Within fourteen (14) business days following the end of a Calendar Quarter, each Party shall submit to the other Party its report of actual results as outlined above (including a summary of charges and credits allocated to its Development Cost Project Account as referred to in Section 4.6(b)). Expenses charged by either Party as Development Costs or Reimbursable Commercial Costs shall not exceed *** of the amount included for the total expenditure in the then current Development Plan, Annual Workplan/Budget, Commercialization Plan or Annual Commercialization Plan/Budget, as the case may be, unless the Joint Project Team or JCT, as appropriate, recommends, and the JSC approves such excess expense. The financial representatives from each Party on the Joint Project Team or the Joint Commercialization Team, as applicable, shall be responsible for, within twenty one (21) days following the end of a Calendar Quarter, preparing a statement ("Reconciliation Statement") in a format agreed to by the Parties showing each Party's results, the calculations of Development Cost sharing under Section 4.6, the calculation of Reimbursable Commercial Cost sharing under Section 6.2, the application of credits available under Section 6.2, and any cash settlement required. The Reconciliation CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 7 Statement and reports of actual results compared to budget will be sent to the Joint Project Team or JCT, as applicable, within twenty one (21) days following the end of a Calendar Quarter. After approval by the Joint Project Team or JCT, as applicable, the Joint Project Team or JCT will forward the Reconciliation Statement to the JSC for its information or approval in the case of a dispute. The Reconciliation Statement shall be provided to the JSC thirty days prior to the date upon which the JSC shall meet to approve the Reconciliation Statement, if approval is being sought. Reconciliation Statements shall be made by Elan or Biogen in the manner set forth in Section A.5. A.3. "FOREIGN EXCHANGE" The "Functional Currency" for accounting for Gross Sales, Net Sales, Development Costs and Reimbursable Commercial Costs will be U.S. dollars. Except as the Parties otherwise mutually agree, for billing and reporting, the statement of operations will be translated into U.S. dollars at the rate of exchange listed in The Wall Street Journal on the last business day of the applicable calendar quarter, except for sales which will be translated using the average monthly rate of exchange listed in The Wall Street Journal. If, due to restrictions or prohibitions imposed by national or international authority, payments cannot be made as provided in this Section A.3, the Parties shall consult with each other with a view towards finding a prompt and acceptable solution, and the paying Party will deal with such monies as the other Party may lawfully direct at no additional out-of-pocket expense to the paying Party. A.4. AUDITS AND INTERIM REVIEWS Either Party shall have the right to request that a nationally recognized, independent accounting firm to be mutually agreed upon by the Parties and that is not either Party's independent accounting firm perform an audit or interim review of the other Party's books as they relate to the collaboration in order to express an opinion regarding such Party's compliance with generally accepted accounting principles. Such audits or review will be conducted at the expense of the requesting Party. Either Party shall have the right to request that a nationally recognized, independent accounting firm to be mutually agreed upon by the Parties and that is not either Party's independent accounting firm perform an audit of the other Party's books of accounts for the sole purpose of verifying compliance with the Agreement. Upon thirty (30) days prior written notice from a Party (the "Auditing Party"), the other Party (the "Audited Party") shall permit an independent certified public accounting firm of nationally recognized standing to be mutually agreed upon by the Parties and that is not either Party's independent accounting firm, to examine the relevant books and records of the Audited Party and its Affiliates as may be reasonably necessary to verify the reports and information submitted by the Audited Party and the accuracy of any reconciliation report. An examination by a Party under this Section shall occur not more than once in any calendar year and shall be limited to the pertinent books and records for any calendar year ending not more than *** before the date of the request. The accounting CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 8 firm shall be provided access to such books and records at the Audited Party's facility(ies) where such books and records are normally kept and such examination shall be conducted during the Audited Party's normal business hours. The Audited Party may require the accounting firm to sign a standard non-disclosure agreement with terms that are not inconsistent with the terms of this Agreement before providing the accounting firm access to the Audited Party's facilities or records. Upon completion of the audit, the accounting firm shall provide both Biogen and Elan a written report disclosing whether the reports submitted by the Audited Party are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to the Auditing Party. If the accountant determines that, based on errors in the reports so submitted, any report prepared in accordance with the Agreement is incorrect, the Parties shall promptly revise the report and the associated reconciliation report and any additional amount owed by one Party to the other shall be paid within thirty (30) days after receipt of the accountant's report, along with interest at the lesser of (i) the annualized interest rate of two percent (2%) over the prime rate then in effect at Fleet Bank or (ii) the highest rate permitted by applicable law from the date that such additional amount should have first been paid, provided, however, that no such interest shall be payable if the errors leading to the reconciliation report being incorrect were in the reports provided by the Party to receive such additional amount. Additionally, if the accountant determines that the reports submitted by the Audited Party overstate the Audited Party's share by more than *** , the Audited Party shall reimburse the Auditing Party for the expenses incurred by the Auditing Party in conducting the audit. A.5. PAYMENTS BETWEEN THE PARTIES Based upon the Reconciliation Statement, as approved by the Joint Project Team, the JCT or the JSC, as applicable, there shall be a cash settlement between the Parties no later than sixty (60) days after the end of each Calendar Quarter. In the event any payment is made after the date specified in the preceding sentence, the paying Party shall increase the amount otherwise due and payable by adding interest thereon, computed at the rate of prime (in effect at Fleet Bank) plus two percent (2%). If laws, rules or regulations require withholding of income taxes or other taxes imposed upon payments made by one Party to the other Party, the payor Party shall make such withholding payments as required and subtract such withholding payments from the payments otherwise to be made. The payor Party shall submit appropriate proof of payment of the withholding taxes to the payee Party within a reasonable period of time and shall cooperate with the payee Party in the event such Party claims exemption from such withholding, for example by providing copies of receipts of payment of such withheld tax or other documents reasonably available to the payor Party. A.6. COSTS OF BUILDING INVENTORY NECESSARY FOR LAUNCH The JCT shall agree on an inventory build-up plan for build-up of Commercial Supplies of Licensed Product in advance of launch on a country by country CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 9 basis. Elan shall purchase a percentage of pre-launch inventory prior to launch, in accordance with the inventory build-up schedule approved by the JCT, based on the intent of the Parties that they *** in the risk of the inventory build-up. B. FTE METHODOLOGY B.1. ACCOUNTING FOR DEVELOPMENT COSTS AND REIMBURSABLE COMMERCIAL COSTS All Development Costs, Pre-marketing Expenses, Marketing Costs, Sales Costs, Distribution Costs, Ongoing Development Expenses and Other Out of Pocket Costs will be based on the appropriate costs definition stated in Section A.1 of this Exhibit B. Each Party shall report Development Costs and Ongoing Development Expenses in a manner consistent with its project cost system (which shall track FTEs by functional area and by quarter) or using such other system as such Party applies with respect to its internal programs and which has been reviewed with the Joint Project Team. In general, these project cost systems shall report actual and/or allocable time spent on specific projects, apply the FTE Rates, determined in the manner specified below, capture actual and/or allocable costs of specific projects and allocate other expenses to projects. For Pre-marketing Expenses, Marketing Costs, Sales Costs and Distribution Costs and Other Out of Pocket Costs the Parties will allocate costs based on spending in the relevant departments or applying such other allocation methodology as such Party uses with respect to other products, and which shall be approved by the Joint Commercialization Team. B.2. FTE RATE The FTE Rate for both Parties for the remainder of 2000 will be ***. Thereafter, the JSC will set FTE Rates for each year in connection with approval of the applicable Annual Workplan/Budget for such year. FTE Rates will be set in a manner which fairly reflects the direct costs of each Party for the Direct Functional Groups specified below: Direct Functional Groups A. Research & Development shall include the following: - Research - Project Management - Preclinical - Market Development - Product Development/QA - Medical Research/Medical Operations/Clinical - Regulatory Affairs/Drug Safety CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. 10 - Manufacturing (not including production of Clinical and Commercial Supplies which will use the Production FTE Rate) B. Sales & Marketing shall include the following - Sales - Marketing - Customer Service Total budgeted expenses incorporated in the FTE Rate shall include and be limited to: - Salary, Overtime & Benefits - Other Personnel Costs - General Lab Supplies - Office Supplies - IS Hardware & Software - Maintenance & Repairs - Communications - Travel & Entertainment 11 EXHIBIT C *** EXHIBIT C HAS BEEN OMITTED IN ITS ENTIRETY (20 PAGES) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. EXHIBIT D *** EXHIBIT D HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. EXHIBIT E *** *** EXHIBIT E HAS BEEN OMITTED IN ITS ENTIRETY (41 PAGES) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. EXHIBIT F [NOTE: IN PLACE OF THE ORIGINAL DRAFT PRESS RELEASE, ATTACHED IS THE FINAL PRESS RELEASE ISSUED BY THE PARTIES ON AUGUST 17, 2000.] BIOGEN AND ELAN TO COLLABORATE ON DEVELOPMENT AND COMMERCIALIZATION OF ANTEGREN(R) (NATALIZUMAB) -First of New Class of Agents Currently in Phase 2 Clinical Trials- Cambridge, MA and Dublin, Ireland - 8/17/2000 - Biogen, Inc. (NASDAQ/BGEN) and Elan Corporation, plc (NYSE: ELN) today announced a worldwide, exclusive collaboration to develop, manufacture, and commercialize Antegren(R) (natalizumab), a humanized monoclonal antibody currently nearing completion of Phase 2 clinical testing for multiple sclerosis (MS) and Crohn's disease. Antegren represents the first of a new class of agents that has potential uses in a variety of diseases. Under the terms of the agreement, Biogen and Elan will work together to develop, manufacture, and commercialize Antegren. They will share costs for ongoing development activities and economic benefits from Antegren commercialization. The financial details of the agreement were not released, but they include upfront and milestone payments that recognize the value each party brings to the collaboration. James C. Mullen, Biogen's President and Chief Executive Officer, said, "We see Antegren as an important opportunity for several reasons. First, it is an exciting, late-stage product with blockbuster potential in a variety of diseases. Second, it is an excellent complement to AVONEX(R) (Interferon beta-1a), the world's leading therapy for MS. Used alone or in combination with AVONEX, Antegren will allow us to offer more solutions to a broader range of MS patients than are available at the present time. And third, both Biogen and Elan are pioneers in VLA-4 biology and the research, development, and marketing synergies between the companies should help us speed the process of bringing this drug to patients." Donal J. Geaney, Elan's Chairman and Chief Executive Officer, said, "We are delighted to have concluded arrangements with Biogen to collaborate in the development, manufacture, and eventual commercialization of Antegren. We believe that the technology and skills available from the two combined companies will be highly synergistic in the challenges of completing the development and successful introduction of this truly important product." Antegren, discovered and developed by Elan as part of its focus on neurological diseases, is a humanized monoclonal antibody and the first in a new class of potential therapeutics known as alpha 4 integrin inhibitors that are designed to block cell adhesion to blood vessel walls and subsequent migration of white blood cells into tissue. Antegren binds to the cell surface receptors known as alpha-4-beta-1 (VLA-4) and alpha-4-beta-7. These receptors are found on most types of white blood cells. Antegren may be useful in the treatment of a range of inflammatory and non-inflammatory diseases. Both Biogen and Elan are pioneers in the study of this pathway. Antegren demonstrated promising results in Phase 2 studies in MS reported during 1999 and encouraging data in separate trials with Crohn's disease and ulcerative colitis patients. In addition to historical information, this press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Reference is made in particular to statements regarding the potential and possible efficacy of Antegren. These statements are based on the Company's current beliefs and expectations as to such future outcomes. Drug development involves a high degree of risk. Success in early stage clinical trials does not ensure that later stage or larger scale clinical trials will be successful. Factors which could cause actual results to differ materially from the Company's current expectations include the risk that the product may not show therapeutic effect or an acceptable safety profile in subsequent trials or may not meet applicable regulatory standards, or that problems or delays may arise during clinical trials or in the course of the development, 2 testing or manufacturing of the product as well as the other risks and uncertainties described from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. Biogen, Inc., winner of the 1998 U.S. National Medal of Technology, is a biopharmaceutical company principally engaged in discovering and developing drugs for human healthcare through genetic engineering. Headquartered in Cambridge, MA, the Company's revenues are generated from U.S. and European sales of AVONEX(R) (Interferon beta-1a) for treatment of relapsing forms of multiple sclerosis, and from the worldwide sales by licensees of a number of products, including alpha interferon and hepatitis B vaccines and diagnostic products (Prescribing Information). Biogen's research and development activities are focused on novel products for multiple sclerosis, inflammatory, respiratory, kidney and cardiovascular diseases and in developmental biology and gene therapy. For copies of press releases and additional information about the Company, please consult Biogen's Homepage on the World Wide Web at http://www.biogen.com. Elan Corporation, plc. is a world leader in drug delivery and in the discovery, development and marketing of products and services in neurology, oncology and pain management. Elan's principal research and manufacturing facilities are in Ireland, the United States, and Israel. Elan shares trade on the New York, London and Dublin Stock Exchanges. 3 SCHEDULE 1.4 *** SCHEDULE 1.4 HAS BEEN OMITTED IN ITS ENTIRETY (7 PAGES) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. SCHEDULE 1.9 *** SCHEDULE 1.9 HAS BEEN OMITTED IN ITS ENTIRETY (7 PAGES) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. SCHEDULE 1.28 *** SCHEDULE 1.28 HAS BEEN OMITTED IN ITS ENTIRETY (10 PAGES) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. SCHEDULE 1.35 *** SCHEDULE 1.35 HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. SCHEDULE 1.37 *** SCHEDULE 1.37 HAS BEEN OMITTED IN ITS ENTIRETY (6 PAGES) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. SCHEDULE 4.6(c) *** SCHEDULE 1.4 HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. SCHEDULE 4.8 None SCHEDULE 7.1(B)(i) *** SCHEDULE 7.1(B)(i) HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. SCHEDULE 7.1(B)(ii) *** SCHEDULE 7.1(b)(ii) HAS BEEN OMITTED IN ITS ENTIRETY (3 PAGES)*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS(*) DENOTE SUCH OMISSIONS. SCHEDULE 11.5(a) *** SCHEDULE 11.5(a) HAS BEEN OMITTED IN ITS ENTIRETY (1 PAGE) *** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS (*) DENOTE SUCH OMISSIONS. EX-10.49 10 b45838biexv10w49.txt EX 10.49 LETTER AGREEMENT - J. MULLEN 2/15/02 Exhibit 10.49 BIOGEN - -------------------------------------------------------------------------------- FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 617-679-2000 FAX 617-679-2838 Roger H. Morley Chairman Compensation and Management Resources Committee Board of Directors February 15, 2002 Mr. James C. Mullen President & Chief Executive Officer Biogen, Inc. 14 Cambridge Center Cambridge, MA 02142 Dear Jim: As Chairman of the Compensation and Management Resources Committee (the "Committee") of the Board of Directors, I am pleased to confirm certain changes to your cash compensation and employee benefits that have been approved by the Committee within the recent past following your appointment as President and Chief Executive Officer of Biogen on June 16, 2000. 1. Target Bonus: Effective January 1, 2001, your incentive target bonus was established at 100% of your annual base salary. 2. Change of Control: You are considered a "Designated Employee" for purposes of Biogen's 1985 Non-Qualified Stock Option Plan (the "Stock Option Plan"). If at any time within two years following a Corporate Transaction (as defined in the Stock Option Plan), your employment with Biogen is terminated by Biogen other than for cause, then each outstanding option held by you will automatically accelerate so that the option immediately becomes fully exercisable and may be exercised for a period of one year following the termination of your employment or, if earlier, until the expiration of the option. Please read the Stock Option Plan for more details about the rights of a Designated Employee in the event of a Corporate Transaction and any applicable limitations. 3. Severance Benefits: You are entitled to severance benefits in the event your employment with Biogen is terminated by Biogen other than for cause. The severance benefits will be comprised of (i) a lump sum payment and (ii) upon completion of the appropriate forms, continuation of Biogen's portion of the expense of your participation in Biogen's group medical and dental insurance plans. The lump sum payment will be equivalent to 24 months of your annual base salary and your target annual performance bonus, as adjusted by application of your most recent individual performance incentive factor. The lump sum payment (less state and federal income and welfare taxes and other mandatory deductions under applicable laws) will be paid to you promptly following the termination of your employment with Biogen. Your Mr. James C. Mullen February 15, 2002 Page -2- participation in Biogen's group medical and dental insurance plans will continue until the earlier of the date you become eligible to participate in the medical and dental insurance plans of a third party employer or 24 months following the termination of your employment with Biogen; and only to the same extent such insurance is then provided to regular employees of Biogen. For purposes of this paragraph no. 3, "cause" means (i) your engagement in misconduct that is injurious to Biogen monetarily or otherwise, (ii) your conviction of a felony by a court of competent jurisdiction, (iii) your commission of any act of fraud or embezzlement relating to the property of Biogen, or (iv) your material violation of any obligations of confidentiality and nondisclosure owed to Biogen. Payment and provision of the severance benefits described above are conditioned on your execution of a general release in favor of Biogen, in form and substance reasonably acceptable to Biogen, in respect of any and all claims relating to your employment and the termination of your employment with Biogen. If you retire or terminate your employment with Biogen or Biogen terminates your employment for cause or you do not provide the requisite general release, then you shall not be entitled to receive the severance benefits described above. 4. Vacation: You are entitled to five weeks of vacation each year. 5. Life Insurance: You will have life insurance coverage equivalent to three times your annual base salary, subject to our satisfaction of normal medical standards of the issuer of the life insurance policy. 6. Tax Preparation: You are entitled to the preparation and/or review (including review of estimated taxes) of your annual Federal and state income tax returns, which currently is administered through PricewaterhouseCoopers LLC. The cost of this service is covered by Biogen. In addition to the above changes, the Committee recently approved executive ownership guidelines for Biogen Common Stock. As President and Chief Executive Officer, and pursuant to the guidelines, you are required to acquire and maintain ownership in Biogen Common Stock equivalent in value to eight times your annual base salary. Ownership is defined as shares of Biogen Common Stock held outright, held for your account under Biogen's 401(k) savings plan, and held in the Biogen employee stock purchase plan. In addition, ownership is also defined to include shares of Biogen Common Stock underlying unexercised vested stock options granted to you under the Stock Option Plan. You have a five-year period from the date of your appointment as President and Chief Executive Officer to comply with the ownership guidelines. The enhanced cash compensation and employee benefits described above are provided in lieu of 2 Mr. James C. Mullen February 15, 2002 Page -3- the benefits described in a letter dated March 18, 1993 addressed to you from Frank A. Burke, Jr. and, therefore, this letter supersedes and replaces the letter of March 18, 1993. Sincerely, /s/Roger H. Morley Roger H. Morley 3 EX-10.50 11 b45838biexv10w50.txt EX 10.50 LETTER AGREEMENT - J. MULLEN 3/06/03 EXHIBIT 10.50 EMPLOYMENT AGREEMENT THIS AGREEMENT by and between Biogen, Inc., a Massachusetts corporation (the "Company"), and James C. Mullen (the "Executive"), dated and effective as of March 6, 2003 (the "Effective Date"). WHEREAS, the Company wishes to provide for the employment by the Company of the Executive, and the Executive wishes to serve the Company, in the capacities and on the terms and conditions set forth in this Agreement; NOW, THEREFORE, it is hereby agreed as follows: 1. TERM. The term of this Agreement shall commence on the Effective Date and end on January 1, 2006 unless sooner terminated pursuant to Section 4 of this Agreement. This Agreement shall automatically be extended on each date (each an "Extension Date") beginning two years prior to the expiration of the original term for an additional day unless, not later than the day immediately preceding such Extension Date, the Company or the Executive shall have given written notice to the other that it does not wish to so extend the term of this Agreement. The original term ending on January 1, 2006 and additional periods of renewal are collectively referred to herein as the "Term." 2. POSITION AND DUTIES; STOCK OWNERSHIP. (a) During the Term, the Executive shall serve as the President and Chief Executive Officer of the Company and as the Chairman of the Company's Board of Directors (the "Board"), in each case with such duties and responsibilities as are customarily assigned to these positions, and such other duties and responsibilities not inconsistent therewith as may from time to time be assigned to him by the Board. During the Term, the Executive shall report solely to the Board, and all Company functions shall report, directly or indirectly, to the Executive. (b) During the Term, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote his full business attention and time to the business and affairs of the Company and shall use all reasonable efforts to carry out his responsibilities faithfully and efficiently. However, the Executive may, subject to the prior approval of the Board, serve on corporate, industry, civic or charitable boards or committees, so long as these activities do not interfere with the performance of the Executive's responsibilities to the Company. (c) During the Term, the Executive shall be based at the Company's principal executive offices, except for travel reasonably required for the performance of the Executive's duties hereunder. (d) The Executive shall continue to be subject to the executive stock ownership guidelines for Company common stock adopted by the by the Compensation and Management Resources Committee of the Board (the "Compensation Committee"). 3. COMPENSATION. (a) BASE SALARY. The Company shall pay the Executive an annual base salary (the "Annual Base Salary") at the rate of $900,000. The Annual Base Salary shall be paid in accordance with the Company's regular payroll practice for its senior executives, as in effect from time to time. Annual Base Salary shall be reviewed at least annually by the Board after consultation with the Executive and may from time to time be increased (but not decreased) as determined by the Board. Effective as of the date of any such increase the Annual Base Salary as so increased shall be considered the new Annual Base Salary for all purposes of this Agreement and may not thereafter be reduced. Any increase in Annual Base Salary shall not limit or reduce any other obligation of the Company to the Executive under this Agreement. No additional remuneration shall be paid to Executive with respect to his service on the Board during the Term. (b) ANNUAL CASH BONUS. For fiscal years during the Term, the Executive shall participate in annual cash incentive compensation plans, as adopted and approved by the Board or the Compensation Committee from time to time, with applicable corporate and individual performance targets and maximum award amounts determined by the Compensation Committee. The Executive's annual target bonus opportunity pursuant to such plans shall be 100% of the Annual Base Salary in effect for the Executive at the beginning of the fiscal year. Any cash bonuses payable to the Executive will be paid at the time the Company normally pays such bonuses to its senior executives and will be subject to the terms and conditions of the applicable annual cash incentive compensation plan. (c) LONG-TERM INCENTIVE COMPENSATION. During the Term, the Executive shall be eligible to receive long-term incentive compensation awards (which may consist of stock options, restricted stock, long-term cash awards or other forms of long-term incentive compensation) pursuant to the Company's equity and long-term incentive compensation plans and programs in effect from time to time. These awards shall be granted in the discretion of the Board or Committee and shall include such terms and conditions (including performance objectives) as the Board or Committee deems appropriate. (d) OTHER BENEFITS. During the Term, the Executive shall be eligible to participate in the retirement, welfare benefit, and fringe benefit plans, practices, policies and programs of the Company (including any medical, prescription, dental, disability, life insurance, accidental death and travel accident insurance plans and programs) to the same extent, and subject to the same terms and conditions, as these arrangements are made available to the senior officers of the Company. Without limiting the generality of the foregoing, the Executive shall (i) continue to be entitled to the supplemental life insurance coverage that the Company is currently providing to him (which provides him with coverage above the $1 million limit of the Company's group life insurance plan, up to a maximum of $4 million) and (ii) be provided with individual long term disability coverage, which will provide him a benefit equal to 70% of his Annual Base Salary if he is permanently disabled under the terms of the coverage (which coverage may contain an 2 offset for amounts payable to the Executive pursuant to the first sentence of Section 5(b) hereof). The Company shall also reimburse the Executive an amount in respect of any taxes imposed on him in connection with income imputed as a result of the long term disability coverage described in the preceding sentence such that, after payment of the taxes on such imputed income, there remains a balance sufficient to pay the taxes on the amount being reimbursed. For purposes of this payment, the Executive shall be deemed to pay federal and state income tax at the highest marginal rate. The Executive shall also be eligible to participate in the Company's Voluntary Executive Supplemental Savings Plan and the Company's Supplemental Executive Retirement Plan. The Company shall provide the Executive with an annual stipend of up to $50,000 for purposes of financial counseling and tax preparation, payable only in connection with the financial counseling and tax preparation services chosen by the Company. (e) VACATION; EXPENSES. The Executive shall be entitled to five weeks paid vacation per calendar year during the Term. The Company shall pay or reimburse the Executive for ordinary and necessary business expenses incurred by him in the performance of his duties in accordance with the Company's usual policies. 4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's employment shall terminate automatically upon the Executive's death during the Term. The Company shall be entitled to terminate the Executive's employment because of the Executive's Disability during the Term. "Disability" means that the Executive is permanently disabled within the meaning of the long-term disability coverage described in Section 3(d) or, if there is no such coverage in effect, that (i) the Executive has been substantially unable, for 120 business days within a period of 180 consecutive business days, to perform the Executive's duties under this Agreement, as a result of physical or mental illness or injury and (ii) a physician mutually selected by the Executive and the Company (with approval of such physician not unreasonably withheld or delayed), has determined that the Executive is permanently disabled. A termination of the Executive's employment by the Company for Disability shall be communicated to the Executive by written notice, and will be effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Time"). (b) TERMINATION BY THE COMPANY. (i) The Company may terminate the Executive's employment during the Term for Cause or without Cause. (ii) "Cause" means any of the following: (A) the Executive's conviction by a court of competent jurisdiction for felony criminal conduct, (B) the Executive's gross negligence or willful misconduct (unless the Executive believed in good faith that the act or omission was in or not opposed to the interest of the Company (without intent of the Executive to gain therefrom, directly or indirectly, a profit to which he was not legally entitled)), in either case 3 in the performance of his duties hereunder that results in a detriment that is material to the Company and its subsidiaries taken as a whole, or (C) the Executive's willful or intentional material breach of Section 6 of this Agreement or of the Employee's Proprietary Information and Inventions Agreement executed by the Executive on May 5, 1989 that results in detriment that is material to the Company and its subsidiaries taken as a whole. Notwithstanding the forgoing, Cause shall not include any act or omission of which the Audit Committee of the Board (or the full Board) has had actual knowledge for at least six months without asserting that the act or omission constitutes Cause. (iii) A termination of the Executive's employment for Cause shall be not be effective unless it is accomplished in accordance with the following procedures. The Board shall give the Executive written notice ("Notice of Termination for Cause") of its intention to terminate the Executive's employment for Cause, setting forth in reasonable detail the specific conduct of the Executive that it considers to constitute Cause and the specific provision(s) of this Agreement on which it relies, and stating the date, time and place of the Special Board Meeting for Cause. The "Special Board Meeting for Cause" means a meeting of the Board called and held specifically and exclusively for the purpose of considering the Executive's termination for Cause. The Special Board Meeting for Cause must take place not less than thirty business days after the Executive receives the Notice of Termination for Cause. The Executive shall be given an opportunity, together with counsel, to be heard at the Special Board Meeting for Cause. The Executive's termination for Cause shall be effective when a resolution is duly adopted at the Special Board Meeting for Cause stating that, in the good faith opinion of at least two-thirds of the members of the Board (other than the Executive), the Executive is guilty of the conduct described in the Notice of Termination for Cause and that such conduct constitutes Cause under the applicable provision of this Agreement. A failure by the Company to follow the provisions of this Section 4(b)(iii) shall result in the termination of the Executive's employment being conclusively deemed to be a termination by the Company without Cause. (iv) Any termination of the Executive's employment without Cause by the Company shall be effected by giving the Executive at least thirty days written notice of the termination. (c) TERMINATION BY THE EXECUTIVE. (i) The Executive may terminate employment for Good Reason or without Good Reason. (ii) "Good Reason" shall mean the occurrence of any of the following events, without the Executive's consent, at any time during the Term: (A) the Executive is not elected to the Board of Directors, named as Chairman and designated Chief Executive Officer of the Company; (B) causing or requiring the 4 Executive to report to anyone other than the Board; (C) denial of the Executive of the ability to appoint and remove the executive employees of the Company (other than executive employees responsible for compliance or internal or disclosure controls); (D) a relocation of the Company's principal executive offices outside of the metropolitan Boston area; or (E) a reduction of the Annual Base Salary under Section 3(a) or material failure to pay benefits provided or referred to under this Agreement, unless any such action under this subclause (E) is remedied by the Company within ten days after receipt of notice thereof given by the Executive. (iii) "Good Reason" shall also mean the occurrence of any of the following events, without the Executive's consent, at any time on or after a Change in Control: (A) the assignment to the Executive of any duties inconsistent in any material respect with his position, authority, duties or responsibilities as contemplated by this Agreement, or any other action by the Company which results in a significant diminution in such position, authority, duties or responsibilities, unless the action is remedied by the Company within ten days after receipt of notice thereof given by the Executive; or (B) the failure of the Company to assign this Agreement to a successor to the Company or failure of a successor to the Company to explicitly assume and agree to be bound by this Agreement. (iv) A termination of employment by the Executive for Good Reason shall be effected by giving the Company written notice ("Notice of Termination for Good Reason") of the termination, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provision(s) of this Agreement on which the Executive relies. A termination of employment by the Executive for Good Reason shall be effective ten days following the date when the Notice of Termination for Good Reason is given, unless the event constituting Good Reason is remedied by the Company prior to that date. Actions by the Company which constitute Good Reason shall be disregarded in the calculation of termination benefits described in Section 5. An event shall not be deemed to constitute Good Reason if the Executive fails to deliver Notice of Termination for Good Reason within six months of his actual knowledge of the event. (v) A termination of the Executive's employment by the Executive without Good Reason shall be effected by giving the Company 30 days written notice of the termination. (d) DATE OF TERMINATION; RESIGNATION. The "Date of Termination" means the date of the Executive's death, the Disability Effective Time or the date on which the termination of the Executive's employment by the Company for Cause or without Cause or by the Executive for Good Reason or without Good Reason is effective. Following termination of the Executive's employment for any reason, the Executive shall immediately resign from the Board and from all other offices and positions he holds with the Company and its subsidiaries. For the avoidance of doubt, a 5 delivery of notice of non-renewal of the Term by the Company shall not be deemed to be a termination with or without Cause by the Company, nor shall it be an event of Good Reason. 5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) OTHER THAN FOR CAUSE, DEATH OR DISABILITY, OR FOR GOOD REASON. If, during the Term, the Company terminates the Executive's employment for any reason other than for Cause or due to his Disability, or the Executive terminates his employment for Good Reason, then the Company shall pay to the Executive, not later than thirty days following the Date of Termination, (i) a cash lump sum equal to two times the sum of the Executive's Annual Base Salary immediately prior to the Date of Termination and the Executive's annual target bonus for the fiscal year in which the Date of Termination occurs; and (ii) any unpaid amounts of the Executive's Annual Base Salary and annual bonus for periods prior to the Date of Termination. The Company shall also provide to the Executive (and, as applicable, his eligible dependents), in the event of such a termination continued participation in the Company's medical and dental insurance plans (or substantially equivalent coverage under an alternative arrangement) as well as continued supplemental life insurance coverage for the lesser of twenty-four months following the Date of Termination or until the Executive is provided by another employer with benefits (determined on a benefit by benefit basis) substantially comparable (with no applicable preexisting condition or eligibility limitations) to the benefits provided by the corresponding Company plan. The statutory health care continuation coverage period for the Executive under Section 4980B of the Code will commence at the end of such twenty-four month period. For each year that the Company provides for benefit continuation coverage under this Section 5(a), the Executive shall be entitled to receive a supplemental payment in an amount such that after payment of all employment related taxes on the continued coverage, there remains a balance sufficient to pay the employment related taxes being reimbursed. For purposes of this Section 5(a), "employment related taxes" means the incremental federal and state income and payroll taxes payable by the Executive or the Executive's spouse with respect to any applicable item of income. (b) DEATH AND DISABILITY. If the Executive's employment is terminated by reason of Disability during the Term, the Company shall pay to the Executive, not later than thirty days following the Date of Termination, a cash lump sum equal to the sum of the Executive's Annual Base Salary immediately prior to the Date of Termination and the Executive's annual target bonus for the fiscal year in which the Date of Termination occurs. The Company shall also pay to the Executive, in the event of a termination due to the Executive's death or Disability, any unpaid amounts of the Executive's Annual Base Salary and annual bonus for periods prior to the Date of Termination. In addition, if the Executive's employment is terminated due to death or Disability, all of the Executive's then outstanding options to purchase shares of Company common stock, whether or not previously vested and exercisable, shall be immediately vested and exercisable upon the Date of Termination and shall remain exercisable until 6 the earlier of (i) the expiration of the maximum term of the option and (ii) the one year anniversary of the Date of Termination. (c) BY THE COMPANY FOR CAUSE; BY THE EXECUTIVE OTHER THAN FOR GOOD REASON. If the Executive's employment is terminated by the Company for Cause or the Executive voluntarily terminates employment other than for Good Reason then, (i) the Company shall pay to the Executive in a lump sum in cash within thirty days after the Date of Termination, any portion of the Executive's Annual Base Salary and bonus earned through the Date of Termination that has not been paid and (ii) all outstanding equity awards shall be treated according to the provisions of the plan and agreements under which such awards were granted. (d) MITIGATION; FULL SETTLEMENT. Following termination of the Executive's employment with the Company, the Executive shall be under no obligation to seek reemployment and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment that he may obtain except as specifically provided in this Agreement. Any amounts due under this Section 5 are in the nature of severance payments considered to be reasonable by the Company and are not in the nature of a penalty. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including set-off, counterclaim, recoupment, defense or other claim, right or action that the Company may have against Executive or others. (e) RELATIONSHIP TO OTHER BENEFITS. The Executive's benefits under this Agreement shall be in addition to any other amount earned, accrued or owing but not yet paid under any plan, program, arrangement or understanding covering the Executive. (f) EXCISE TAX. (i) If any payments or benefits (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement of the Executive with the Company or any person affiliated with the Company) (the "Payments") received or to be received by the Executive will be subject to the tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or any similar tax that may hereafter be imposed), then except as set forth in Section 5(d)(ii), the Company shall pay to the Executive an additional amount (the "Gross-Up Payment"). The Gross Up Payment shall be an amount which, when combined with the net amount of the Payments retained by the Executive (giving effect to the application of the Excise Tax and all other applicable taxes on the Payments) will result in the net amount received by the Executive equaling the net amount of the Payments the Executive would have received absent application of the Excise Tax. 7 (ii) Notwithstanding the provisions of Section 5(f)(i), if the Payments that will be subject to the Excise Tax exceed by $100,000 or less the amount of such Payments that the Executive could receive without having any Payments become subject to the Excise Tax, then the amount of such Payments shall be reduced to the extent necessary so that no portion of the Payments is subject to the Excise Tax. (iii) The process for calculating the Excise Tax, determining the amount of any Gross-Up Payment and other procedures relating to this Section 5(f) are set forth in Appendix A. 6. COMPETITION. (a) Except as set forth below, during the Executive's employment with the Company and for a period of one year after the termination of the Executive's employment with the Company (whether at the end of the Term or thereafter), the Executive shall not, without the prior written consent of the Board, directly or indirectly engage in the development, production, marketing, or sale of products that compete (or, upon commercialization, could compete) with products of the Company being developed, marketed or sold as of the date of such termination (such business or activity, a "Competing Business") whether such engagement shall be as an officer, director, owner, employee, partner, consultant, advisor or any other capacity. Notwithstanding the foregoing, with respect to any termination of the Executive's employment on or following the occurrence of a Change in Control, the one year period described above shall be reduced to six months. Nothing herein will prohibit the Executive from acquiring or holding not more than one percent of any class of publicly traded securities of any business. (b) The Executive agrees that the restrictions set forth in Section 6(a) hereof are reasonable and necessary to protect the legal interests of the Company. The Executive further agrees that the Company shall be entitled to injunctive relief in the event of any actual or threatened breach of the restrictions and shall not be required to post bond or prove actual damages. If the scope or content of any restriction contained in this Agreement is too broad to permit enforcement of such restriction to its full extent, then the restriction shall be enforced to the maximum extent permitted by law, and the parties hereby consent that the scope or restriction shall be judicially modified accordingly in any proceeding brought with respect to the enforcement of the restriction. 7. INDEMNIFICATION. (a) The Company agrees that if the Executive is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "Proceeding"), by reason of the fact that he is or was a director or an officer of the Company or is or was serving at the request of the Company as a director or officer of another corporation, including, without limitation, any corporation or other entity of which a majority of any class of 8 equity security is owned, directly or indirectly, by the Company or any Affiliate of the Corporation (as such term is defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended), or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director or officer, or in any other capacity while serving as a director or officer, the Executive shall be indemnified and held harmless by the Company to the fullest extent authorized by the Massachusetts Business Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment), against all expense, liability and loss (including, without limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties, costs of investigation and preparation of defense and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Executive in connection therewith; provided, however that, the Company shall indemnify the Executive in connection with a proceeding (or part thereof) initiated by the Executive only if such proceeding (or part thereof) was authorized by the Board. The right to indemnification conferred in this Section 7(a) shall include the right to be paid by the Company the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses") to the extent permitted under applicable law; provided, however, that an advancement of expenses incurred by the Executive in his or her capacity as a director or officer shall be made only upon delivery to the Company of an undertaking (hereinafter an "undertaking"), by or on behalf of the Executive, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that the Executive is not entitled to be indemnified for such expenses under this Section 7 or otherwise. (b) A determination by the Company that the Executive has not met any applicable standard of conduct to qualify for the indemnification provided in Section 7(a), shall not be entitled to any presumptive validity in an arbitration or other proceeding brought by the Executive to enforce his right to such indemnification. (c) The Company agrees to continue and maintain a directors' and officers' liability insurance policy covering the Executive to the extent the Company provides such coverage for its other executive officers. 8. DISPUTE RESOLUTION; ATTORNEYS' FEES. Other than with respect to the Company's right to obtain injunctive relief under Section 6 (which shall not be subject to the provisions of this Section 8), all disputes arising under or in connection with this Agreement shall be resolved by binding arbitration, to be held in Boston, Massachusetts in accordance with the rules and procedures of the American Arbitration Association. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Each party shall bear his or its own costs in connection with any such arbitration, provided that an arbitrator or arbitrators hearing any such dispute may, in their good faith judgment, require the Company to pay all reasonable legal fees and 9 expenses incurred by the Executive in connection with any such arbitration or legal proceeding. Notwithstanding the foregoing, the Company shall pay all reasonable legal fees and expenses incurred by the Executive in connection with any such arbitration or legal proceeding which occurs on or following a Change in Control. 9. SUCCESSORS. (a) This Agreement is personal to the Executive and without the prior written consent of the Company the Executive's rights under the Agreement shall not be assignable (except by will or the laws of descent and distribution). This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. As used in this Agreement (but not for purposes of Exhibit B hereto), the term "Company" shall mean both the Company as defined above and any such successor. 10. MISCELLANEOUS. (a) This Agreement shall be governed by, and construed in accordance with, the laws of The Commonwealth of Massachusetts, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party, by overnight courier or by certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: James C. Mullen 138 Richardson Drive Needham, MA 02492 10 If to the Company: Biogen, Inc. 14 Cambridge Center Cambridge, MA 02142 Attention: General Counsel or to such other address as either party furnishes to the other in writing in accordance with this Section 10(b). (c) Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations. (d) The Executive's or the Company's failure to insist upon strict compliance with any provisions of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement. (e) Except as set forth in this Section 10(e), this Agreement constitutes the entire understanding of the parties with respect to its subject matter and supercedes any other agreement or other understanding, whether oral or written, express or implied, between them concerning, related to or otherwise in connection with, the subject matter hereof (including without limitation the letter from the Company to the Executive, dated as of February 15, 2002). Notwithstanding the foregoing, in accordance with the terms of the letter from the Company to the Executive dated February 15, 2002, the Executive shall continue to be considered a "Designated Employee" for purposes of the Company's 1985 Non-Qualified Stock Option Plan. In addition, the Employee's Proprietary Information and Inventions Agreement executed by the Executive on May 5, 1989 shall not be superceded by this Agreement. (f) The rights and benefits of the Executive under this Agreement may not be anticipated, assigned, alienated or subject to attachment, garnishment, levy, execution or other legal or equitable process except as required by law. Any attempt by the Executive to anticipate, alienate, assign, sell, transfer, pledge, encumber or charge the same shall be void. Payments hereunder shall not be considered assets of the Executive in the event of insolvency or bankruptcy. (g) This Agreement shall terminate upon the expiration of the Term or, if earlier, upon the termination of the Executive's employment under any of the circumstances described in Section 4, except that terms of this Agreement which must survive the termination this Agreement in order to be effectuated (including the provisions of Sections 5, 6, 7 and 8) shall survive. 11 (h) This Agreement may be executed in several counterparts, each of which shall be deemed an original and which together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement under seal, as of the day and year first above written. BIOGEN, INC. By: /s/ Mary L. Good --------------------------------- Mary L. Good Chairman, Compensation and Management Resources Committee /s/ James C. Mullen ------------------------------------- James C. Mullen 12 EXHIBIT A - TAX GROSS-UP PAYMENT RULES AND PROCEDURES 1. Subject to Paragraph 3 below, all determinations required to be made under Section 5(f) of this Agreement, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by the Auditor selected in accordance with Paragraph 2 below. The Auditor shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the termination of the Executive's employment or such earlier time as is requested by the Company. The initial Gross-Up Payment, if any, as determined pursuant to this Paragraph 1, shall be paid to the Executive within five (5) days of the receipt of the Auditor's determination. If the Auditor determines that no Excise Tax is payable to the Executive, it shall furnish the Executive with a written report indicating that he has substantial authority not to report any Excise Tax on his federal income tax return. Any determination by the Auditor shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Auditor hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Paragraph 3 below and the Executive thereafter is required to make a payment or additional payment of any Excise Tax, the Auditor shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes on earned income at the highest marginal rate of taxation in the state and locality of the Executive's residence on the Date of Termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 2. The Auditor shall be public accounting firm mutually agreed upon by the Company and the Executive. If the Executive and the Company cannot agree on the firm to serve as the Auditor, then the Executive and the Company shall each select one accounting firm and those two firms shall jointly select the accounting firm to serve as the Auditor. The Company shall pay the Auditor's fee. 3. The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than fifteen (15) business days after the Executive knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the period ending on the date that any payment of taxes with respect to such claim is due or the thirty day period following the date on which the Executive gives such notice to the Company, whichever period is shorter. If the Company notifies the Executive in writing 13 prior to the expiration of such period that it desires to contest such claim, the Executive shall (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order effectively to contest such claim, and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including attorneys fees and any additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Paragraph 3, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect to such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax and income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other authority. 4. If, after the receipt by the Executive of an amount advanced by the Company pursuant to Paragraph 3 above, the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Paragraph 3), promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). 14 EXHIBIT B For purposes of this Agreement, a "Change in Control" shall be deemed to occur upon the first of the following events: (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 30% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction which is not a Change in Control described in clause (A) of paragraph (iii) below; (ii) the election to the Board, without the recommendation or approval of a majority of the incumbent Board (as of the Effective Date), of directors constituting a majority of the number of directors of the Company then in office, provided, however, that directors whose election or appointment following the Effective Date is approved by a majority of the members of the incumbent Board shall be deemed to be members of the incumbent Board for purposes hereof, provided further that directors whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company will not be considered as members of the incumbent Board for purposes of this paragraph (ii); (iii) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other company, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) at least 50% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation (unless following such merger or consolidation the voting securities of the Company outstanding immediately prior thereto represent less than 60% of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation and the transaction results in those persons who are members of the incumbent Board immediately prior to such merger or consolidation constituting less than 50% of the membership of the Board or the board of such surviving or parent entity immediately after, or subsequently at any time as contemplated by such merger or consolidation (in which case the transaction shall be a Change in Control)) or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 30% or more of the combined voting power of the Company's then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. For purposes of the Change in Control definition set forth in this Exhibit A, the following definitions shall apply: "Affiliate" shall have the meaning set forth in Rule 12b-2 under Section 12 of the Exchange Act; "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act, except that a Person shall not be deemed to be the Beneficial Owner of any securities with respect to which such Person has properly filed an effective Schedule 13G; "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time; and "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefits plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation or other business entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. EX-10.51 12 b45838biexv10w51.txt EX 10.51 LETTER AGREEMENT - H. P. HASLER 6/22/01 EXHIBIT 10.51 [BIOGEN LOGO] Vice President, Human Resources _______________________________________________________________________________ June 22, 2001 Mr. Hans-Peter Hasler 653 Augusta Court Berwyn, Pennsylvania 19312 Dear Hans-Peter: I am pleased to confirm Jim Mullen's offer to you on behalf of Biogen. You are offered the position of Executive Vice President, Commercial Operations of Biogen at an annual salary of $350,000. You will report directly to Jim Mullen and you will become a member of the Operating Team. Pursuant to Biogen's compensation policy, you will be eligible for a merit salary review at year-end 2001 and annually thereafter. You will also be eligible to participate in Biogen's annual incentive compensation plan with a 50% target bonus. For the year 2001, your bonus will be guaranteed at $100,000 and will be payable at a time and manner consistent with other peer executives. Your principal place of employment will be at Biogen's headquarters in the Cambridge, Massachusetts area. Upon employment, you will receive $500,000 as a one-time special cash payment, split into two components: - $250,000 as an interest-free forgivable loan (the "Forgivable Loan") which forgives over a thirty-six month, straight-line schedule; - $250,000 as an interest-free mortgage loan (the "Mortgage Loan") repayable to Biogen the sooner of eighteen months following the point of time the after-tax profit of your vested stock options exceeds $1,000,000 or five (5) years from your date of employment. In the event that you voluntarily terminate your employment, or Biogen terminates your employment for poor performance or cause, prior to the thirty-six months from the date of the Forgivable Loan, the unforgiven portion of the Forgivable Loan would be payable to Biogen within six months of your termination date. If you voluntarily terminate your employment, or if your employment is terminated by Biogen for poor performance or cause, prior to the repayment of the Mortgage Loan, you will be required to repay Biogen the entire amount of the Mortgage Loan the sooner of six months following the termination of your employment or the closing on the sale of the property by which the loan is then secured. The Stock and Option Plan Administration Committee of the Board of Directors has approved the grant of an option to you to purchase 150,000 shares of the common stock of Biogen Inc., effective on the date you commence employment. The exercise price per share will be the average of the high and low sale prices as reported in the National Association of Securities Dealers Automated Quotation System ("NASDAQ") on the date you commence employment. The option will have a ten-year term and vest over a four-year period at the rate of 25% per year starting on the anniversary of the date you commence employment. In the future, based on your performance, you will be eligible for merit stock option grants beginning at year-end 2002 pursuant to Biogen's merit stock option policy and in-line with awards granted to the executive officers below the President & CEO. [BIOGEN LOGO] - ------------------------------------------------------------------------------- Mr. Hans-Peter Hasler June 22, 2001 Page 2 The Board of Directors' recently approved an amendment to our stock option plan which provides the acceleration of stock option vesting based on the change in control of the corporation and a corresponding adverse impact to the individual officer which otherwise causes the individual to lose the unvested stock option grants made by Biogen. As an officer of the Company, you will be required to participate in our program for executive stock ownership, which we are currently revising and expect to have approved by the end of September. We believe it is very important that our key leaders have personal stock ownership. You will be able to choose from a menu of benefit options through our flexible benefits program, BioChoice. These include health care, dependent life, and disability insurance as well as two flexible spending accounts, Med-Flex and D-Flex, for eligible medical or dependent care expenses. At the beginning of the calendar quarter following your date of employment you will be eligible to participate in Biogen's pension plan. Biogen also offers a variety of additional benefits including 401(k) savings plans, childcare and elder care referral service, educational matching gifts, credit union, and group homeowners and automobile insurance. You will receive more detailed information regarding your benefits on your first day of employment. Biogen will provide relocation benefits to facilitate your move from Berwyn, PA. A relocation counselor will contact you to discuss the relocation program, and will send you a package detailing the relocation policy to you. Please read the policy carefully as it will outline the parameters of these benefits and detail the reimbursement process. These benefits will include the reimbursement of many of the costs associated with both the sale of your current house and the purchase of a new house in the Boston area; home finding; and movement of your household goods. Additionally, in your new role you will be provided the following: - VACATION: You are entitled, during your employment with Biogen, to four (4) weeks vacation, accrued on a monthly pro-rated basis. - SUPPLEMENTAL SAVINGS PLAN: You are entitled, during your employment with Biogen, to participate in the Voluntary Executive Supplemental Savings Plan. This plan allows you to defer from your current taxation up to 50% of your base salary and 100% of your bonus, if there is one. I can outline the details of the program if you are interested in participating. - LIFE INSURANCE: You will be provided, during your employment with Biogen, Biogen's Executive Term Life Insurance coverage for a total of $1,000,000. This coverage is based on your successfully meeting the medical standards as stated in the Executive Term insurance policy. - TAX REVIEW/PREPARATION: You are entitled, during your employment with Biogen, to the preparation and/or review, including review of the estimated taxes of your annual Federal and State tax returns, which is currently administered through Price WaterhouseCoopers. The cost of this service is covered by Biogen. In the event that you choose to continue the services provided by your current tax advisor, Biogen will reimburse you the cost of these services up to but not exceeding the amount incurred by Biogen through Price WaterhouseCoopers. [BIOGEN LOGO] - -------------------------------------------------------------------------------- Mr. Hans-Peter Hasler June 22, 2001 Page 3 - - INVOLUNTARY TERMINATION: If your employment with Biogen is terminated by Biogen without cause, Biogen will protect you by paying you a supplementary amount (the "Supplementary Amount") equal to your then present base salary for a period (the "Extra Period") ending on the earlier of (i) the date twelve months from your termination and (ii) the date you start another job. During such period, Biogen will also pay to continue your health benefits (i.e., health and dental plan coverage), provided such benefits are accorded employees generally and Biogen can obtain the relevant coverage. If you need continued coverage to prevent a gap in health coverage between your Biogen coverage and that at your new job, Biogen will extend such coverage for up to 30 days (to the extent that the Extra Period is less than twelve months) after you start your new job. The Supplementary Amount will be paid on the same schedule as your salary would have been paid. You will not be an employee of Biogen during the time of such payments and will not accrue any benefits or other rights (such as, but not limited to, pension plan vesting or accrual, stock option vesting, vacation pay, etc.) during such period except health benefits as described above. You agree to notify us when you accept a new position. Commencement of employment with Biogen is contingent on the satisfactory completion of a pre-employment drug-screening test at least five business days prior to your start date. We require all new employees to sign an Intellectual Property/Confidentiality Agreement on the first day of employment. You may also be required to complete a medical history review with our occupational health department, which is scheduled after your first day of employment. It is Biogen's policy to comply with federal, state and local guidelines applicable to its facilities and to take all reasonable steps to ensure the health and safety of Biogen employees. Consistent with this policy, your normal duties may require you from time to time to attend meetings or perform functions in any or all of Biogen's facilities. The Federal Government requires you to provide proper identification verifying your eligibility to work in the United States. Please bring the appropriate identification with you on your first day of employment. On behalf of Jim Mullen, we very much look forward to your positive response and to your joining us as early as practical. We are confident that you will make a significant contribution to Biogen's future success. Please confirm your acceptance by signing this offer letter and noting your preferred start date. I also invite you to complete the enclosed invitation to self identify. Please complete the employment application and the drug screen authorization forms and then return all signed documents to me in the enclosed self addressed, stamped envelope. The other original offer letter is for your records. Sincerely, Frank A. Burke, Jr. [BIOGEN LOGO] ________________________________________________________________________________ Mr. Hans-Peter Hasler June 22, 2001 Page 4 I am pleased to accept the offer of employment described above. ACCEPTED: /s/ Hans-Peter Hasler ______________________ Hans-Peter Hasler EX-10.52 13 b45838biexv10w52.txt EX 10.52 LETTER AGREEMENT - H. P. HASLER 10/19/01 Exhibit 10.52 Vice President, Human Resources October 19, 2001 Hans-Peter Hasler 25 Lovers Lane Southborough, MA 01772 Dear Hans-Peter: As an Executive Vice President of Biogen, we know you will continue to be a key contributor to Biogen's mission, vision, and values. On August 1, 2001, you joined Biogen at the Executive Vice President level. Since then, we have been in the process of conducting a comprehensive review of the compensation and benefits associated with various executive levels at our company. As a result of our review, I am pleased to note you are eligible for the following compensation/and or benefits as outlined below. TARGET BONUS: Your incentive target is 50% of your base salary. LONG TERM INCENTIVES: Biogen has adopted a new approach to communicating and granting stock options to employees. You will be eligible for an annual merit stock option grant, based on a design which emphasizes the future expected value of the grant. The details of how we will communicate and value options will be outlined in December. CHANGE OF CONTROL: You have been designated as a "Designated Employee" for purposes of Biogen's 1985 Non-Qualified Stock Option Plan. If at any time within two years following a Corporate Transaction (as defined in the stock option plan) your employment with Biogen is terminated by Biogen other than for cause, then each outstanding option held by you will automatically accelerate so that the option immediately becomes fully exercisable and may be exercised for a period of one year following the termination of your employment or, if earlier, until the expiration of the option. Please read the stock option plan for more details about the rights of a Designated Employee in the event of a Corporate Transaction and any applicable limitations. VACATION: You are entitled to an additional week of vacation each year. This week is over and above the company's normal vacation schedule (which is based upon years of service). SUPPLEMENTAL SAVINGS PLAN: You will be entitled to participate in the Voluntary Executive Supplemental Savings Plan. This plan allows participants to defer [pretax] base salary and future bonuses. Enrollment in this plan takes place in December each year. You will be provided additional information on the plan at that time. LIFE INSURANCE: You will have life insurance coverage that is the greater of $1,000,000 or three times your annual salary and subject to the normal medical standards of the life insurance policy. Vice President, Human Resources SEVERANCE: You will have a Minimum severance benefit that is the greater of the severance outlined in your letter dated June 22, 2001 or the severance outlined in the Executive Severance document, which has been included with this letter. EXECUTIVE STOCK OWNERSHIP: You will be expected to acquire and maintain a personal financial interest in Biogen. Ownership is defined as stock held outright, stock held in the 401(k) plan and stock held under the Employee Stock Purchase Plan. Vested but unexercised shares would also be counted toward ownership guidelines. You will be required to maintain a financial interest of six times base salary. You will have a five-year period from the date of your appointment to Vice President to obtain this ownership level. TAX PREPARATION: You are eligible to have your federal and state income taxes prepared by PricewaterhouseCoopers. On behalf of Jim Mullen, please accept my sincere congratulations and best wishes for future success with Biogen. Sincerely, /s/ Frank A. Burke, Jr. Frank A. Burke, Jr. EX-13 14 b45838biexv13.htm EX 13 PORTIONS OF THE FINANCIAL STATEMENTS

Exhibit 13

Financials

Biogen, Inc. and Subsidiaries

2	Selected Financial Data
3	Management’s Discussion and Analysis of Financial Condition and Results of Operations
20	Consolidated Statements of Income
21	Consolidated Balance Sheets
22	Consolidated Statements of Cash Flows
23	Consolidated Statements of Shareholders’ Equity
24	Notes to Consolidated Financial Statements
41	Report of Independent Accountants
42	Senior Executives and Board Members
43	Shareholder Information

1

Selected Financial Data
Biogen, Inc. and Subsidiaries

(in thousands, except per share amounts)

Years Ended December 31,	2002		2001		2000		1999		1998
Product revenues	$	1,034,357	$	970,546	$	760,292	$	620,636	$	394,863
Royalty revenues		114,007		71,766		165,373		173,799		162,724
Total revenues		1,148,364		1,042,312		925,665		794,435		557,587
Total costs and expenses		851,727		682,114		597,309		478,184		366,948
Income before income taxes		276,595		389,497		487,105		329,016		210,193
Net income		199,148		272,683		333,577		220,450		138,697
Diluted earnings per share		1.31		1.78		2.16		1.40		0.90
Cash, cash equivalents and short-term marketable securities		867,109		798,107		682,412		654,539		516,914
Total assets		2,006,988		1,721,046		1,431,856		1,277,973		924,715
Long-term debt, less current portion		37,410		42,297		47,185		52,073		56,960
Shareholders’ equity		1,595,421		1,348,832		1,106,402		979,530		718,613
Shares used in calculating diluted earnings per share		151,930		152,916		154,602		157,788		154,270

2

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Biogen, Inc. and Subsidiaries

Overview

Biogen, Inc. (“Biogen” or the “Company”) is a global biopharmaceutical company that develops, manufactures and markets novel human therapeutic products. Biogen’s primary focus is developing pharmaceutical products that meet unmet medical needs, particularly in its core therapeutic areas of neurology, dermatology and rheumatology. Biogen currently sells AVONEX® (Interferon beta-1a) for the treatment of relapsing multiple sclerosis (“MS”) and, commencing in 2003, AMEVIVE® (alefacept) for the treatment of adult patients with moderate-to-severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy. Biogen also receives revenues from royalties on sales by our licensees of a number of products covered under patents that Biogen controls. In addition, Biogen has a pipeline of development stage products and a number of research programs in our core therapeutic areas and in other areas of interest.

Results of Operations 2002 As Compared to 2001

Revenues

Total revenues consist of the following:

			(in millions)
							%
December 31,			2002		2001		Change
Product revenues*
	United States		$	743.5	$	710.0		5	%
	Rest of world			290.9		260.5		12	%
		Total		1,034.4		970.5		7	%
Royalty revenues				114.0		71.8		59	%
Total revenues			$	1,148.4	$	1,042.3		10	%

* Certain items in prior years’ product revenues and selling, general & administrative expenses have been reclassified to conform to the current year’s presentation as a result of the FASB Emerging Issues Task Force (“EITF”) Issue No. 01-09 (“EITF 01-09”), “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. See “Critical Accounting Estimates.”

Product revenues

Product revenues from AVONEX represented approximately 90% of the Company’s total revenues in 2002 as compared to 93% in 2001. Product revenue growth in 2002 was attributable to an increase in the sales price in the United States (“U.S.”) and an increase in sales volume of AVONEX worldwide. U.S. product revenue growth was affected by increased competition and a softening of the MS marketplace growth rate in the U.S. Product revenues outside of the U.S. increased 12% compared to 2001, consisting of a 13% increase based on higher sales volume in 2002, offset by a 1% decrease from the impact of foreign exchange rate changes. The Company expects sales from AVONEX outside the U.S. to continue to increase as a percentage of total product sales. The Company, however, expects to face increasing competition in the MS marketplace in and outside the U.S. from existing and new MS treatments that may impact sales of AVONEX. The Company expects future growth in AVONEX revenues to be dependent to a large extent on the Company’s ability to compete successfully. Biogen also expects that future AVONEX sales may be affected by slower growth in the MS market. See “Outlook – Competition” and “Outlook – Dependence on AVONEX and AMEVIVE Sales”. The Company expects product sales as a percentage of total revenues to continue to increase in the near and long term as the Company continues to market and sell AVONEX worldwide, and begins marketing and selling AMEVIVE.

The Company expects product revenues to grow in 2003 due mostly to sales of AMEVIVE. AMEVIVE was approved by the U.S. Food and Drug Administration (“FDA”) in January 2003 for the treatment of adult patients with moderate-to-severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy. For further discussion of AMEVIVE and the factors that may affect the revenues generated by AMEVIVE sales, see “Outlook – Competition” and “Outlook – Dependence on AVONEX and AMEVIVE Sales.”

Royalty revenues

Revenues from royalties represented approximately 10% of total revenues in 2002 as compared to 7% in 2001. The increase in royalty revenues in 2002 over the comparable period in 2001 is primarily attributable to the resumption of royalty payments from Schering-

3

Plough Corporation (“Schering-Plough”) in the fourth quarter of 2002 on U.S. sales of its alpha interferon products, and, to a lesser extent, attributable to increased sales of alpha interferon products in certain European Union (“EU”) markets.

In the fourth quarter of 2002, the Company settled its dispute with Schering-Plough over royalties on U.S. sales of alpha interferon products. As part of the settlement, Schering-Plough agreed to commence royalty payments to Biogen beginning in the fourth quarter of 2002 on U.S. sales of alpha interferon products based on a 1998 agreement between the two companies. As a result of the resumption of royalties from Schering-Plough, Biogen expects royalty revenues in 2003 to be higher than in 2002. See “Outlook-Royalty Revenue”. Royalty revenues may fluctuate as a result of fluctuations in sales levels of products sold by the Company’s licensees from quarter to quarter due to the timing and extent of major events such as new indication approvals or government-sponsored programs. For a discussion of some of the other factors that may affect royalty revenues in the future, see “Outlook – Royalty Revenue” and “Outlook – Patents and Other Proprietary Rights”. The Company expects royalty revenues as a percentage of total revenues to continue to decrease in the near and long term as the Company continues to market and sell AVONEX worldwide, and begins marketing and selling AMEVIVE. See “Outlook – Royalty Revenue” and “Outlook – Patents and Other Proprietary Rights”.

Costs and expenses

Total costs and expenses consist of the following:

		(in millions)
						%
December 31,		2002		2001		Change
Cost of product revenues		$	151.4	$	131.9		15	%
Cost of royalty revenues			8.7		4.6		89	%
Research and development			367.6		314.6		17	%
Selling, general & administrative*			324.0		231.0		40	%
	Total costs and expenses	$	851.7	$	682.1		25	%

The increase in cost of product revenues in 2002 compared to 2001 was primarily attributable to the higher sales volume of AVONEX, and, to a lesser extent, to a decrease in certain product yield and $2.7 million of writedowns of commercial inventory which did not meet quality specifications to its net realizable value in 2002. Gross margins on product sales were approximately 85% for the period ended December 31, 2002 compared to 86% for the same period in 2001. The Company expects that gross margins on product revenues will fluctuate in the future based on changes in product mix and new product initiatives. The increase in cost of royalty revenues was primarily attributable to increased sales on alpha interferon products sold in 2002 over 2001. Gross margins on royalty revenue decreased to approximately 92% for the period ended December 31, 2002 compared to 94% for the same period in 2001. The Company expects that gross margins on royalty revenues will fluctuate in the future based on changes in sales volumes for specific products from which the Company receives royalties.

Research and development expenses in 2002 were $367.6 million, an increase of $53 million or 17% as compared to $314.6 million in 2001. The increase was primarily due to increases in early stage research activities of $13 million, clinical trial costs of $17 million primarily for ANTEGREN, $14 million related to Phase IV AVONEX studies, and $9 million related to other production, development, and infrastructure costs. Costs for upfront fees and milestone payments may cause variability in future research and development expense. See “Critical Accounting Estimates”.

Selling, general and administrative expenses in 2002 were $324 million, an increase of $93 million or 40% as compared to 2001. This increase was primarily due to an increase in selling and marketing expenses of $43 million related to the sale of AVONEX, and increased spending of $32 million in preparation for the launch of AMEVIVE. AVONEX-related increases were driven by heightened competition in the U.S. market. AMEVIVE increases in spending were driven by preparation for the launch of a product, which received FDA approval in the U.S. in January 2003. The Company expects that selling, general and administrative expenses will continue to increase in the near and long term as the Company continues to expand its sales and marketing organizations and efforts necessary to sell AVONEX worldwide in response to increased competition, and as the Company continues to expand its sales and marketing organizations and efforts necessary to sell AMEVIVE, and in preparation for the possible future approval of additional products.

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Other income (expense), net

     Total other income (expense), net consists of the following (in thousands):

December 31,	2002			2001
Interest income	$	41,217		$	44,128
Interest expense		(3,546	)		(3,954	)
Other expense		(57,713	)		(10,875	)
Total other income (expense), net	$	(20,042	)	$	29,299

Total other income (expense), net consists primarily of interest income, partially offset by interest expenses and other non-operating income and expenses. Total other income (expense), net in 2002 was an expense of $20 million as compared to income of $29.3 million in 2001, a decrease of $49.3 million.

Interest income in 2002 was $41.2 million compared to $44.1 million in 2001, a decrease of $2.9 million or 7% primarily due to lower average yields on invested funds in 2002. The Company expects interest income to vary based on changes in the amount of funds invested and fluctuations in interest rates.

Interest expense decreased from $4 million in 2001 to $3.6 million for 2002. The decrease in interest expense of $0.4 million or 10% in 2002 from 2001 was due to lower borrowing outstanding under building loan agreements.

Other income (expense) decreased by $46.8 million in 2002 from 2001. Other income (expense) included the following (in thousands):

December 31,	2002			2001
Impairments of non-current marketable securities	$	(10,095	)	$	(27,942	)
Reserve for outstanding loan to collaborator		(10,500	)		—
Gain (loss) on sale on non-current marketable securities		(301	)		32,143
Donation for establishment of Biogen Foundation		(15,000	)		—
Settlement of Schering-Plough dispute		37,240			—
Settlement of Berlex dispute		(55,000	)		(20,000	)
Equity in net income (loss) of unconsolidated affiliate		(3,392	)		610
Gain on sale of current marketable securities		2,703			6,147
Miscellaneous		(3,368	)		(1,833	)
Total other expense	$	(57,713	)	$	(10,875	)

As discussed in the Company’s critical accounting estimates, the Company assessed the unrealized losses on its investments in Curis Inc. and Targeted Genetics Corporation (“Targeted”) at each quarter (see “Financial Condition”), and determined that the positive evidence suggesting that these investments would recover to at least the Company’s purchase price was not sufficient to overcome the presumption that the current market price of the investments was the best indicator of value at those dates. Accordingly, the related unrealized losses of approximately $10.1 million and $28 million were reclassified from other comprehensive income to current expense in 2002 and 2001, respectively. Sales of non-current marketable securities resulted in a loss of $0.3 million and a gain of $32.1 million for the years ended December 31, 2002 and 2001, respectively.

During the third quarter of 2002, the Company recorded a $10.5 million charge for the establishment of a reserve related to an outstanding loan to Targeted. Based on a review of the financial condition of Targeted in 2002, the Company determined that it was no longer probable that the loan would be repaid.

In October 2002, the Company established The Biogen Foundation, a private, U.S. based, non-profit philanthropic organization. In December 2002, the Company made a charitable contribution of $15 million to fund The Biogen Foundation. The Foundation is to operate exclusively for the benefit of charitable, educational and scientific purposes. Certain executive officers and other employees of the Company serve as directors and officers of the Foundation. The Company classifies charitable contributions to other income (expense).

During the fourth quarter of 2002, the Company and Schering-Plough settled their dispute on the issue of whether and to what extent Schering-Plough has an obligation to pay royalties in the U.S. on sales of its alpha interferon products. The Company received a final settlement payment resulting in a net gain of $37.2 million, which was classified to other income (expense). See “Royalty Revenues”.

In the fourth quarter of 2002, the Company recorded a $55 million charge related to the final settlement of a patent infringement dispute with Berlex. In 2001, the Company reported an initial charge of $20 million as part of the settlement agreement. See “Legal Matters”.

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Income taxes

The Company’s effective tax rate in 2002 was 28%. Income tax expense for 2002 varied from the amount computed at the U.S. federal statutory rates primarily due to earnings in European jurisdictions with lower tax rates and to the utilization of research and development tax credits. The Company expects its effective tax rate during 2003 to remain consistent.

Results of Operations 2001 As Compared to 2000

Revenues

Total revenues consist of the following:

			(in millions)
								%
December 31,			2001		2000		Change
Product revenues*
	United States		$	710.0	$	551.8			29	%
	Rest of world			260.5		208.5			25	%
		Total		970.5		760.3			28	%
Royalty revenues				71.8		165.4			(57	)%
Total revenues			$	1,042.3	$	925.7			13	%

* Certain items in prior years’ product revenues and selling, general & administrative expenses have been reclassified to conform to the current year’s presentation as a result of the FASB Emerging Issues Task Force (“EITF”) Issue No. 01-09 (“EITF 01-09”), “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. See “Critical Accounting Estimates.”

Product sales from AVONEX represented approximately 93% of the Company’s total revenues in 2001 as compared to 82% in 2000. The growth in 2001 was primarily attributable to an increase in the sales volume of AVONEX in the U.S. and in the fifteen member countries of the EU.

Revenues from royalties represented approximately 7% of total revenues in 2001 as compared to 18% in 2000. The decrease in royalty revenues in 2001 over the comparable period in 2000 is primarily attributable to expiration of Biogen’s alpha interferon patents in most of Europe and in Japan and a dispute with Schering-Plough over royalties payable by Schering-Plough on U.S. sales of its alpha interferon products, and, to a lesser extent, attributable to lower licensee sales.

Costs and expenses

Total costs and expenses consist of the following:

		(in millions)
						%
December 31,		2001		2000		Change
Cost of product revenues		$	131.9	$	112.9		17	%
Cost of royalty revenues			4.6		12.3		(63	)%
Research and development			314.6		302.8		4	%
Selling, general & administrative*			231.0		169.3		36	%
	Total costs and expenses	$	682.1	$	597.3		14	%

The increase in cost of product revenues was attributable to the higher sales volume of AVONEX. Gross margins on product sales increased to approximately 86% for the period ended December 31, 2001 compared to 85% for the same period in 2000 due to efficiencies of production reducing cost of goods sold in 2001. Gross margins on royalty revenue increased to approximately 94% for the period ended December 31, 2001 compared to 93% for the same period in 2000.

Research and development expenses in 2001 were $314.6 million, an increase of $11.8 million or 4% as compared to $302.8 million in 2000. The increase in research and development expense in 2001 compared to 2000 was primarily due to an increase in clinical production and other costs associated with the Company’s development efforts related to its ongoing research and development programs of $19.9 million and an increase in the funding of collaboration agreements of $7.2 million, offset by a reduction in the Company’s clinical trial costs of $15.3 million in 2001.

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Selling, general and administrative expenses in 2001 were $231 million, an increase of $61.7 million or 36% as compared to 2000. This increase in selling, general and administrative expense in 2001 was primarily due to an increase in selling and marketing expenses related to the sale of AVONEX.

Other income, net

Total other income, net consists of the following (in thousands):

December 31,	2001			2000
Interest income	$	44,128		$	42,965
Interest expense		(3,954	)		(4,310	)
Other income (expense)		(10,875	)		120,094
Total other income, net	$	29,299		$	158,749

Total other income, net consists primarily of interest income, partially offset by interest expenses and other non-operating income and expenses. Other income, net in 2001 was $29.3 million as compared to $158.7 million in 2000, a decrease of $129.4 million.

Interest income in 2001 was $44.1 million compared to $43 million in 2000, an increase of $1.1 million or 3% due to an increase in funds invested.

Interest expense decreased $0.4 million or 9% in 2001 from 2000 due to lower outstanding borrowing under building loan agreements.

Other income (expense) decreased by $131 million in 2001 from 2000. Other income (expense) included the following (in thousands):

December 31,	2001			2000
Impairments of non-current marketable securities	$	(27,942	)	$	—
Gain on sale on non-current marketable securities		32,143			101,129
Initial settlement of Berlex dispute		(20,000	)		—
Realized gains in third party acquisition of investment		—			24,132
Equity in net income of unconsolidated affiliate		610			—
Gain on sale of current marketable securities		6,147			(1,846	)
Miscellaneous		(1,833	)		(3,321	)
Total other income (expense)	$	(10,875	)	$	120,094

As part of its assessments at December 31, 2001, the Company assessed the unrealized losses on its investments in Curis Inc. and Targeted Genetics Corporation (see “Financial Condition”), and determined that the positive evidence suggesting that the investments described above would recover to at least the Company’s purchase price was not sufficient to overcome the presumption that the current market price of the investments was the best indicator of value at December 31, 2001. Accordingly, the related unrealized losses of approximately $28 million were reclassified from other comprehensive income to current expense in the fourth quarter of 2001. Sales of non-current marketable securities resulted in gains of $32.1 million and $101.1 million for the full year ended December 31, 2001 and 2000, respectively.

In 2001, the Company reported a charge of $20 million as part of the settlement of a patent infringement dispute with Berlex. See “Legal Matters”.

In 2000, the Company realized gains of approximately $24.1 million upon the acquisition by third parties of two companies in which the Company had invested.

Income taxes

The Company’s effective tax rate in 2001 was 30%. Income tax expense for 2001 varied from the amount computed at the U.S. federal statutory rates primarily due to higher sales in European jurisdictions with lower tax rates and to the utilization of research and development tax credits.

Financial Condition

At December 31, 2002, cash, cash equivalents and short-term marketable securities were $867.1 million compared with $798.1 million at December 31, 2001, an increase of $69 million. Working capital increased $86.9 million to $889.7 million. Net cash from operating activities which included net income, for the year ended December 31, 2002 was $267.1 million compared with $316.8 million in 2001, and included tax benefits related to stock options of $19.6 million, and non-cash charges of $10.1 million related to the write-down of non-current marketable

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securities, and $10.5 million for the establishment of a reserve related to an outstanding loan to a collaborator. Cash outflows from investing activities during 2002 included investments in property and equipment and patents of $221.6 million, net purchases of marketable securities totaling $62 million, and a $6 million investment in a collaborator. Significant cash outflows from financing activities included $8.4 million for purchases of the Company’s common stock under its stock repurchase program and $4.9 million for repayments on loan agreements with banks. Cash inflows from financing activities included $27.4 million from common stock option exercises and employee stock purchase plan activity.

In August 1995, the Company entered into a loan agreement with a bank for financing the construction of its biological manufacturing facility in North Carolina (the “Construction Loan”). During 1997, the Company completed construction of the facility and the funds advanced under the Construction Loan were converted to a floating rate ten-year term loan with principal and interest payable quarterly. As of December 31, 2002, the Company had $29.8 million outstanding under the Construction Loan. The Construction Loan is collateralized by the underlying building. The Company also entered into an interest rate swap agreement with the same bank, fixing its interest rate on the Construction Loan at 7.75% during the remaining term of the loan with interest payable quarterly. In addition, as of December 31, 2002, the Company had $12.5 million outstanding under a floating rate loan with a bank (the “Term Loan”). The Term Loan is collateralized by the Company’s laboratory and office building in Cambridge, Massachusetts. The Company has fixed its interest rate on the Term Loan at 7.5% under the terms of an interest rate swap agreement. Terms of the Company’s loan agreements include various covenants, including financial covenants which require the Company to maintain minimum net worth, cash flow and various financial ratios. The Company is in compliance with all covenants or requirements set forth in its credit agreements.

The Company’s construction of the large scale manufacturing plant and a laboratory office building in Research Triangle Park, North Carolina was substantially completed in the first quarter of 2002. The Company continued its further expansion of its Research Triangle Park, North Carolina complex in 2002 with ongoing construction of several projects to create additional manufacturing capacity. These additional projects are expected to be completed by the summer of 2003 at a total cost of approximately $93.3 million. As of December 31, 2002, the Company had committed $81.7 million for construction costs related to these additional projects, of which $73.5 million has been spent. The Company is also completing plans to build a manufacturing plant in Denmark. The Company expects that construction will commence in 2003 and be completed early in 2005, at an estimated cost of $250 million. At December 31, 2002, $47 million had been committed for construction costs related to the manufacturing plant in Denmark, of which $36.8 million has been spent.

On December 18, 2000, the Company announced that its Board of Directors had authorized the repurchase of up to 4 million shares of the Company’s common stock. The repurchased stock provides the Company with treasury shares for general corporate purposes, such as stock to be issued under employee stock option and stock purchase plans. During 2002, the Company repurchased approximately 145,000 shares of its common stock at a cost of $8.4 million. During 2001, the Company repurchased approximately 1.5 million shares of its common stock at a cost of $88.3 million. Approximately 2.4 million shares remain authorized for repurchase under this program at December 31, 2002. In the first quarter of 2003, the Company began open market repurchases for additional shares of its common stock under the program.

In 2002, the Company was an investor in an equity fund that invested in biotechnology entities. In the first quarter of 2003, Biogen opted out of the equity fund and will receive a distribution of approximately $7.2 million, its remaining partnership interest, in the first quarter of 2003. Biogen had accounted for its interest in this fund under the equity method of accounting. The Company’s share of the earnings or losses from the equity investment consisted of a loss of $3.4 million in 2002 and income of $0.6 million in 2001, which were recorded within other income and expenses.

In January 2003, the Company signed a collaboration agreement (the “IDEC Agreement”) with IDEC Pharmaceuticals Corporation (“IDEC”), under which Biogen and IDEC will collaborate on the development of three oncology therapeutics from Biogen’s pipeline of early-stage product candidates: an anti-lymphotoxin beta receptor (LTBR) monoclonal antibody, an anti-CRIPTO monoclonal antibody, and an interferon beta (INF-b) gene delivery product. Under the terms of the IDEC agreement, IDEC initially will be responsible for the development costs of the product candidates, until that time, if any, when the Company exercises its opt-in rights (which must be done within a certain timeframe) with respect to each specific product candidate. If the Company exercises its opt-in rights for a specific product, IDEC and the Company will share all subsequent costs related to that specific product and the Company will retain fifty percent of any economic benefit related to the product. If the Company chooses not to exercise its opt-in rights, the Company will be entitled to receive royalty payments from future sales of the specific products.

In December 2002, Biogen signed a collaboration agreement (the “Sunesis Agreement”) with Sunesis Pharmaceuticals, Inc. (“Sunesis”) under which Biogen and Sunesis will collaborate on the discovery and development of oral therapeutics for the treatment of inflammatory and autoimmune diseases. The parties will apply Sunesis’ proprietary fragment-based drug discovery technology, known as “tethering,” to generate small molecule leads that target select cytokines in the immune system. Under the terms of the Sunesis Agreement, the Company purchased 1.25 million shares of preferred stock of Sunesis for $6 million, the fair value of the shares. In addition, the Company paid a one-time non-refundable license fee of $3 million which was charged to research and development expense and acquired certain exclusive licenses to develop and commercialize certain compounds resulting from the collaboration. The Company accounts for its investment in Sunesis, which is included in other assets, using the cost method of accounting, subject to periodic review of impairment. The Company will pay Sunesis a quarterly license maintenance fee of $357,500 during the period commencing on April 1, 2004 through July 1, 2005. Additionally, Biogen agreed to enter into a Credit Facility Agreement (“Loan Agreement”) with Sunesis under which Biogen is obligated to loan Sunesis up to $4 million. No borrowings from

8

the loan agreement were outstanding as of December 31, 2002. The Company has committed to paying Sunesis additional amounts upon the completion of certain future research milestones and first and second indication development milestones. If all the milestones were to be achieved, the Company would be required to pay up to an additional $60.5 million over the life of the agreement.

In April 2002, the Company signed a development and marketing collaboration agreement (the “Celltech Agreement”) with Celltech R&D Limited (“Celltech”) under which the Company and Celltech agreed to collaborate on the development and commercialization of a humanized anti-TNF alpha antibody known as “CDP571” with potential value in treating gastrointestinal disorders (including Crohn’s disease), psoriasis and other autoimmune disease conditions. Under the terms of the Celltech Agreement, Biogen and Celltech agreed to share costs for on-going development activities. In April 2002, the Company paid a one-time non-refundable initiation fee of $500,000, which was charged to research and development expense. Biogen incurred development expenses for CDP571 during the second and third quarter of 2002, and in the third quarter of 2002, ceased participation in development expenses associated with CDP571 due to unfavorable Phase III data. Through December 31, 2002, the Company incurred approximately $7 million of research and development expenses associated with CDP571. The Company does not expect to pay any additional amounts in this collaboration.

In July 2001, the Company signed a development and marketing collaboration agreement (the “ICOS Agreement”) with ICOS Corporation (“ICOS”), under which the Company and ICOS are collaborating worldwide on the development and commercialization of orally active, small molecule LFA-1 antagonists. Biogen and ICOS are currently developing an oral small molecule LFA-1 antagonist as a potential treatment for psoriasis. Under the terms of the ICOS Agreement, the Company paid ICOS a one-time, non-refundable license fee of $8 million, which was charged to research and development expense in 2001. Additionally, as part of the agreement, Biogen made available to ICOS a line of credit in the amount of $20 million, of which $10 million was available at December 31, 2002. The Company provided $6.8 million and $2.3 million from the line of credit to ICOS that was recorded as a loan receivable and was later charged to research and development expense in 2002 and 2001, respectively, upon the achievement of certain clinical milestones by ICOS. As of December 31, 2002, there was $1.0 million in borrowings outstanding under the credit facility. The Company has committed to providing milestone payments to ICOS upon the achievement of certain future events. If all the future milestones were to be achieved and commercialization were to be successful in excess of specified levels of sales, the Company would be required to pay up to an additional $92.5 million over the remaining life of the agreement.

In September 2000, the Company signed a collaborative research agreement (the “Eos Agreement”) with Eos Biotechnology, Inc. (“Eos”), under which the Company and Eos will collaborate in the research and development of novel targets for antibody and protein therapeutics in the area of breast cancer. Under the Eos Agreement, the Company purchased 1.9 million shares of preferred stock of Eos for $5 million. In addition, the Company paid a one-time non-refundable license fee of $6 million, which was charged to research and development expense and acquired certain exclusive, worldwide rights related to breast cancer-specific molecules for the use in the development of new antibody and secreted protein therapeutics. The Company accounts for its investment in Eos, which is included in other assets, using the cost method of accounting subject to periodic review of impairment. The Company provided Eos with research and development funding of $1.5 million in 2002, $1.5 million in 2001 and $250,000 in 2000. The research program under the Eos Agreement was terminated in December 2002, thereby relieving Biogen of any future commitments. In February 2003, Eos and Protein Design Labs, Inc. (“PDLI”) announced a definitive merger agreement under which PDLI would acquire 100% of the outstanding stock of Eos in a stock-for-stock transaction valued at $37.5 million. Upon completion of the merger, Biogen’s preferred shares of EOS would be converted into common stock of PDLI. The Company expects to record a writedown of approximately $3 million in the first quarter of 2003 related to its investment in Eos.

In August 2000, the Company signed a development and marketing collaboration agreement (the “Antegren Agreement”) with Elan Pharma International, Ltd, an affiliate of Elan Corporation, plc (“Elan”) under which the Company and Elan are collaborating in the development, manufacture and commercialization of ANTEGREN® (natalizumab), a humanized monoclonal antibody. The Company and Elan are currently developing ANTEGREN as a potential treatment for MS and Crohn’s disease. Under the terms of the Antegren Agreement, Biogen and Elan share costs for on-going development activities. The Company paid a one-time non-refundable license fee of $15 million in 2000, which was charged to research and development expense. The Company provided $7 million and $16 million to Elan for certain milestones achieved during the years 2002 and 2001, respectively, which were charged to research and development expense. As of December 31, 2002, Elan owed the Company $14.8 million, representing development expenses incurred by Biogen to be reimbursed by Elan. The Company has committed to paying Elan additional amounts upon the completion of certain future milestones. If all the future milestones were to be achieved, the Company would be required to pay up to an additional $14 million over the remaining life of the agreement. Elan is in the process of implementing a recovery plan to re-build its business. The Company does not believe that business issues facing Elan will have a material adverse impact on the Company’s rights to develop or commercialize ANTEGREN.

In July 1996, the Company signed a collaborative research and commercialization agreement (the “Ontogeny Agreement”) with Ontogeny, Inc. (“Ontogeny”), a private biotechnology company, for the development and commercialization of three specific proteins. In August 2000, Ontogeny merged with two other biotechnology companies to form Curis Inc. (“Curis”). As a shareholder in Ontogeny, Biogen received Curis common stock in exchange for the Company’s shares in Ontogeny. The Company provided $1

9

million of research funding to Ontogeny in 2000. Additionally, the Company provided $1.5 million upon termination of the Ontogeny Agreement, which was charged to research and development expense in 2000. At December 31, 2002 the Company retained approximately 166,000 shares of Curis common stock, and included the investment in long-term marketable securities available-for-sale.

In August 1995, the Company signed a collaborative research agreement (the “Genovo Agreement”) for the development of human gene therapy treatments with Genovo, Inc. (“Genovo”), a gene therapy research company. Under the Genovo Agreement, the Company acquired 380,000 shares of Genovo Series A Preferred stock for $4.5 million and acquired certain licensing rights. The Company accounted for this investment, which was included in other assets, using the equity method of accounting. The Company recorded its proportion of Genovo’s net losses as research and development expense in the amount of $3.9 million in 2000. In August 2000, Genovo entered into a merger agreement (“Targeted Merger Agreement”) with Targeted Genetics Corporation (“Targeted”). As a shareholder in Genovo, Biogen received Targeted common stock in exchange for the Company’s shares in Genovo. Also as part of the Targeted Merger Agreement, an existing $500,000 promissory note payable by Genovo to Biogen was converted into a no-interest promissory note from Targeted with a term of five years. Additionally, concurrently with the Targeted Merger Agreement, the Company entered into a development and marketing agreement and a funding agreement (the “Targeted Agreements”) for gene therapy research and development. The Targeted Agreements provide for a $10 million credit facility, of which $10 million of borrowings were outstanding as of December 31, 2002. Targeted also had an option to sell to the Company an additional $10 million of Targeted common stock at fair value. In September 2002, Targeted exercised an option to issue $4 million of common stock to Biogen. During the third quarter of 2002, the Company incurred a $10.5 million charge for the establishment of a reserve related to an outstanding loan to Targeted. Based on a review of the financial condition of Targeted at September 30, 2002, the Company determined that it was no longer probable that the loan would be repaid. The Company provided $1 million in 2002, $1 million in 2001 and $250,000 in 2000 for research funding to Targeted. The Company expects to fund research activities of Targeted related to the collaboration of $750,000 in 2003. At December 31, 2002 the Company retained approximately 8,963,402 shares of Targeted common stock, and included the investment in long-term marketable securities available-for-sale.

The following summarizes the Company’s contractual obligations (excluding contingent milestone payments totaling $167 million) at December 31, 2002, and the effects such obligations are expected to have on its liquidity and cash flows in future periods.

Payments due by period
	Total		Less than		1-3		4-5		After
(in thousands)	Years		1 year		Years		Years		5 Years
Long-term debt	$	42,298	$	4,888	$	17,276	$	20,134	$	—
Non-cancelable operating leases		122,038		20,411		33,150		24,501		43,976
Other long-term obligations		2,895		750		2,145		—		—
Total contractual cash obligations	$	167,231	$	26,049	$	52,571	$	44,635	$	43,976

The Company is in compliance with all covenants or other requirements set forth in its credit agreements.

The Company maintains a 50% equity interest in two joint ventures outside the U.S. The primary purpose of these entities is the distribution of AVONEX in Switzerland and AMEVIVE in Italy. All material intercompany balances and transactions have been eliminated. The Company records its share of the earnings or losses of these entities to other income (expense). The Company does not have any other relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, the Company is not exposed to any financing, liquidity, market or credit risk that could arise if the Company had engaged in such relationships.

The Company currently generates cash from operations primarily due to the sale of AVONEX and from royalties on sales generated by the Company’s licensees. In the future, the Company expects to continue generating cash from these sources. Additionally, in 2003 and beyond, the Company expects to generate cash from the sale of AMEVIVE. The Company believes that existing funds and cash generated from operations are adequate to satisfy its working capital and capital expenditure requirements in the foreseeable future. However, the Company may raise additional capital to take advantage of favorable conditions in the market or in connection with the Company’s development activities.

Legal Matters

In January 2002, the Company settled litigation with Berlex Laboratories, Inc. (“Berlex”). Berlex had claimed that the Company’s production of AVONEX in the U. S. infringed certain U.S. patents which the Company refers to as the “McCormick” patents. A District Court decision in 2000 rendered final judgment in the Company’s favor determining that the manufacture, use and sale of AVONEX in the U.S. did not infringe any of the claims of the asserted McCormick patents, but Berlex appealed the decision to the Court of Appeals for the Federal Circuit. Under the settlement agreement, the Company agreed to pay Berlex $20 million, and to make a second and final payment to Berlex if the Court of Appeals were to reverse the District Court’s previous ruling granting summary judgment in the

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Company’s favor. As part of the settlement, both parties agreed not to pursue further litigation about these patents. Biogen recorded a $20 million charge in “Other Income, net” in the fourth quarter of 2001 to account for the first payment to Berlex. Because of the substantive terms of the Berlex settlement arrangement were agreed to in the fourth quarter of 2001, the Company determined that the provisions of SFAS 5, “Accounting for Contingencies,” required that the Company account for this settlement in its December 31, 2001 financial statements. The guidance in Financial Accounting Standards Board (“FASB”), Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss, an Interpretation of SFAS 5”, requires that when an amount within the range of potential loss appears to be a better estimate that any other amount within the range, that amount should be accrued. It further requires that when no amount within the range is a better estimate than any other amount, the minimum amount in the range should be accrued. In the case of the Berlex settlement, Biogen determined at the time of the settlement that $20 million was both the best estimate of the Company’s potential loss, and the minimum amount in the range of potential losses. As a result, the Company recorded a charge of $20 million related to the settlement in its December 31, 2001 financial statements.

On January 31, 2003, the Court of Appeals decided that the District Court had properly construed the claims of the McCormick patents and that the Company did not literally infringe the McCormick patents. The Court of Appeals remanded the case to the District Court to determine if one of the Berlex patents might be infringed under a redefinition of the “doctrine of equivalents” recently handed down by the U.S. Supreme Court. As a result of the decision, the Company was required to make a final payment to Berlex of $55 million under the settlement agreement which was recorded in December 2002. The previously negotiated contingent settlement eliminated the need for further litigation and resolved the entire dispute. The settlement agreement provides that Biogen receive a fully paid up, royalty free, non-exclusive license under the McCormick patent and a related patent held by Berlex. The Company negotiated a license in order to avoid future uncertainty surrounding the rights to the Berlex patent for Biogen and its distribution channel partners. The McCormick patents are not utilized by Biogen and, as such, do not hold value and will not provide future economic benefit to the Company. The $55 million payment for settlement of litigation was charged to other income (expense) in the fourth quarter of 2002.

On October 13, 1998, the Company filed an opposition with the Opposition Division of the European Patent Office opposing the grant of a European patent (the “Rentschler II Patent”) issued to Dr. Rentschler Biotechnologie GmbH (“Rentschler”) claiming compositions of matter of beta interferon having specific glycosylation patterns. On November 6, 2002, a hearing took place with regard to the Company’s opposition of the Rentschler II Patent in the European Patent Office. The Opposition Board of the European Patent Office ruled in an appealable decision that the present claims of the Rentschler II Patent should be maintained. Following this decision, Rentschler Biotechnologie GmbH & Co. KG sued our German subsidiary, Biogen GmbH, for infringement of the Rentschler II Patent in Germany. The Company intends to appeal the decision of the Opposition Division to the European Patent Office’s Technical Board of Appeals. The Company believes that it has arguments to support the invalidation of the Rentschler II Patent before the Technical Board of Appeals. A decision on the appeal is not likely to be issued until at least two years after the Company files the appeal. Biogen also believes that it has solid arguments to support its defense against Rentschler’s infringement claims in the German infringement lawsuit. A hearing in the German proceeding is scheduled to occur in September 2003, with a decision likely to follow within a month or two after the hearing. The non-prevailing party will then have the right to appeal the decision. A ruling on such an appeal would likely take another 12 to 18 months. The Company is closely examining the Opposition Board’s recent written ruling and the claims made in the German infringement suit and exploring various alternatives for handling these matters. If the Company were to be enjoined from selling AVONEX in Germany by the German district court pending our appeal of an adverse judgment, or, if the Company lost any appeal of the German infringement suit, or if, through other legal proceedings Rentschler were to obtain a determination that the Company’s sales of AVONEX in other European countries infringes a valid Rentschler II patent, such a result or results could have a material adverse effect on the Company’s results of operations and financial condition. As a result, an estimate of any potential loss or range of loss cannot be made at this time.

Along with most other major pharmaceutical and biotechnology companies, the Company has been named as a defendant in a lawsuit filed by the County of Suffolk, New York, in the U.S. District Court in the Eastern District of New York in January 2003. In March 2003, the case was conditionally transferred to the United States District Court for the District of Massachusetts. The complaint alleges that the defendants overstated the Average Wholesale Price (“AWP”) for drugs for which Medicaid provides reimbursement (“Covered Drugs”), marketed and promoted the sale of Covered Drugs to providers based on the providers ability to collect inflated payments from the government and Medicaid beneficiaries that exceeded payments possible for competing drugs, provided financing incentives to providers to over-prescribe Covered Drugs or prescribe Covered Drugs in place of competing drugs, and overcharged Medicaid for illegally inflated Covered Drugs reimbursements. The complaint further alleges that the defendants failed to accurately report the “best price” on the Covered Drugs to New York’s Medicaid program. Under Medicaid, pharmaceutical and biotechnology companies agree to pay Medicaid programs a rebate for each product reimbursed by Medicaid. The amount of the rebate is often the difference between the average manufacturers price and the best price reported by companies to the Medicaid program. Plaintiff claims that it was harmed because it could have allotted the dollars that it wrongfully spent on Medicaid to other public needs. Plaintiff has brought the action under the Racketeering Influence and Corrupt Organizations Act (RICO), and for breach of contract, unjust enrichment, Medicaid fraud and common law fraud. The Company intends to vigorously defend itself against all of the allegations and claims in this lawsuit. As a result, an estimate of any potential loss or range of loss cannot be made at this time.

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Critical Accounting Estimates

The preparation of consolidated financial statements requires the Company to make estimates and judgements that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to revenue recognition and bad debts, marketable securities, derivatives and hedging activities, inventories, patents, income taxes, research and development, loans, pensions, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition and Accounts Receivable

SEC Staff Accounting Bulletin No. 101 (“SAB 101”) provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. SAB 101 establishes the SEC’s view that it is not appropriate to recognize revenue until all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectibility is reasonably assured. Further, SAB 101 requires that both title and the risks and rewards of ownership be transferred to the buyer before revenue can be recognized. The Company believes that its revenue recognition policies are in compliance with SAB 101.

Revenues from product sales are recognized when product is shipped and title and risk of loss has passed to the customer. Revenues are recorded net of applicable allowances for returns, rebates and other applicable discounts and allowances. The timing of distributor orders and shipments can cause variability in earnings. The Company prepares its estimates for sales returns and allowances, discounts and rebates quarterly based primarily on historical experience updated for changes in facts and circumstances, as appropriate. If actual future results v, the Company may need to adjust its estimates, which could have an impact on earnings in the period of adjustment.

In Febru 2002, the FASB Emerging Issues Task Force (“EITF”) released EITF Issue No. 01-09 (“EITF 01-09”), “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. EITF 01-09 states that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, should be characterized as a reduction of revenue when recognized in the vendor’s income statement, rather than a sales and marketing expense. The Company has various contracts with distributors that provide for discounts and rebates. These contracts are classified as a reduction of revenue. The Company also maintains select customer service contracts with distributors and other customers in the distribution channel. In accordance with EITF 01-09, the Company has established the fair value of these contracts and, as provided by EITF 01-09, classified these customer service contracts as sales and marketing expense. If the Company had concluded that sufficient evidence of the fair value did not exist for these contracts, the Company would have been required to classify these costs as a reduction of revenue.

The Company receives royalty revenues under license agreements with a number of third parties that sell products based on technology developed by the Company or to which the Company has rights. The license 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. The relevant period estimates of sales are based on interim data provided by licensees and analysis of historical royalties paid to the Company (adjusted for any changes in facts and circumstances, as appropriate). The Company maintains regular communication with its licensees in order to gauge the reasonableness of its estimates. Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period which they become known, typically the following quarter. Historically, adjustments have not been material based on actual amounts paid by licensees. There are no future performance obligations on the part of the Company under these license agreements. Under this policy, revenue can vary due to factors such as resolution of royalty disputes and arbitration.

Revenue is not recognized in any circumstances unless collectibility is reasonably assured.

Biogen maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of Biogen’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required, which could affect future earnings.

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Marketable securities

As part of its strategic product development efforts, the Company invests in equity securities of certain biotechnology companies with which it has collaborative agreements. Statement of Financial Accounting Standards (“SFAS”) No. 115 (“SFAS 115”), “Accounting for Certain Investments in Debt and Equity Securities”, addresses the accounting for investment in marketable equity securities. As a matter of policy, Biogen determines on a quarterly basis whether any decline in the fair value of a marketable security is temporary or other than temporary. Unrealized gains and losses on marketable securities are included in other comprehensive income in shareholders’ equity, net of related tax effects. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value with a charge to current earnings. The factors that the Company considers in its assessments include the fair market value of the common stock, the duration of the stock’s decline, prospects for favorable clinical trial results, new product initiatives and new collaborative agreements. Any future determinations that unrealized losses are other than temporary could have an impact on earnings. In connection with the Company’s assessment at December 31, 2002, $1.5 million of unrealized losses related to these marketable securities were determined to be temporary. The fair market value of these marketable securities totaled $3.8 million at December 31, 2002.

The Company also invests in equity securities of certain companies whose securities are not publicly traded and fair value is not readily available. These investments are recorded using the cost method of accounting and, as a matter of policy, the Company monitors these investments in private securities on a quarterly basis, and determines whether any impairment in their value would require a charge to current earnings. At December 31, 2002, the Company included approximately $15.3 million of investments in private securities in other assets. There were no charges to current earnings in 2002, 2001, or 2000 for impairments of these investments. Recognition of impairments for these securities may cause variability in earnings.

Derivatives and hedging activities

Biogen has operations in Europe, Japan, Australia and Canada in connection with the sale of AVONEX. Biogen also receives royalty revenues based on worldwide product sales by its licensees. As a result, Biogen’s financial position, results of operations and cash flows can be affected by fluctuations in foreign currency exchange rates (primarily Euro, Swedish krona, British pound, Japanese yen and Canadian dollar).

Biogen uses foreign currency forward contracts to manage foreign currency risk and does not engage in currency speculation. Biogen uses these forward contracts to hedge certain forecasted transactions denominated in foreign currencies. SFAS 133, “Accounting for Derivative Instruments and Hedging Activities”, requires that all derivatives be recognized on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. The Company assesses, both at its inception and on an on-going basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting the changes in cash flows of hedged items. The Company assesses hedge ineffectiveness on a quarterly basis and records the gain or loss related to the ineffective portion to current earnings to the extent significant. If the Company determines that a forecasted transaction is no longer probable of occurring, the Company discontinues hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the contract is recognized in current earnings. Under this policy, and in accordance with SFAS 133, earnings may vary if the forecasted transaction does not occur, or if there is material hedge ineffectiveness or if the hedge ceases to be highly effective.

Inventory capitalization

Inventories are stated at the lower of cost or market with cost determined under the first-in/first-out (“FIFO”) method. Included in inventory are raw materials used in the production of pre-clinical and clinical products, which are expensed as research and development costs when consumed.

Biogen capitalizes inventory costs associated with certain products prior to regulatory approval, based on management’s judgment of probable future commercialization. Biogen could be required to expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or delay of approval by necessary regulatory bodies. At December 31, 2002, capitalized inventory related to AMEVIVE, which received regulatory approval in the U.S. in January 2003, was $25 million. At December 31, 2002, capitalized inventory related to the pre-filled syringe formulation of AVONEX, which has not yet received regulatory approval, was $3.7 million.

Biogen writes down obsolete or otherwise unmarketable inventory to its estimated net realizable value. If the actual realizable value is less than that estimated by Biogen, additional inventory write-downs may be required. The Company wrote down $6.8 million of unmarketable inventory during 2002, of which $4.2 million was charged to research and development expense for product not yet commercialized, and the remainder was charged to cost of product revenues.

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Patents

The costs associated with successful defenses and patent applications are capitalized and amortized on a straight-line basis over estimated useful lives up to 15 years. The carrying value of patents is regularly reviewed by the Company and impairments are recognized when the expected future operating cash flows derived from the patents is less than the carrying value. Recognition of patent impairments may cause variability in earnings.

Income taxes

Income tax expense includes a provision for income tax contingencies which management believes is adequate and appropriate.

Research and development expenses

Research and development expenses are comprised of costs incurred in performing research and development activities including salaries and benefits, facilities costs, overhead costs, clinical trial and related clinical manufacturing costs, contract services and other outside costs. Research and development costs, including upfront fees and milestones paid to collaborators, are expensed as incurred. The timing of upfront fees and milestone payments in the future may cause variability in future research and development expense. Clinical trial costs include costs associated with contract research organizations (“CROs”). The invoicing from CROs for services rendered can lag several months. The Company accrues the cost of services rendered in connection with CRO activities based on its estimate of management fees, site management and site monitoring costs, and data management costs. The Company maintains regular communication with its CRO vendors to gauge the reasonableness of its estimates. Differences between actual clinical trial costs and estimated clinical trial costs have not been material and are adjusted for in the period which they become known. Under this policy, research and development expense can vary due to accrual adjustments related to clinical trials.

Loans

In connection with certain of its research collaborations, the Company has extended loans or made loan commitments to collaborators. On a quarterly basis, the loans are monitored for potential impairment, based on the probability of the collection of the full amount due under the loan according to each loan’s terms. Should it be determined that it is not probable that the Company will be able to collect all interest and principal due, the Company recognizes a corresponding impairment charge to current earnings.

Pensions

The Company has a defined benefit pension plan (the “Plan”) which provides benefits to all of its full-time U.S. employees. The Company assumed an expected long-term rate of return on Plan assets of 9.00% for 2002. This rate is based on a review of historical returns for both the equity and fixed income portfolios and the current Plan asset allocation of 80% equity and 20% fixed income. The assumed rate of return is reviewed periodically and adjusted, as appropriate, to reflect trends in returns and changes in asset allocation assumptions.

Based on recent discussions about the current economic climate and a review of industry benchmarks, it is anticipated that the assumption for long-term rate of return for 2003 will be lowered to 8.75%. Based on sensitivity analysis, the Company expects that a 25 basis point rate reduction will result in an increase in pension expense of approximately $70,000.

The market-related value of Plan assets is determined using the fair value method.

Contingencies and litigation

There has been, and Biogen expects there may be significant litigation in the industry regarding regulatory, pricing, and patents and other intellectual rights. The Company has determined that no liabilities are required to be recorded at this time for potential losses relating to current and potential litigation, as the Company will accrue for losses when they become probable and estimable. Certain adverse unfavorable rulings or decisions in the future could create variability or have a material adverse effect on the Company’s future results of operations and financial position.

New Accounting Pronouncements

In July 2002, the FASB issued SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized at its fair market value when the liability is incurred, rather than at the date of an entity’s commitment to an exit plan. The provisions of SFAS 146 are effective for exit or disposal activities that are initiated after December 31, 2002. The adoption of SFAS 146 is not expected to have a material effect on the Company’s financial statements.

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In November 2002, the FASB issued FASB Interpretation No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34.” FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also requires that a guarantor recognize, at the inception of a guarantee, a liability for the fair value of certain guarantees. The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 are effective for financial statement periods ending after December 15, 2002.

Under its charter, the Company has agreed to indemnify any person who is made a party to any action or threatened with any action as a result of such person’s serving or having served as an officer or director of the Company or having served, at the Company’s request, as an officer or director of another company. The indemnification does not apply if the person is adjudicated not to have acted in good faith in the reasonable belief that his or her actions were in the best interests of the Company. The indemnification obligation survives termination of the indemnified party’s involvement with the Company but only as to those claims arising from such person’s role as an officer or director. The Company has separate indemnification agreements with certain of its officers and directors that mirror the charter provisions. The maximum potential amount of future payments that the Company could be required to make under the charter provision and the corresponding indemnification agreements is unlimited; however, the Company has Director and Officer insurance policies that, in most cases, would limit its exposure and enable it to recover a portion of any future amounts paid. As a result of the insurance policy coverage, the estimated fair value of these indemnification provisions is minimal. All of these indemnification provisions were grandfathered under the provisions of FIN 45 as they were in effect prior to December 31, 2002. Accordingly, we have no liabilities recorded for these provisions as of December 31, 2002.

The Company enters into indemnification provisions under its agreements with other companies in its ordinary course of business, typically with business partners, contractors, clinical sites and customers. Under these provisions the Company generally indemnifies and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2002.

In December 2002, the FASB issued SFAS 148, “Accounting for Stock-Based Compensation-Transition and Disclosure — An Amendment of SFAS No. 123.” SFAS 148 amends SFAS 123, “Accounting for Stock-Based Compensation” to provide alternative methods of transition for those companies who voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS 123 to require prominent disclosures in both the annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition and annual disclosure provision of SFAS 148 are effective for fiscal years ending after December 15, 2002. The Company has not adopted the fair value method of accounting for stock-based compensation, and will continue to apply APB 25 for its stock-based compensation plans. The Company has incorporated the disclosure requirements of SFAS 148 at December 31, 2002, which require a tabular pro forma presentation of net income had SFAS 123 been adopted by the Company in the “Summary of Significant Accounting Policies” footnote of the financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51.” FIN 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved. Variable interest entities that effectively disperse risk will not be consolidated unless a single party holds an interest or combination of interests that effectively recombines risks that were previously dispersed. FIN 46 also requires enhanced disclosure requirements related to variable interest entities. FIN 46 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. The adoption of FIN 46 is not expected to have a material effect on the Company’s financial statements.

Outlook

Safe Harbor

In addition to historical information, this annual report contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements. Reference is made in particular to forward-looking statements regarding the anticipated level of future product sales, royalty revenues, expenses and profits, the timing of clinical trials, the potential outcome of clinical programs, regulatory approvals, the marketing of additional products the impact of competitive products, the anticipated outcome of pending or anticipated litigation and patent-related proceedings, facility expansion and the value of investments in certain marketable securities. These and all other forward-looking statements are made based on Biogen’s current belief as to the outcome and timing of such future events. Factors which could cause actual results to differ from Biogen’s expectations and which could negatively impact Biogen’s financial condition and results of operations are discussed below and elsewhere in this annual report. Unless required by law, Biogen does not undertake any obligation to publicly update any forward-looking statements.

Dependence on AVONEX and AMEVIVE Sales

Biogen’s ability to sustain increases in revenues and profitability is primarily dependent on the level of revenues and profitability from AVONEX and AMEVIVE sales. The level of revenues from sales of AVONEX will depend on a number of factors, including: Biogen’s ability to sustain market share of AVONEX in light of competitive products for the treatment of multiple sclerosis (“MS”), continued market

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acceptance of AVONEX worldwide; Biogen’s ability to maintain a high level of physician and patient satisfaction with AVONEX; the nature of regulatory and pricing decisions related to AVONEX worldwide; the overall growth of the MS market; the extent to which AVONEX continues to receive and maintains reimbursement coverage; the success of ongoing development related to AVONEX in expanded MS indications; the success of ongoing development of the pre-filled syringe formulation of AVONEX; and the continued accessibility of third parties to vial, label, and distribute AVONEX on acceptable terms.

AMEVIVE was approved in the U.S. in January 2003. In February 2003, Biogen withdrew its application for approval to market AMEVIVE in the EU. Biogen’s decision was based on a determination by the Committee for Proprietary Medicinal Products, the scientific advisory board of the regulatory authority in the EU, that more clinical information is needed to approve AMEVIVE.

Biogen plans to develop the additional information necessary to obtain approval of AMEVIVE for psoriasis patients in the EU. Developing the data and re-filing the application may take several years and there is no assurance that Biogen will ever obtain approval of AMEVIVE in the EU. There is also no assurance that our commercial efforts in the U.S. will be successful. The level of revenues from sales of AMEVIVE in the U.S. will depend on a number of factors, including: the ability to gain and to sustain market share and to continue to increase market share of AMEVIVE as the competitive landscape for AMEVIVE becomes more challenging; Biogen’s ability to maintain a high level of physician and patient satisfaction with AMEVIVE; the nature of regulatory and pricing decisions related to AMEVIVE worldwide; the extent to which AMEVIVE receives and maintains adequate reimbursement coverage; and the accessibility of third parties to vial, label, and distribute AMEVIVE on acceptable terms.

Competition

Biogen faces increasing competition from other products for the treatment of relapsing forms of MS. In 2002, AVONEX competed in the U.S. and EU markets primarily with four products: COPAXONE® glatiramer acetate, sold by Teva Neuroscience, Inc. (“Teva”) in the U.S. and co-promoted in by Teva and Aventis Pharma in the EU; BETASERON®, sold by Berlex in the U.S. and sold under the name BETAFERON® by Schering A.G. in the EU; NOVANTRONE® (mitoxantrone for injection) sold by Amgen, Inc. (“Amgen”) and Serono S.A. in the U.S. and sold by Amgen in the EU; and REBIF®, which was launched in the U.S. by Serono, Inc. (“Serono”) in March 2002. Serono announced in July 2002 that it reached an agreement to co-promote REBIF in the U.S. with Pfizer Inc. A number of companies, including Biogen, are working to develop products to treat MS which may in the future compete with AVONEX. AVONEX also faces competition from off-label uses of drugs approved for other indications. Some of Biogen’s current competitors are also working to develop alternative formulations for delivery of their products which may in the future compete with AVONEX. Biogen believes that competition among treatments for MS will be based on product performance, service and price.

AMEVIVE competes with existing therapies for moderate-to-severe psoriasis, such as oral retinoids, steroids, methotrexate and cyclosporin, along with other drugs, as discussed below, approved for other indications. In the future, AMEVIVE will also compete with new drugs currently in development for psoriasis, drugs now approved for other indications that may be approved for psoriasis, and off-label uses of drugs approved for other indications. Genentech and Xoma Corporation are co-developing RAPTIVA® (efalizumab), an antibody designed to block certain immune cells as a potential treatment for moderate-to-severe psoriasis. Genentech has filed for regulatory approval of the drug in the U.S. Serono has an exclusive license to RAPTIVA in the EU and other countries and has filed for regulatory approval of the drug in the EU. ENBREL® (etanercept), a drug sold by Amgen, Inc., has been approved by the FDA as a treatment for psoriatic arthritis, a joint disease that can be associated with the skin plaques of moderate to severe chronic plaque psoriasis. In January 2003, Amgen announced positive results from a Phase 3 clinical study of ENBREL in the treatment of moderate to severe plaque psoriasis and is conducting a second Phase 3 clinical study in psoriasis. Centocor, Inc. sells REMICADE® (infliximab) worldwide as a treatment for other indications, including rheumatoid arthritis, and has completed a Phase 2 proof of concept study for REMICADE as a potential treatment for psoriasis. HUMIRA® (adalimumab), a drug sold by Abbott Laboratories, was also recently approved by the FDA as a treatment for rheumatoid arthritis. Abbott is undertaking clinical trials in psoriasis and psoriatic arthritis. In addition, a number of other companies are working to develop products to treat psoriasis which may ultimately compete with AMEVIVE.

Royalty Revenue

Biogen receives royalty revenues which, prior to 2001, contributed a significant amount to its overall profitability. Royalty revenues decreased significantly in recent years and through the third quarter of 2002 primarily as the result of patent expirations and a royalty dispute with Schering-Plough. In October 2002, Biogen settled its dispute with Schering-Plough over royalties on U.S. sales of alpha interferon products. The Company received a final settlement payment resulting in a net gain of $37.2 million. In addition, Schering-Plough agreed, effective October 1, 2002, to commence royalty payments on U.S. sales of alpha interferon products under an interference settlement entered into in 1998. Under the terms of the interference settlement, Schering-Plough agreed to pay Biogen royalties commencing in mid-2002 under certain patents to be issued to Hoffman-La Roche Inc. (“Roche”) and Genentech in consideration of Biogen’s assignment to Schering-Plough of the alpha interferon patent application that had been the subject of the settled interference with a Roche/Genentech patent. Schering-Plough entered into an agreement with Roche as part of settlement of the interference. The first of the Roche/Genentech patents was issued on November 19, 2002 and has a seventeen-year term. Even with resolution of the dispute with Schering-Plough, royalty revenues may fluctuate as a result of future patent expirations and other factors such as pricing reforms, health care reform initiatives, other legal and regulatory developments and the introduction of competitive products may have an impact on product sales by Biogen’s licensees. In addition, sales levels of products sold by Biogen’s licensees may fluctuate from quarter to quarter due to the timing and extent of major events such as new indication approvals or government-sponsored programs. Since Biogen is not involved in the development or sale of products by its licensees, it cannot be certain of the timing or potential impact of factors which may affect sales by licensees. See “Outlook — Patents and Other Proprietary Rights.”

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Patents and Other Proprietary Rights

Biogen has numerous issued patents and patent applications pending on a number of its processes and products. Biogen has also obtained rights to certain patents under licenses with third parties which provide for the payment of royalties by Biogen. There can be no assurances that Biogen’s existing patents or others, if obtained, will substantially protect or commercially benefit Biogen. In addition, Biogen does not know to what extent its pending patent applications or patent applications licensed from third parties will be granted or whether any of Biogen’s patents will prevail if they are challenged in litigation. Also, there is also no assurance that third parties have not or will not be granted patents claiming subject matter necessary to Biogen’s business. Biogen is aware that others, including various universities and companies working in the biotechnology field, have also filed patent applications and have been granted patents in the U.S. and in other countries claiming subject matter potentially useful or necessary to Biogen’s business. Some of those patents and patent 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. For example, Genentech has been granted patents and is prosecuting other patent applications in the U.S. 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 host cells. Genentech has offered to Biogen and others in the industry non-exclusive licenses under some of those patents and patent applications for various proteins and in various fields of use, but not for others. 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, and 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. Biogen is also aware that Genentech has been granted patents and is presently prosecuting other patent applications in the U.S. and certain other countries pertaining to technology referred to as immunoadheson technology. Genentech may allege that its patents on such immunoadheson technology are infringed by Biogen’s commercial activities with AMEVIVE. Biogen has had discussions with Genentech and is evaluating these patents to determine if a license should be taken. The ultimate scope and validity of Genentech’s immunoadheson patents and the availability and ultimate cost of acquiring such rights, currently cannot be determined.

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. See also “Legal Matters.”

Products

AVONEX and AMEVIVE are currently the only products sold by Biogen. Biogen’s long-term viability and growth will depend on the successful development and commercialization of other products from its research and development activities and collaborations. Biogen continues to expand its development efforts related to other potential products in its pipeline. The expansion of the pipeline may include increases in spending on internal projects, the acquisition of third-party technologies or products or other types of investments. Product development involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. Success in preclinical and early clinical trials does not ensure that later stage or large-scale clinical trials will be successful. Many important factors affect Biogen’s ability to successfully develop and commercialize its other potential products, including the ability to obtain and maintain necessary patents and licenses, to demonstrate safety and efficacy of drug candidates at each stage of the clinical trial process, to overcome technical hurdles that may arise, to meet applicable regulatory standards, to obtain reimbursement coverage for the products, to receive required regulatory approvals, to be capable of producing drug candidates in commercial quantities at reasonable costs, to compete successfully against other products and to market products successfully. Success in early stage clinical trials or preclinical work does not ensure that later stage or larger scale clinical trials will be successful. Even if later stage clinical trials are successful, the risk exists that unexpected concerns may arise from analysis of data or from additional data or that obstacles may arise or issues be identified in connection with review of clinical data with regulatory authorities or that regulatory authorities may disagree with Biogen’s view of the data or require additional data or information or additional studies. There can be no assurance that Biogen will be successful in its efforts to develop and commercialize new products.

Pricing Pressures

In the U.S., many pharmaceutical and biologic products are subject to increasing pricing pressures, which could be significantly impacted by the outcome of the current national debate over Medicare reform. If the Medicare program provided outpatient pharmaceutical coverage for its beneficiaries, the federal government, through its enormous purchasing power under the program, could demand discounts from pharmaceutical and biotechnology companies that may implicitly create price controls on prescription drugs. On the other hand, a Medicare drug reimbursement provision may increase the volume of pharmaceutical drug purchases, offsetting at least in part these potential price discounts. In addition, Managed Care Organizations (“MCOs”), institutions and other government agencies continue to seek price discounts. Government efforts to reduce Medicare and Medicaid expenses are expected to increase the use of MCOs. This may result in managed care’s influencing prescription decisions for a larger segment of the population. In addition, certain states have proposed and certain other states have adopted various programs to control prices for their seniors’ drug programs, including price or patient reimbursement constraints, restrictions on access to certain products, importation from other countries and bulk purchasing of drugs.

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Biogen encounters similar regulatory and legislative issues in most other countries. In the EU and some other international markets, the government provides health care at low direct cost to consumers and regulates pharmaceutical prices or patient reimbursement levels to control costs for the government-sponsored health care system. This international patchwork of price regulation may lead to inconsistent prices and some third-party trade in Biogen’s products from markets with lower prices. Such trade exploiting price differences between countries could undermine our sales in markets with higher prices.

Manufacturing

Biogen currently produces all of its bulk drug products at its manufacturing facilities located in Cambridge, Massachusetts and Research Triangle Park, North Carolina. Problems with manufacturing processes could result in product defects, which could require Biogen to delay shipment of products, recall products previously shipped or be unable to supply products at all. In addition, any prolonged interruption in the operations of Biogen’s manufacturing facilities could result in cancellations of shipments or loss of product in the process of being manufactured. Because Biogen’s manufacturing processes are highly complex and are subject to a lengthy FDA approval process, alternative qualified production capacity may not be available on a timely basis or at all. Biogen sources all of its fill-finish and final product storage operations, along with a substantial portion of its packaging operations, to a concentrated group of third party contractors. Problems with the operations of these third party contractors could also require Biogen to delay shipment of saleable products, recall products previously shipped or be unable to supply products at all. Difficulties or delays in Biogen’s manufacturing of existing or new products, including difficulties or delays in the operations of third party contractors retained by Biogen to perform fill-finish, packaging and storage of saleable products, could increase Biogen’s costs, cause Biogen to lose revenue or market share and damage Biogen’s reputation.

Litigation and Government Regulation

Biogen encounters, and may in the future encounter, legal difficulties, any of which could preclude commercialization of products or adversely affect its business or financial condition, including: claims asserting antitrust violations, claims asserting securities law violations, claims asserting violations of the Federal False Claim Act, Anti-Kickback Act, the Prescription Drug Marketing Act or other violations in connection with Medicare and/or Medicaid reimbursement, derivative actions, product liability claims, disputes over intellectual property rights (including patents) and environmental matters. There is no assurance that Biogen will be successful in asserting its rights in current or future litigation, including the current litigation with Rentschler and the current AWP litigation described under “Legal Matters”. Biogen’s business is also subject to extensive government regulation and oversight. Biogen may also become subject to governmental actions which could adversely affect its business or financial condition, including: (i) new laws, regulations and judicial decisions related to health care availability, method of delivery and payment for health care products and services, (ii) changes in the Federal Food and Drug Administration and foreign regulatory approval processes that may delay or prevent the approval of new products and result in lost market opportunity, (iii) new laws, regulations and judicial decisions affecting pricing or marketing and (iv) changes in the tax laws relating to Biogen’s operations.

Market Risk

Biogen has exposure to financial risk in several areas including changes in foreign exchange rates and interest rates. Biogen attempts to minimize its exposures by using certain financial instruments, for purposes other than trading, in accordance with the Biogen’s overall risk management guidelines. See “Critical Accounting Estimates” for information regarding Biogen’s accounting policies for financial instruments and disclosures of financial instruments.

Foreign Exchange

Biogen has operations in Europe, Japan, Australia and Canada in connection with the sale of AVONEX. Biogen also receives royalty revenues based on worldwide product sales by its licensees. As a result, Biogen’s financial position, results of operations and cash flows can be affected by fluctuations in foreign currency exchange rates (primarily Euro, Swedish krona, British pound, Japanese yen and Canadian dollar).

Biogen uses foreign currency forward contracts to manage foreign currency risk and does not engage in currency speculation. Biogen uses these forward contracts to hedge certain forecasted transactions denominated in foreign currencies. A hypothetical adverse 10% movement in foreign exchange rates compared to the U.S. dollar across all maturities (for example, a strengthening of the Euro) would result in a hypothetical loss in fair value of approximately $10 million. Biogen’s use of this methodology to quantify the market risk of such instruments should not be construed as an endorsement of its accuracy or the accuracy of the related assumptions. The quantitative information about market risk is necessarily limited because it does not take into account operating transactions.

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Interest Rates

Biogen is exposed to risk of interest rate fluctuations in connection with its variable rate long-term debt. The Term Loan requires annual principal payments of $1.7 million through 2004, with the balance due in 2005. The Construction Loan requires annual principal payments of $3.2 million through 2006, with the balance due in 2007. At December 31, 2002, the carrying values of the Term Loan and the Construction Loan approximated fair value.

Biogen has fixed its interest rates on the Term Loan and Construction Loan by entering interest rate swap agreements under which Biogen exchanges the difference between 7.5% and 7.75%, respectively, and a floating rate. The notional principal balances on the interest rate swap agreements are exactly equal to the principal on the underlying debt agreements. All other relevant terms of the interest rate swap agreements (including the index rate, reset period, etc.) exactly match the underlying loan agreements. The fair value of the interest rate swap agreements at December 31, 2002, representing the cash requirements of Biogen to settle the agreements, was approximately $5.1 million. Terms of Biogen’s loan agreements include various covenants, including financial covenants which require Biogen to maintain minimum net worth, cash flow and various financial ratios.

The fair value of Biogen’s cash, cash equivalents, marketable securities, long-term debt and interest rate swap agreements are subject to change as a result of potential changes in market interest rates. The potential change in fair value for interest rate sensitive instruments has been assessed on a hypothetical 100 basis point adverse movement across all maturities. Biogen estimates that such hypothetical adverse 100 basis point movement would not have materially impacted net income or materially affected the fair value of interest rate sensitive instruments.

Stock Price

The stock prices of biotechnology companies are subject to significant fluctuations. The stock price may be affected by a number of factors including, but not limited to clinical trial results and other product development events, the outcome of litigation, the financial impact of changes in the value of investments, including investments in other biotechnology companies, the decisions relating to intellectual property rights and the entrance of competitive products into the market, changes in reimbursement policies or other practices related to the pharmaceutical industry or other industry and market changes or trends. In addition, if revenues or earnings in any quarter fail to meet the investment community’s expectations, there could be an immediate adverse impact on Biogen’s stock price.

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Consolidated Statements of Income
Biogen, Inc. and Subsidiaries

(in thousands, except per share amounts)

For the years ended December 31,		2002			2001		2000
Revenues:
	Product	$	1,034,357		$	970,546	$	760,292
	Royalties		114,007			71,766		165,373
	Total revenues		1,148,364			1,042,312		925,665
Costs and expenses:
	Cost of product revenues		151,440			131,870		112,928
	Cost of royalty revenues		8,719			4,640		12,270
	Research and development		367,567			314,556		302,840
	Selling, general & administrative		324,001			231,048		169,271
	Total costs and expenses		851,727			682,114		597,309
	Income from operations		296,637			360,198		328,356
	Other income (expense), net		(20,042	)		29,299		158,749
	Income before income taxes		276,595			389,497		487,105
	Income taxes		77,447			116,814		153,528
	Net Income	$	199,148		$	272,683	$	333,577
	Basic earnings per share	$	1.33		$	1.84	$	2.24
	Diluted earnings per share	$	1.31		$	1.78	$	2.16
Shares used in calculating:
	Basic earnings per share		149,337			148,355		148,743
	Diluted earnings per share		151,930			152,916		154,602

See accompanying notes to consolidated financial statements.

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Consolidated Balance Sheets
Biogen, Inc. and Subsidiaries

(in thousands, except share amounts)

As of December 31,		2002			2001
Assets
Current assets
	Cash and cash equivalents	$	45,113		$	54,042
	Marketable securities		821,996			744,065
	Accounts receivable, less allowance for doubtful accounts of $1,920 and $2,082, respectively		171,067			177,582
	Deferred tax assets		38,592			44,108
	Inventory		95,378			51,919
	Other current assets		43,878			26,011
	Total current assets		1,216,024			1,097,727
Property and equipment, net			738,059			555,998
Patents, net			15,994			16,562
Marketable securities			3,757			12,183
Other assets			33,154			38,576
		$	2,006,988		$	1,721,046
Liabilities and Shareholders’ Equity
Current liabilities
	Accounts payable	$	64,876		$	50,944
	Current portion of long-term debt		4,888			4,888
	Current taxes payable		73,824			90,131
	Accrued expenses and other		182,745			148,979
	Total current liabilities		326,333			294,942
Long-term debt, less current portion			37,410			42,297
Long-term deferred tax liability			33,678			16,789
Other long-term liabilities			14,146			18,186
Commitments and contingencies			—			—
Shareholders’ equity
	Common stock, par value $0.01 per share (375,000,000 shares authorized; 151,705,636 shares issued in 2002 and 2001)		1,517			1,517
	Additional paid-in capital		829,993			808,076
	Treasury stock, at cost, 1,618,195 and 3,233,351 shares in 2002 and 2001, respectively		(90,844	)		(176,123	)
	Retained earnings		838,756			705,893
	Accumulated other comprehensive income		15,999			9,469
	Total shareholders’ equity		1,595,421			1,348,832
		$	2,006,988		$	1,721,046

     See accompanying notes to consolidated financial statements.

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Consolidated Statements of Cash Flows
Biogen, Inc. and Subsidiaries

(in thousands)

For the years ended December 31,				2002			2001			2000
Cash Flows from Operating Activities
	Net Income			$	199,148		$	272,683		$	333,577
	Adjustments to reconcile net income to net cash provided from operating activities
	Depreciation and amortization				45,100			37,023			39,035
	Equity in net loss (income) of unconsolidated affiliate				3,392			(610	)		—
	Stock based compensation				2,356			829			(249	)
	Deferred income taxes				22,642			(18,100	)		25,203
	Realized loss (gain) on sale of non-current marketable securities				301			(32,143	)		(101,129	)
	Tax benefit of stock options				19,561			35,075			81,023
	Impairment of non-current marketable securities				10,095			27,942			—
	Loan loss reserve				10,500			—			—
	Write down of inventory to net realizable value				6,831			—			—
	Changes in:
		Accounts receivable			11,788			(35,442	)		(7,357	)
		Inventory			(50,290	)		(12,391	)		502
		Other current and other assets			(26,883	)		(29,285	)		(35,332	)
		Accounts payable, accrued expenses and other current and long-term liabilities			12,536			71,227			31,114
	Net cash flows from operating activities				267,077			316,808			366,387
Cash Flows from Investing Activities
	Purchases of current marketable securities				(467,256	)		(827,807	)		(627,168	)
	Proceeds from sales and maturities of current marketable securities				404,808			734,599			606,087
	Proceeds from sales of non-current marketable securities				493			35,827			120,199
	Investment in collaborators				(6,000	)		—			(5,000	)
	Acquisitions of property and equipment, net				(220,341	)		(191,019	)		(194,892	)
	Additions to patents				(1,214	)		(4,781	)		(4,713	)
	Net cash flows from investing activities				(289,510	)		(253,181	)		(105,487	)
Cash Flows from Financing Activities
	Repayments on long-term debt				(4,887	)		(4,888	)		(4,888	)
	Purchases of treasury stock				(8,384	)		(88,284	)		(300,192	)
	Issuance of common stock and option exercises				27,379			35,034			35,955
	Other				153			(17	)		(13	)
	Net cash flows from financing activities				14,261			(58,155	)		(269,138	)
	Effect of exchange rate changes on cash				(757	)		(167	)		55
Net increase (decrease) in cash and cash equivalents					(8,929	)		5,305			(8,183	)
Cash and cash equivalents, beginning of the year					54,042			48,737			56,920
Cash and cash equivalents, end of the year				$	45,113		$	54,042		$	48,737
Supplemental Cash Flow Data
Cash paid during the year for:
			Interest	$	3,491		$	3,954		$	4,314
			Income taxes	$	51,548		$	79,002		$	42,683

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Shareholders’ Equity
Biogen, Inc. and Subsidiaries

													Accumulated
				Additional									Other			Total
		Common		Paid-in			Treasury			Retained			Comprehensive			Shareholders’
(in thousands)		Stock		Capital			Stock			Earnings			Income			Equity
Balance, December 31, 1999		$	1,507	$	676,673		$	(96,284	)	$	352,016		$	45,618		$	979,530
Net income											333,577						333,577
Unrealized gains/losses on marketable securities, net of tax of $6,791														(16,152	)		(16,152	)
Unrealized gains/losses on foreign currency forward contracts, net of tax of $1,686														(5,311	)		(5,311	)
Unrealized gains/losses on interest rate swaps, net of tax of $789														(1,458	)		(1,458	)
Translation adjustment														(321	)		(321	)
	Total comprehensive income																310,335
Exercise of options and related tax benefits			10		95,748			162,900			(141,680	)					116,978
Treasury stock purchased								(300,192	)								(300,192	)
Compensation expense related to stock options					(249	)											(249	)
Balance, December 31, 2000		$	1,517	$	772,172		$	(233,576	)	$	543,913		$	22,376		$	1,106,402
Net income											272,683						272,683
Unrealized gains/losses on marketable securities, net of tax of $4,750														(11,352	)		(11,352	)
Unrealized gains/losses on foreign currency forward contracts, net of tax of $52														(87	)		(87	)
Unrealized gains/losses on interest rate swaps, net of tax of $587														(981	)		(981	)
Translation adjustment														(487	)		(487	)
	Total comprehensive income																259,776
Exercise of options and related tax benefits					35,075			145,737			(110,703	)					70,109
Treasury stock purchased								(88,284	)								(88,284	)
Compensation expense related to stock options					829												829
Balance, December 31, 2001		$	1,517	$	808,076		$	(176,123	)	$	705,893		$	9,469		$	1,348,832
Net income											199,148						199,148
Unrealized gains/losses on marketable securities, net of tax of $3,427														6,820			6,820
Unrealized gains/losses on foreign currency forward contracts, net of tax of $3,064														(5,369	)		(5,369	)
Unrealized gains/losses on interest rate swaps, net of tax of $601														(1,198	)		(1,198	)
Translation adjustment														6,277			6,277
	Total comprehensive income																205,678
Exercise of options and related tax benefits					19,561			93,663			(66,285	)					46,939
Treasury stock purchased								(8,384	)								(8,384	)
Compensation expense related to stock options					2,356												2,356
Balance, December 31, 2002		$	1,517	$	829,993		$	(90,844	)	$	838,756		$	15,999		$	1,595,421

See accompanying notes to consolidated financial statements.

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Notes to Consolidated Financial Statements
Biogen, Inc. and Subsidiaries

1. Summary of Significant Accounting Policies

Business

Biogen, Inc. (“Biogen” or the “Company”) is a global biopharmaceutical company that develops, manufactures and markets novel human therapeutic products. Biogen’s primary focus is developing pharmaceutical products that meet unmet medical needs particularly in its core therapeutic areas of neurology, dermatology and rheumatology. Biogen currently sells AVONEX® (Interferon beta-1a) for the treatment of relapsing multiple sclerosis (“MS”) and, commencing in 2003, AMEVIVE® (alefacept) for the treatment of adult patients with moderate-to-severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy. Biogen also receives revenues from royalties on sales by our licensees of a number of products covered under patents that Biogen controls. In addition, Biogen has a pipeline of development stage products and a number of research programs in our core therapeutic areas and in other areas of interest. Certain items in prior years’ financial statements have been reclassified to conform to the current year’s presentation.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Additionally, the Company maintains a 50% equity interest in two joint ventures outside the U.S. The primary purpose of these entities is the distribution of AVONEX in Switzerland and AMEVIVE in Italy. All material intercompany balances and transactions have been eliminated. The Company records its share of the earnings or losses of these entities to other income (expense).

Use of Estimates

The preparation of consolidated financial statements requires the Company to make estimates and judgements that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to revenue recognition and bad debts, marketable securities, derivatives and hedging activities, inventories, patents, income taxes, research and development, loans, pensions, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Translation of Foreign Currencies

The functional currency for most of the Company’s foreign subsidiaries is the local currency. Assets and liabilities are translated at current rates of exchange. Income and expense items are translated at the average exchange rates for the year. Adjustments resulting from the translation of the financial statements of the Company’s foreign operations into U.S. dollars are excluded from the determination of net income and are accumulated in a separate component of shareholders’ equity. The U.S. dollar is the functional currency for certain foreign subsidiaries. The Company’s subsidiaries which have the U.S. dollar as the functional currency are remeasured into U.S. dollars using current rates of exchange for monetary assets and liabilities and historical rates of exchange for nonmonetary assets. Foreign exchange transaction gains and losses are included in the results of operations in other income, net. The Company had foreign exchange gains totaling $2.2 million in 2002, and foreign exchange losses of $1.2 million and $2.8 million in 2001 and 2000, respectively.

Cash and Cash Equivalents

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.

Fair Value of Financial Instruments

The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses and other, approximate fair value due to their short-term maturities. Marketable securities are carried at fair value based on quoted market prices, consistent with the requirements of Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. The fair values of trading

24

securities, interest rate swaps and foreign currency forward contracts are based on quoted market prices or pricing models using current market rates. The Company’s long-term debt approximates fair value.

Inventories

Inventories are stated at the lower of cost or market with cost determined under the first-in/first-out (“FIFO”) method. Included in inventory are raw materials used in the production of pre-clinical and clinical products which are expensed as research and development costs when consumed. The components of inventories for the periods ending December 31, are as follows:

(in thousands)	2002		2001
Raw materials	$	27,027	$	14,754
Work in process		25,892		17,004
Finished goods		42,459		20,161
	$	95,378	$	51,919

Biogen capitalizes inventory costs associated with certain products prior to regulatory approval, based on management’s judgment of probable future commercialization. Biogen would be required to expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or delay of approval by necessary regulatory bodies. At December 31, 2002, capitalized inventory related to AMEVIVE, which received regulatory approval in the U.S. in January 2003, was $25 million. At December 31, 2002, capitalized inventory related to pre-filled syringe formulation of AVONEX, which has not yet received regulatory approval, was $3.7 million.

Biogen writes down obsolete or otherwise unmarketable inventory to its estimated net realizable value. If the actual realizable value is less than that estimated by Biogen, additional inventory write-downs may be required. The Company wrote down $6.8 million of unmarketable inventory during 2002, of which $4.2 million was charged to research and development expense for product not yet commercialized, and the remainder was charged to cost of product revenues. The Company did not have any material writedowns of inventory for the years ended December 31, 2001 or 2000.

Marketable Securities

The Company invests its excess cash balances in short-term marketable securities, principally corporate notes and government securities. At December 31, 2002, substantially all of the Company’s securities were classified as “available-for-sale”. All available-for-sale securities are recorded at fair market value and unrealized gains and losses are included in accumulated other comprehensive income in shareholders’ equity, net of related tax effects. Realized gains and losses and declines in value, if any, judged to be other than temporary on available-for-sale securities are reported in other income or expense.

As part of its strategic product development efforts, the Company invests in equity securities of certain biotechnology companies with which it has collaborative agreements. As a matter of policy, Biogen determines on a quarterly basis whether any decline in the fair value of a marketable security is temporary or other than temporary. Unrealized gains and losses on marketable securities are included in other comprehensive income in shareholders’ equity, net of related tax effects. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value with a charge to current earnings. The factors that the Company considers in its assessments include the fair market value of the common stock, the duration of the stock’s decline, prospects for favorable clinical trial results, new product initiatives and new collaborative agreements.

The Company also invests in equity securities of certain companies whose securities are not publicly traded and fair value is not readily available. These investments are recorded using the cost method of accounting and, as a matter of policy, the Company monitors these investments in private securities on a quarterly basis and determines whether any impairment in their value would require a charge to current earnings.

Property and Equipment

Property and equipment is carried at cost, subject to review of impairment for significant assets whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the useful life or the term of the respective lease. Maintenance costs are expensed as incurred. Buildings and equipment are depreciated over estimated useful lives ranging from 15 to 40 and 3 to 20 years, respectively. The Company capitalizes certain incremental costs associated with the validation effort required for licensing by the FDA of manufacturing equipment for the production of a commercially approved drug. These costs include primarily direct labor and material and are incurred in preparing the equipment for its intended use. The validation costs are amortized over the life of the related equipment.

Patents

The costs associated with successful patent defenses and patent applications are capitalized and amortized on a straight-line basis over estimated useful lives up to 15 years. Accumulated amortization of patent costs was $11.3 million and $15.7 million as of December 31, 2002 and 2001, respectively. The carrying value of patents is regularly reviewed by the Company and impairments are recognized

25

when the expected future operating cash flows derived from the patent is less than their carrying value. For the year ending December 31, 2002, 2001, and 2000 the Company wrote off certain of its patents, which resulted in a charge of $2 million in 2002.

Loans

In connection with certain of its research collaborations, the Company has extended loans or made loan commitments to collaborators. On a quarterly basis, the loans are monitored for potential impairment, based on the probability of the collection of the full amount due under the loan according to each loan’s terms. Should it be determined that it is not probable that the Company will be able to collect all interest and principal due, the Company recognizes a corresponding impairment charge to current earnings.

Derivatives and Hedging Activities

Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”, (“SFAS 133”) requires that all derivatives be recognized on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. The Company assesses, both at its inception and on an on-going basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting the changes in cash flows of hedged items. The Company assesses hedge ineffectiveness on a quarterly basis and records the gain or loss related to the ineffective portion to current earnings to the extent significant. If the Company determines that a forecasted transaction is no longer probable of occurring, the Company discontinues hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the contract is recognized in current earnings.

Comprehensive Income

Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income”, (“SFAS 130”), requires the display of comprehensive income and its components as part of the Company’s full set of financial statements. Comprehensive income is comprised of net income and other comprehensive income. Other comprehensive income includes certain changes in equity that are excluded from net income, such as translation adjustments and unrealized holding gains and losses on available-for-sale marketable securities and certain derivative instruments, net of tax. The Consolidated Statements of Shareholders’ Equity reflect comprehensive income for years ended December 31, 2002, 2001 and 2000 of $205.7 million, $259.8 million and $310.3 million, respectively.

In accordance with SFAS 133, the Company records an adjustment to other comprehensive income to recognize at fair value all derivatives designated as cash flow hedging instruments, which comprised unrealized gains or losses related to the Company’s interest rate swaps. During 2000, the Company recorded $1.5 million of unrealized losses, net of tax to other comprehensive income reflecting the decrease in the fair value of the interest rate swaps and at December 31, 2000 had a cumulative unrealized loss, net of tax, of $1.1 million. During 2001, the Company recorded $1 million of unrealized losses, net of tax to other comprehensive income reflecting the decrease in the fair value of the interest rate swaps and at December 31, 2001 had a cumulative unrealized loss, net of tax, of $2.1 million. During 2002, the Company recorded $1.2 million of unrealized losses, net of tax to other comprehensive income reflecting the decrease in the fair value of the interest rate swaps and at December 31, 2002 had a cumulative unrealized loss, net of tax, of $3.3 million.

The Company has foreign currency forward contracts to hedge specific transactions denominated in foreign currencies. During 2000, the fair value of the Company’s foreign currency forward contracts decreased by $5.3 million. At December 31, 2000, the Company had cumulative unrealized gains, net of tax, of $1.4 million on its foreign currency forward contracts. During 2001, the fair value of the Company’s foreign currency forward contracts decreased by approximately $0.1 million, net of tax. At December 31, 2001, the Company had cumulative unrealized gains, net of tax, of $1.3 million on its foreign currency forward contracts. During 2002, the fair value of the Company’s foreign currency forward contracts decreased by approximately $5.4 million, net of tax. At December 31, 2002, the Company had cumulative unrealized losses, net of tax, of $4.1 million on its foreign currency forward contracts.

Segment Information

Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information”, (“SFAS 131”) establishes standards for reporting information on operating segments in interim and annual financial statements. The Company’s chief operating decision-makers review the profit and loss of the Company on an aggregate basis and manage the operations of the Company as a single operating segment. Accordingly, the Company operates in one segment, which is the business of developing, manufacturing and marketing drugs for human health care.

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Revenue Recognition and Accounts Receivable

SEC Staff Accounting Bulletin No. 101 (“SAB 101”) provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. SAB 101 establishes the SEC’s view that it is not appropriate to recognize revenue until all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectibility is reasonably assured. Further, SAB 101 requires that both title and the risks and rewards of ownership be transferred to the buyer before revenue can be recognized. The Company believes that its revenue recognition policies are in compliance with SAB 101.

Revenues from product sales are recognized when product is shipped and title and risk of loss has passed to the customer. Revenues are recorded net of applicable allowances for returns, rebates and other applicable discounts and allowances. The Company prepares its estimates for sales returns and allowances, discounts and rebates quarterly based primarily on historical experience updated for changes in facts and circumstances, as appropriate.

In February 2002, the FASB Emerging Issues Task Force (“EITF”) released EITF Issue No. 01-09 (“EITF 01-09”), “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products)”. EITF 01-09 states that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, should be characterized as a reduction of revenue when recognized in the vendor’s income statement, rather than a sales and marketing expense. The Company has various contracts with distributors that provide for discounts and rebates. These contracts are classified as a reduction of revenue. The Company also maintains select customer service contracts with distributors and other customers in the distribution channel. In accordance with EITF 01-09, the Company has established the fair value of these contracts and, as provided by EITF 01-09, classified these customer service contracts as sales and marketing expense. If the Company had concluded that sufficient evidence of the fair value did not exist for these contracts, the Company would have been required to classify these costs as a reduction of revenue. The adoption of EITF 01-09 did not have a significant impact on the Company’s financial statements.

The Company receives royalty revenues under license agreements with a number of third parties that sell products based on technology developed by the Company or to which the Company has rights. The license 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. The relevant period estimates of sales are based on interim data provided by licensees and analysis of historical royalties paid to the Company (adjusted for any changes in facts and circumstances, as appropriate). The Company maintains regular communication with its licensees in order to gauge the reasonableness of its estimates. Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period which they become known, typically the following quarter. Historically, adjustments have not been material based on actual amounts paid by licensees. There are no future performance obligations on the part of the Company under these license agreements.

Revenue is not recognized in any circumstances unless collectibility is reasonably assured.

Biogen maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of Biogen’s customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required, which could affect future earnings.

Research and Development Expenses

Research and development expenses are comprised of costs incurred in performing research and development activities including salaries and benefits, facilities costs, overhead costs, clinical trial and related clinical manufacturing costs, contract services and other outside costs. Research and development costs, including upfront fees and milestones paid to collaborators, are expensed as incurred. The Company has entered into certain research agreements in which it shares costs with its collaborator. The Company records these costs as research and development expenses. Certain of these costs are reimbursed by the Company’s collaborator and are recorded as a reduction of research and development expense.

Earnings per Share

The Company calculates earnings per share in accordance with Statement of Financial Accounting Standards No. 128, “Earnings per Share” (“SFAS 128”). SFAS 128 requires the presentation of “basic” earnings per share and “diluted” earnings per share. Basic earnings per share is computed by dividing the net income available to common shareholders by the weighted average number of shares of common stock outstanding. For purposes of calculating diluted earnings per share the denominator includes both the weighted average number of shares of common stock outstanding and the number of dilutive common stock equivalents such as stock options and warrants, as determined using the treasury stock method.

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Shares used in calculating basic and diluted earnings per share for the periods ending December 31, are as follows:

(in thousands)	2002		2001		2000
Weighted average number of shares of common stock outstanding		149,337		148,355		148,743
Dilutive stock options and warrants		2,593		4,561		5,859
Shares used in calculating diluted earnings per share		151,930		152,916		154,602

Dilutive securities include options outstanding under the Company’s stock option plans. Options to purchase 11.2 million shares, 3.8 million shares and 2.7 million shares were outstanding at December 31, 2002, 2001, and 2000, respectively, but not included in the computations of diluted earnings per share because the options’ exercise prices were greater than the average market price during the periods.

Accounting for Stock Based Compensation

The Company has several stock-based compensation plans which are described more fully in Note 10. The Company applies APB Opinion No. 25 “Accounting for Stock Issued to Employees” in accounting for its plans and applies Statement of Financial Accounting Standards No. 123 “Accounting for Stock Issued to Employees” (“SFAS 123”) for disclosure purposes only. The SFAS 123 disclosures include pro forma net income and earnings per share as if the fair value-based method of accounting had been used. Stock issued to non-employees is accounted for in accordance with SFAS 123 and related interpretations.

If compensation cost for the Company’s 2002, 2001 and 2000 grants under the stock-based compensation plans, including costs related to prior years grants had been determined based on SFAS 123, the Company’s pro forma net income, and pro forma earnings per share for the years ending December 31, would have been as follows:

(in thousands, except per share data)	2002		2001		2000
Reported net income	$	199,148	$	272,683	$	333,577
Pro forma stock compensation expense, net of tax		49,387		48,259		39,165
Pro forma net income	$	149,761	$	224,424	$	294,412
Reported basic earnings per share	$	1.33	$	1.84	$	2.24
Pro forma basic earnings per share	$	1.00	$	1.51	$	1.98
Reported diluted earnings per share	$	1.31	$	1.78	$	2.16
Pro forma diluted earnings per share	$	0.99	$	1.47	$	1.90

The fair value of options granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	2002			2001			2000
Expected dividend yield		0	%		0	%		0	%
Expected stock price volatility		45	%		44	%		45	%
Risk-free interest rate		5.75	%		5.5	%		6.9	%
Expected option term in years		7.4			7.5			5.5

The effects of applying SFAS 123 in this pro forma disclosure are not indicative of future amounts. SFAS 123 did not apply to awards prior to 1995, and additional awards in future years are anticipated.

2. Financial Instruments

Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and marketable securities. Wholesale distributors and large pharmaceutical companies account for the majority of the accounts receivable and collateral is generally not required. To mitigate the risk, the Company monitors the financial performance and credit worthiness of its customers. The Company invests its excess cash balances in marketable debt securities, primarily 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.

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The average maturity of the Company’s marketable securities as of December 31, 2002 and 2001 was 28 months and 29 months, respectively. Proceeds from maturities and other sales of marketable securities, which were primarily reinvested, for the years ended December 31, 2002, 2001 and 2000 were approximately $405 million, $735 million and $606 million, respectively. The cost of securities sold is determined based on the specific identification method. Realized gains and (losses) on these sales for the years ended December 31, 2002, 2001 and 2000 were $2.7 million, $6.1 million and $(1.8) million, respectively.

The following is a summary of marketable securities:

			Gross		Gross
			Unrealized		Unrealized		Amortized
(in thousands)	Fair Value		Gains		Losses		Cost
December 31, 2002:
U.S. Government securities	$	296,419	$	12,568	$	122	$	283,973
Corporate debt securities		525,577		18,569		468		507,476
	$	821,996	$	31,137	$	590	$	791,449
Marketable securities, noncurrent	$	3,757	$	—	$	1,537	$	5,294
December 31, 2001:
U.S. Government securities	$	252,838	$	6,760	$	346	$	246,424
Corporate debt securities		491,227		12,794		445		478,878
	$	744,065	$	19,554	$	791	$	725,302
Marketable securities, noncurrent	$	12,183	$	—	$	—	$	12,183

The Company uses interest rate swap agreements to mitigate the risk associated with its floating rate debt. The fair value of the interest rate swap agreements at December 31, 2002, representing the cash requirements of the Company to settle the agreements, approximated $5.1 million and was included in accrued expenses and other. The fair value of the interest rate swap agreements at December 31, 2001, representing the cash requirements of the Company to settle the agreements, was approximately $3.3 million and was included in accrued expenses and other. The Company has designated the interest rate swaps as cash flow hedges. There were no amounts of hedge ineffectiveness related to the Company’s interest rate swaps during 2002 and 2001, and no gains or losses were excluded from the assessment of hedge effectiveness. The Company records the differential to be paid or received on the interest rate swaps as incremental interest expense. The Company expects approximately $2.7 million in losses related to its interest rate swaps to affect earnings in 2003.

The Company has foreign currency forward contracts to hedge specific forecasted transactions denominated in foreign currencies. All foreign currency forward contracts have durations of ninety days to 12 months. These contracts have been designated as cash flow hedges and accordingly, to the extent effective, any unrealized gains or losses on these foreign currency forward contracts are reported in other comprehensive income. Realized gains and losses for the effective portion are recognized with the underlying hedge transaction. The Company assesses hedge ineffectiveness on a quarterly basis and records the gain or loss related to the ineffective portion to current earnings to the extent significant. If the Company determines that a forecasted transaction is no longer probable of occurring, the Company discontinues hedge accounting for the affected portion of the hedge instrument and any related unrealized gain or loss on the contract is recognized in current earnings. The notional settlement amount of the foreign currency forward contracts outstanding at December 31, 2002 was approximately $91.9 million. These contracts had a fair value of $6.4 million, representing an unrealized loss, and were included in other current liabilities at December 31, 2002. The notional settlement amount of the foreign currency forward contracts outstanding at December 31, 2001 was approximately $113.4 million. These contracts had a fair value of $2.0 million, representing an unrealized gain, and were included in other current assets at December 31, 2001.

In 2002, approximately $1.3 million of losses were recognized in earnings due to hedge ineffectiveness. Additionally, in 2002, approximately $1.1 million of losses were recognized in earnings as a result of the discontinuance of cash flow hedges upon determining that it was no longer probable that the original forecasted transaction would occur. The Company recognized $6.4 million of losses in product revenue and $2.1 million of losses in royalty revenue for the settlement of certain effective cash flow hedge instruments during the year ended December 31, 2002. These settlements were recorded in the same period as the related forecasted transactions affecting earnings. The Company expects approximately $6.4 million of unrealized losses at December 31, 2002 to affect earnings in 2003 related to its foreign currency forward contracts.

In 2001, there were no significant amounts recognized in earnings due to hedge ineffectiveness or as a result of the discontinuance of cash flow hedges upon determining that it was no longer probable that the original forecasted transaction would occur. The Company recognized $6.9 million of gains in product revenue and $2 million of gains in royalty revenue for the settlement of certain effective cash flow hedge instruments during the year ended December 31, 2001. These settlements were recorded in the same period as the related forecasted transactions affecting earnings.

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In 2000, there were no significant amounts recognized in earnings due to hedge ineffectiveness. During 2000, the Company recognized $977,000 in other income as a result of the discontinuance of cash flow hedges upon determining that it was no longer probable that the original forecasted transaction would occur. The Company recognized $12.7 million of gains in product revenue and $3.7 million of gains in royalty revenue for the settlement of certain effective cash flow hedge instruments during the year ended December 31, 2000. These settlements were recorded in the same period as the related forecasted transactions affecting earnings.

3. Borrowings

As of December 31, 2002, the Company had $12.5 million outstanding under a floating rate loan with a bank (the “Term Loan”). The Term Loan is collateralized by the Company’s laboratory and office building in Cambridge, Massachusetts. The Term Loan provides for annual principal payments of $1.7 million in each of the years 1996 through 2004 with the balance due May 8, 2005. The Company also entered into an interest rate swap agreement, with the same bank, fixing its interest rate at 7.5% during the remaining term of the loan, payable semi-annually.

As of December 31, 2002, the Company had $29.8 million outstanding under a floating rate loan agreement with a bank for financing the construction of its biological manufacturing facility in North Carolina (the “Construction Loan”). The Construction Loan is collateralized by the facility. Payments of $805,000 are due quarterly through 2006 with the balance due in 2007. The Company also entered into an interest rate swap agreement, with the same bank, fixing its interest rate at 7.75% during the remaining term of the loan, payable quarterly.

The Term Loan and Construction Loan agreements include various covenants, including financial covenants, which require the Company to maintain minimum net worth, cash flow and various financial ratios. The Company’s long-term debt obligations are carried at face value, which approximates fair market value.

Long-term debt at December 31, consists of the following:

(in thousands)	2002			2001
Term Loan due 2005	$	12,501		$	14,168
Construction Loan due 2007		29,797			33,017
		42,298			47,185
Current portion		(4,888	)		(4,888	)
	$	37,410		$	42,297

4. Consolidated Balance Sheets Details

Property and equipment:	December 31,
(in thousands)	2002		2001
Land	$	32,687	$	23,532
Buildings		233,436		170,504
Leasehold improvements		47,504		65,381
Equipment		309,521		249,887
Construction in progress		330,657		218,521
Total cost		953,805		727,825
Less accumulated depreciation		215,746		171,827
	$	738,059	$	555,998

Depreciation expense was $45.6 million, $36.9 million and $27.8 million for 2002, 2001 and 2000, respectively.

Accrued expenses and other:	December 31,
(in thousands)	2002		2001
Royalties and licensing fees	$	37,921	$	34,361
Legal settlement accrual		55,000		20,000
Other		89,824		94,618
	$	182,745	$	148,979

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5. Pensions

The Company has a defined benefit pension plan which provides benefits to all of its full-time U.S. 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 in fixed income and equity securities.

The components of net periodic pension cost for each of the three years ended December 31 are summarized below:

(in thousands)	2002			2001			2000
Service cost	$	5,098		$	3,644		$	3,314
Interest cost		2,678			2,039			1,799
Expected return on plan assets		(2,130	)		(1,655	)		(1,258	)
Amortization of prior service cost		14			43			43
Amortization of net actuarial loss		271			16			86
Net pension cost	$	5,931		$	4,087		$	3,984

Reconciliations of projected benefit obligations, fair value of plan assets and the funded status of the plans as of December 31, are presented below:

(in thousands)	2002			2001
Change in projected benefit obligation
Net projected benefit obligation at the beginning of the year	$	(29,990	)	$	(24,434	)
Service cost		(5,098	)		(3,644	)
Interest cost		(2,678	)		(2,039	)
Actuarial loss		(5,271	)		(190	)
Gross benefits paid		734			317
Net projected benefit obligation at the end of the year		(42,303	)		(29,990	)
Change in plan assets
Fair value of plan assets at the beginning of the year		18,728			15,256
Actual return on plan assets		(3,779	)		(1,090	)
Employer contributions		10,550			5,000
Gross benefits paid		(596	)		(182	)
Administrative expenses		(143	)		(256	)
Fair value of plan assets at the end of the year		24,760			18,728
Funded status at the end of the year
Funded status at the end of the year		(17,543	)		(11,262	)
Unrecognized net actuarial loss		15,239			4,295
Unrecognized prior service cost		219			229
Net amount recognized at the end of the year	$	(2,085	)	$	(6,738	)
Weighted average assumptions at the end of the year		2002			2001
Discount rate		6.75	%		7.25	%
Expected return on plan assets		9.00	%		9.00	%
Rates of compensation increase		5.00	%		5.00	%

The Company’s unfunded supplemental retirement plan, as of December 31, 2002 has the projected benefit and the accumulated benefit obligations of $8.4 million and $5.7 million, respectively. As of December 31, 2001 the projected benefit and the accumulated benefit obligations were $5.9 million and $4.6 million, respectively.

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6. Other Income (Expense), Net

Total other income (expense), net consists of the following:

		December 31,
(in thousands)	2002			2001			2000
Interest income	$	41,217		$	44,128		$	42,965
Interest expense		(3,546	)		(3,954	)		(4,310	)
Other income (expense)		(57,713	)		(10,875	)		120,094
Total other income (expense), net	$	(20,042	)	$	29,299		$	158,749

Other income (expense) included the following (in thousands):

December 31,	2002			2001			2000
Impairments of non-current marketable securities	$	(10,095	)	$	(27,942	)	$	—
Reserve for outstanding loan to a collaborator		(10,500	)		—			—
Gain (loss) on sale on non-current marketable securities		(301	)		32,143			101,129
Donation for establishment of Biogen Foundation		(15,000	)		—			—
Settlement of Schering-Plough dispute		37,240			—			—
Settlement of Berlex dispute		(55,000	)		(20,000	)		—
Realized gains in third party acquisition of investment		—			—			24,132
Equity in net income (loss) of unconsolidated affiliate		(3,392	)		610			—
Gain (loss) on sale of current marketable securities		2,703			6,147			(1,846	)
Miscellaneous		(3,368	)		(1,833	)		(3,321	)
Total other income (expense)	$	(57,713	)	$	(10,875	)	$	120,094

As part of its quarterly assessments, the Company assessed the unrealized losses on its investments in Curis Inc. and Targeted Genetics Corporation (see “Note 1 – Summary of Significant Accounting Policies”), and determined that the positive evidence suggesting that these investments would recover to at least the Company’s purchase price was not sufficient to overcome the presumption that the current market price of the investments was the best indicator of value at those dates. Accordingly, the related unrealized losses of approximately $10.1 million and $28 million were reclassified from other comprehensive income to current expense in 2002 and 2001, respectively. Sales of non-current marketable securities resulted in losses of $0.3 million in 2002, gains of $32.1 million in 2001, and gains of $101.1 million in 2000.

In connection with the Company’s assessment at December 31, 2002, $1.5 million of unrealized losses related to these marketable securities were determined to be temporary.

In connection with the Company’s loan policy described in Note 1, during the third quarter of 2002, the Company recorded a $10.5 million charge for the establishment of a reserve related to an outstanding loan to Targeted. Based on a review of the financial condition of the borrower at September 30, 2002, the Company determined that it was no longer probable that the loan would be repaid.

In October 2002, the Company established The Biogen Foundation, a private, U.S. based, non-profit philanthropic organization. In December 2002, the Company made a charitable contribution of $15 million to fund The Biogen Foundation. The Foundation is to operate exclusively for the benefit of charitable, educational and scientific purposes. Certain executive officers and other employees of the Company serve as directors and officers of the Foundation. The Company classifies charitable contributions to other income (expense).

During the fourth quarter of 2002, the Company and Schering-Plough settled their dispute on the issue of whether and to what extent Schering-Plough has an obligation to pay royalties in the U.S. on sales of its alpha interferon products. The Company received a final settlement payment resulting in a net gain of $37.2 million, which was classified to other income (expense).

In the fourth quarter of 2002, the Company recorded a $55 million charge related to the final settlement of a patent infringement dispute with Berlex. The $55 million payment for settlement of litigation was charged to other income (expense) in the fourth quarter of 2002. In 2001, the Company reported an initial charge of $20 million as part of the settlement agreement. See Note 9.

In 2000, the Company realized gains of approximately $24.1 million upon the acquisition by third parties of two companies in which the Company had invested.

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7. Income Taxes

The components of income before income taxes and of income tax expense (benefit) for each of the three years ended December 31, are as follows:

(in thousands)		2002			2001			2000
Income before income taxes:
	Domestic	$	244,515		$	298,669		$	379,489
	Foreign		32,080			90,828			107,616
		$	276,595		$	389,497		$	487,105
Income tax expense:
Current
	Federal	$	45,655		$	119,930		$	115,696
	State		6,173			12,911			11,969
	Foreign		2,975			1,917			1,098
		$	54,803		$	134,758		$	128,763
Deferred
	Federal	$	22,938		$	(16,257	)	$	25,344
	State		(294	)		(1,687	)		(579	)
			22,644			(17,944	)		24,765
Total income tax expense		$	77,447		$	116,814		$	153,528

Deferred tax assets (liabilities) are comprised of the following at December 31:

(in thousands)	2002			2001
Tax credits	$	831		$	25,440
Inventory and other reserves		37,761			18,288
Other		—			380
Deferred tax asset		38,592			44,108
Depreciation, amortization and other		(27,494	)		(10,365	)
Unrealized gain on investments		(6,184	)		(6,424	)
Deferred tax liabilities		(33,678	)		(16,789	)

A reconciliation of the U.S. federal statutory tax rate to the effective tax rate for the periods ending December 31 is as follows:

	2002			2001			2000
Statutory rate		35.0	%		35.0	%		35.0	%
State taxes		1.8			2.5			3.2
Foreign taxes		(5.6	)		(4.2	)		(2.6	)
Credits and net operating loss utilization		(3.4	)		(3.4	)		(3.3	)
Other		0.2			0.1			(0.8	)
Effective tax rate		28.0	%		30.0	%		31.5	%

At December 31, 2002, the Company had tax credits of approximately $831,000, which can be carried forward indefinitely. During 2002, management concluded that the likelihood of the Company realizing state tax benefits relating to research, development and investment credits previously recognized as deferred tax assets is remote. Accordingly, the Company’s deferred tax assets relating to tax credits were reduced by $24.6 million in 2002.

As of December 31, 2002, undistributed foreign earnings of non-U.S. subsidiaries included in consolidated retained earnings aggregated $339.4 million, exclusive of earnings that would result in little or no tax under current U.S. tax law. The Company intends to reinvest these earnings indefinitely in operations outside the U.S. It is not practicable to estimate the amount of additional tax that might be payable if such earnings were remitted to the U.S.

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8. Research Collaborations

In January 2003, the Company signed a collaboration agreement (the “IDEC Agreement”) with IDEC Pharmaceuticals Corporation (“IDEC”), under which Biogen and IDEC will collaborate on the development of three oncology therapeutics from Biogen’s pipeline of early-stage product candidates: an anti-lymphotoxin beta receptor (LTBR) monoclonal antibody, an anti-CRIPTO monoclonal antibody, and an interferon beta (INF-b) gene delivery product. Under the terms of the IDEC agreement, IDEC initially will be responsible for the development costs of the product candidates, until that time, if any, when the Company exercises its opt-in rights (which must be done within a certain timeframe) with respect to each specific product candidate. If the Company exercises its opt-in rights for a specific product, IDEC and the Company will share all subsequent costs related to that specific product and the Company will retain fifty percent of any economic benefit related to the product. If the Company chooses not to exercise its opt-in rights, the Company would be entitled to receive royalty payments from future sales of the specific products.

In December 2002, Biogen signed a collaboration agreement (the “Sunesis Agreement”) with Sunesis Pharmaceuticals, Inc. (“Sunesis”) under which Biogen and Sunesis will collaborate on the discovery and development of oral therapeutics for the treatment of inflammatory and autoimmune diseases. The parties will apply Sunesis’ proprietary fragment-based drug discovery technology, known as “tethering,” to generate small molecule leads that target select cytokines in the immune system. Under the terms of the Sunesis Agreement, the Company purchased 1.25 million shares of preferred stock of Sunesis for $6 million, the fair value of the shares. In addition, the Company paid a one-time non-refundable license fee of $3 million which was charged to research and development expense and acquired certain exclusive licenses to develop and commercialize certain compounds resulting from the collaboration. The Company accounts for its investment in Sunesis, which is included in other assets, using the cost method of accounting, subject to periodic review of impairment. The Company will pay Sunesis a quarterly license maintenance fee of $357,500 during the period commencing on April 1, 2004 through July 1, 2005. Additionally, Biogen agreed to enter into a Credit Facility Agreement (“Loan Agreement”) with Sunesis under which Biogen is obligated to loan Sunesis up to $4 million. No borrowings from the loan agreement were outstanding as of December 31, 2002. The Company has committed to paying Sunesis additional amounts upon the completion of certain future research milestones and first and second indication development milestones. If all the milestones were to be achieved, the Company would be required to pay up to an additional $60.5 million over the life of the agreement.

In April 2002, the Company signed a development and marketing collaboration agreement (the “Celltech Agreement”) with Celltech R&D Limited (“Celltech”) under which the Company and Celltech agreed to collaborate on the development and commercialization of a humanized anti-TNF alpha antibody known as “CDP571” with potential value in treating gastrointestinal disorders (including Crohn’s disease), psoriasis and other autoimmune disease conditions. Under the terms of the Celltech Agreement, Biogen and Celltech agreed to share costs for on-going development activities. In April 2002, the Company paid a one-time non-refundable initiation fee of $500,000, which was charged to research and development expense. Biogen incurred development expenses for CDP571 during the second and third quarter of 2002, and in the third quarter of 2002, ceased participation in development expenses associated with CDP571 due to unfavorable Phase III data. Through December 31, 2002, the Company incurred approximately $7 million of research and development expenses associated with CDP571. The Company does not expect to pay any additional amounts in this collaboration.

In July 2001, the Company signed a development and marketing collaboration agreement (the “ICOS Agreement”) with ICOS Corporation (“ICOS”), under which the Company and ICOS are collaborating worldwide on the development and commercialization of orally active, small molecule LFA-1 antagonists. Biogen and ICOS are currently developing an oral small molecule LFA-1 antagonist as a potential treatment for psoriasis. Under the terms of the ICOS Agreement, the Company paid ICOS a one-time, non-refundable license fee of $8 million, which was charged to research and development expense in 2001. Additionally, as part of the agreement, Biogen made available to ICOS a line of credit in the amount of $20 million, of which $10 million was available at December 31, 2002. The Company provided $6.8 million and $2.3 million from the line of credit to ICOS that was recorded as a loan receivable and later was charged to research and development expense in 2002 and 2001, respectively, upon the achievement of certain clinical milestones by ICOS. As of December 31, 2002, there was $1.0 million in borrowings outstanding under the credit facility. The Company has committed to providing milestone payments to ICOS upon the achievement of certain future events. If all the future milestones were to be achieved and commercialization were to be successful in excess of specified levels of sales, the Company would be required to pay up to an additional $92.5 million over the remaining life of the agreement.

In September 2000, the Company signed a collaborative research agreement (the “Eos Agreement”) with Eos Biotechnology, Inc. (“Eos”), under which the Company and Eos will collaborate in the research and development of novel targets for antibody and protein therapeutics in the area of breast cancer. Under the Eos Agreement, the Company purchased 1.9 million shares of preferred stock of Eos for $5 million. In addition, the Company paid a one-time non-refundable license fee of $6 million, which was charged to research and development expense and acquired certain exclusive, worldwide rights related to breast cancer-specific molecules for the use in the development of new antibody and secreted protein therapeutics. The Company accounts for its investment in Eos, which is included in other assets, using the cost method of accounting subject to periodic review of impairment. The Company provided Eos with research and development funding of $1.5 million in 2002, $1.5 million in 2001 and $250,000 in 2000. The research program under the Eos Agreement was terminated in December 2002, thereby relieving Biogen of any future commitments. In February 2003, Eos and Protein Design Labs, Inc. (“PDLI”) announced a definitive merger agreement under which PDLI would acquire 100% of the outstanding stock of Eos in a stock-for-stock transaction valued at $37.5 million. Upon completion of the merger, Biogen’s preferred shares of EOS would be converted into common stock of PDLI. The Company expects to record a writedown of approximately $3 million in the first quarter of 2003 related to its investment in Eos.

In August 2000, the Company signed a development and marketing collaboration agreement (the “Antegren Agreement”) with Elan Pharma International, Ltd, an affiliate of Elan Corporation, plc (“Elan”) under which the Company and Elan are collaborating in the development, manufacture and commercialization of ANTEGREN® (natalizumab), a humanized monoclonal antibody. The Company

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and Elan are currently developing ANTEGREN as a potential treatment for MS and Crohn’s disease. Under the terms of the Antegren Agreement, Biogen and Elan share costs for on-going development activities. The Company paid a one-time non-refundable license fee of $15 million in 2000, which was charged to research and development expense. The Company provided $7 million and $16 million to Elan for certain milestones achieved during the years 2002 and 2001, respectively, which were charged to research and development expense. As of December 31, 2002, Elan owed the Company $14.8 million, representing development expenses incurred by Biogen to be reimbursed by Elan. The Company has committed to paying Elan additional amounts upon the completion of certain future milestones. If all the future milestones were to be achieved, the Company would be required to pay up to an additional $14 million over the remaining life of the agreement. Elan is in the process of implementing a recovery plan to re-build its business. The Company does not believe that business issues facing Elan will have a material adverse impact on the Company’s rights to develop or commercialize ANTEGREN.

In July 1996, the Company signed a collaborative research and commercialization agreement (the “Ontogeny Agreement”) with Ontogeny, Inc. (“Ontogeny”), a private biotechnology company, for the development and commercialization of three specific proteins. In August 2000, Ontogeny merged with two other biotechnology companies to form Curis Inc. (“Curis”). As a shareholder in Ontogeny, Biogen received Curis common stock in exchange for the Company’s shares in Ontogeny. The Company provided $1 million of research funding to Ontogeny in 2000. Additionally, the Company provided $1.5 million upon termination of the Ontogeny Agreement, which was charged to research and development expense in 2000. At December 31, 2002 the Company retained approximately 166,000 shares of Curis common stock, and included the investment in long-term marketable securities available-for-sale.

In August 1995, the Company signed a collaborative research agreement (the “Genovo Agreement”) for the development of human gene therapy treatments with Genovo, Inc. (“Genovo”), a gene therapy research company. Under the Genovo Agreement, the Company acquired 380,000 shares of Genovo Series A Preferred stock for $4.5 million and acquired certain licensing rights. The Company accounted for this investment, which was included in other assets, using the equity method of accounting. The Company recorded its proportion of Genovo’s net losses as research and development expense in the amount of $3.9 million in 2000. In August 2000, Genovo entered into a merger agreement (“Targeted Merger Agreement”) with Targeted Genetics Corporation (“Targeted”). As a shareholder in Genovo, Biogen received Targeted common stock in exchange for the Company’s shares in Genovo. Also as part of the Targeted Merger Agreement, an existing $500,000 promissory note payable by Genovo to Biogen was converted into a no-interest promissory note from Targeted with a term of five years. Additionally, concurrently with the Targeted Merger Agreement, the Company entered into a development and marketing agreement and a funding agreement (the “Targeted Agreements”) for gene therapy research and development. The Targeted Agreements provide for a $10 million credit facility, of which $10 million of borrowings were outstanding as of December 31, 2002. Targeted also had an option to sell to the Company an additional $10 million of Targeted common stock at fair value. In September 2002, Targeted exercised an option to issue $4 million of common stock to Biogen. During the third quarter of 2002, the Company incurred a $10.5 million charge for the establishment of a reserve related to an outstanding loan to Targeted. Based on a review of the financial condition of Targeted at September 30, 2002, the Company determined that it was no longer probable that the loan would be repaid. The Company provided $1 million in 2002, $1 million in 2001 and $250,000 in 2000 for research funding to Targeted. The Company expects to fund research activities of Targeted related to the collaboration of $750,000 in 2003. At December 31, 2002 the Company retained approximately 8,963,402 shares of Targeted common stock, and included the investment in long-term marketable securities available-for-sale.

9. 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 2015, amounted to $22.7 million in 2002, $17.2 million in 2001, $14.9 million in 2000. 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, 2002, minimum annual rental commitments under noncancellable leases were as follows:

Year	(in thousands)
2003	$	20,411
2004		17,712
2005		15,438
2006		12,364
2007		12,137
Thereafter		43,976
Total minimum lease payments	$	122,038

The Company’s construction of a large scale manufacturing plant and a laboratory office building in Research Triangle Park, North Carolina was substantially completed in the first quarter of 2002. The Company continued its further expansion of its Research Triangle Park, North Carolina complex in 2002 with ongoing construction of several projects to create additional manufacturing

35

capacity. These additional projects are expected to be completed by the summer of 2003 at a total cost of approximately $93.3 million. As of December 31, 2002, the Company had committed $81.7 million for construction costs related to these additional projects, of which $73.5 million has been spent. The Company is also completing plans to build a manufacturing plant in Denmark. The Company expects that construction will commence in 2003 and be completed early in 2005, at an estimated cost of $250 million. At December 31, 2002, $47 million had been committed for construction costs related to the manufacturing plant in Denmark, of which $36.8 million has been spent.

In January 2002, the Company settled litigation with Berlex Laboratories, Inc. (“Berlex”). Berlex had claimed that the Company’s production of AVONEX in the U.S. infringed certain U.S. patents which the Company refers to as the “McCormick” patents. A District Court decision in 2000 rendered final judgment in the Company’s favor determining that the manufacture, use and sale of AVONEX in the U.S. did not infringe any of the claims of the asserted McCormick patents, but Berlex appealed the decision to the Court of Appeals for the Federal Circuit. Under the settlement agreement, the Company agreed to pay Berlex $20 million, and to make a second and final payment to Berlex if the Court of Appeals were to reverse the District Court’s previous ruling granting summary judgment in the Company’s favor. As part of the settlement, both parties agreed not to pursue further litigation about these patents. Biogen recorded a $20 million charge in “Other Income, net” in the fourth quarter of 2001 to account for the first payment to Berlex. Because of the substantive terms of the Berlex settlement arrangement were agreed to in the fourth quarter of 2001, the Company determined that the provisions of SFAS 5, “Accounting for Contingencies,” required that the Company account for this settlement in its December 31, 2001 financial statements. The guidance in Financial Accounting Standards Board (“FASB”), Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss, an Interpretation of SFAS 5”, requires that when an amount within the range of potential loss appears to be a better estimate that any other amount within the range, that amount should be accrued. It further requires that when no amount within the range is a better estimate than any other amount, the minimum amount in the range should be accrued. In the case of the Berlex settlement, Biogen determined at the time of the settlement that $20 million was both the best estimate of the Company’s potential loss, and the minimum amount in the range of potential losses. As a result, the Company recorded a charge of $20 million related to the settlement in its December 31, 2001 financial statements.

On January 31, 2003, the Court of Appeals decided that the District Court had properly construed the claims of the McCormick patents and that the Company did not literally infringe the McCormick patents. The Court of Appeals remanded the case to the District Court to determine if one of the Berlex patents might be infringed under a redefinition of the “doctrine of equivalents” recently handed down by the U.S. Supreme Court. As a result of the decision, the Company was required to make a final payment to Berlex of $55 million under the settlement agreement which was recorded in December 2002. The previously negotiated contingent settlement eliminated the need for further litigation and resolved the entire dispute. The settlement agreement provides that Biogen receive a fully paid up, royalty free, non-exclusive license under the McCormick patent and a related patent held by Berlex. The Company negotiated a license in order to avoid future uncertainty surrounding the rights to the Berlex patent for Biogen and its distribution channel partners. The McCormick patents are not utilized by Biogen and, as such, do not hold value and will not provide future economic benefit to the Company. The $55 million payment for settlement of litigation was charged to other income (expense) in the fourth quarter of 2002.

On October 13, 1998, the Company filed an opposition with the Opposition Division of the European Patent Office opposing the grant of a European patent (the “Rentschler II Patent”) issued to Dr. Rentschler Biotechnologie GmbH (“Rentschler”) claiming compositions of matter of beta interferon having specific glycosylation patterns. On November 6, 2002, a hearing took place with regard to the Company’s opposition of the Rentschler II Patent in the European Patent Office. The Opposition Board of the European Patent Office ruled in an appealable decision that the present claims of the Rentschler II Patent should be maintained. Following this decision, Rentschler Biotechnologie GmbH & Co. KG sued our German subsidiary, Biogen GmbH, for infringement of the Rentschler II Patent in Germany. The Company intends to appeal the decision of the Opposition Division to the European Patent Office’s Technical Board of Appeals. The Company believes that it has arguments to support the invalidation of the Rentschler II Patent before the Technical Board of Appeals. A decision on the appeal is not likely to be issued until at least two years after the Company files the appeal. Biogen also believes that it has solid arguments to support its defense against Rentschler’s infringement claim in the German infringement lawsuit. A hearing in the German proceeding is scheduled to occur in September 2003, with a decision likely to follow within a month or two after the hearing. The non-prevailing party will then have the right to appeal the decision. A ruling on such an appeal would likely take another 12 to 18 months. The Company is closely examining the Opposition Board’s recent written ruling and the claims made in the German infringement suit, and exploring various alternatives for handling these matters. If the Company were to be enjoined from selling AVONEX in Germany by the German district court pending our appeal of an adverse judgment, or, if the Company lost on appeal in the German infringement suit, or if, through other legal proceedings Rentschler were to obtain a determination that the Company’s sales of AVONEX in other European countries infringes a valid Rentschler II patent, such a result or results could have a material adverse effect on the Company’s results of operations and financial condition. As a result, an estimate of any potential loss or range of loss cannot be made at this time.

Along with most other major pharmaceutical and biotechnology companies, the Company has been named as a defendant in a lawsuit filed by the County of Suffolk, New York, in the U.S. District Court in the Eastern District of New York in January 2003. In March 2003, the case was conditionally transferred to the United States District Court for the District of Massachusetts. The complaint alleges that the defendants overstated the Average Wholesale Price (“AWP”) for drugs for which Medicaid provides reimbursement (“Covered Drugs”), marketed and promoted the sale of Covered Drugs to providers based on the providers ability to

36

collect inflated payments from the government and Medicaid beneficiaries that exceeded payments possible for competing drugs, provided financing incentives to providers to over-prescribe Covered Drugs or prescribe Covered Drugs in place of competing drugs, and overcharged Medicaid for illegally inflated Covered Drugs reimbursements. The complaint further alleges that the defendants failed to accurately report the “best price” on the Covered Drugs to New York’s Medicaid program. Under Medicaid, pharmaceutical and biotechnology companies agree to pay Medicaid programs a rebate for each product reimbursed by Medicaid. The amount of the rebate is often the difference between the average manufacturers price and the best price reported by companies to the Medicaid program. Plaintiff claims that it was harmed because it could have allotted the dollars that it wrongfully spent on Medicaid to other public needs. Plaintiff has brought the action under the Racketeering Influence and Corrupt Organizations Act (RICO), and for breach of contract, unjust enrichment, Medicaid fraud and common law fraud. The Company intends to vigorously defend itself against all of the allegations and claims in this lawsuit. As a result, an estimate of any potential loss or range of loss cannot be made at this time.

10. 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 to holders of the Company’s common stock of rights (the “Old Rights”) to purchase shares of Series A Junior Participating Preferred Stock (the “Old Preferred Stock”). Each Old Right entitled the registered holder to purchase from the Company one one-hundredth of a share of Old Preferred Stock upon the terms and subject to the conditions set forth in a Rights Agreement, dated as of May 8, 1989, between the Company and The First National Bank of Boston (the “Old Plan”). The Old Plan and the Old Rights expired on May 8, 1999. Consequently, on April 16, 1999, the Board of Directors declared a dividend to holders of the Company’s common stock of one new preferred share purchase right (a “New Right”) for each outstanding share of common stock. The New Rights were granted on May 8, 1999 pursuant to a new Rights Agreement, dated May 8, 1999, between the Company and State Street Bank and Trust Company, as Rights Agent (the “New Plan”). Each New Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A-1 Junior Participating Preferred Stock, par value $.01 per share (“New Preferred Stock”), at a price of $850 per one one-thousandth of a share of New Preferred Stock, subject to adjustment. Each one one-thousandth of a share of New Preferred Stock has rights, privileges and preferences which make its value approximately equal to the value of one share of the Company’s common stock. The New 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 or exchange offer, the consummation of which would result in the ownership of 20% or more of the outstanding common stock of the Company. Once the New Rights become exercisable, and in some circumstances if additional conditions are met, each New Right will entitle the Company’s shareholders (other than the acquirer) to, among other things, purchase common stock at a substantial discount. Unless earlier redeemed or exchanged by the Company, the New Rights expire on May 8, 2009. The Company is entitled to redeem the New Rights at a price of $.001 per New Right.

The Old Preferred Stock has been eliminated and replaced with the New Preferred Stock. At December 31, 2002, the Company had 250,000 shares of New Preferred Stock authorized for use in connection with the New Plan.

Share Option and Purchase Plans

The Company has several stock-based compensation plans. The Company applies APB Opinion No. 25 “Accounting for Stock Issued to Employees” in accounting for its plans and applies Statement of Financial Accounting Standards No. 123 “Accounting for Stock Issued to Employees” (“SFAS 123”) for disclosure purposes only. The SFAS 123 disclosures include pro forma net income and earnings per share as if the fair value-based method of accounting had been used. Stock issued to non-employees is accounted for in accordance with SFAS 123 and related interpretations. Included in compensation expense for the periods ending December 31, 2002, 2001 and 2000 were approximately $2.4 million, $829,000, and $(249,000), respectively, related to stock based compensation plans for employees and non-employees.

The Company has several plans and arrangements under which it may grant options to employees, Directors and Scientific Board members to purchase common stock. Under the terms of the Company’s stock-based compensation plans, approximately 54 million options may be granted. Option grants are typically made under the 1985 Non-Qualified Stock Option Plan and the 1987 Scientific Board Stock Option Plan (the “Plans”). Options under the Plans are granted at no less than 100% of the fair market value on the date of grant. Options generally become exercisable over various periods, typically 4 to 7 years for employees and 3 years for Directors and Scientific Board members, and have a maximum term of 10 years.

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Activity under these plans for the periods ending December 31, is as follows:

(shares are in thousands)	2002					2001					2000
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding, Jan. 1		17,757		$	38.81		16,917		$	31.70		17,938		$	24.53
Granted		3,956			43.41		3,840			57.13		2,731			55.34
Exercised		(1,797	)		13.05		(2,079	)		15.48		(3,250	)		11.61
Canceled		(706	)		52.40		(921	)		37.24		(502	)		34.17
Outstanding, Dec. 31		19,210		$	41.67		17,757		$	38.81		16,917		$	31.70
Options exercisable		10,351					9,466					9,093
Available for grant		6,035					9,081					1,578
Weighted average fair value of options granted				$	24.65				$	31.77				$	24.34

The table below summarizes options outstanding and exercisable at December 31, 2002:

(shares are in thousands)	Options Outstanding						Options Exercisable
			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of	Number		Contractual		Exercise		Number		Exercise
Exercise Price	Outstanding		Life		Price		Exercisable		Price
$0.00-$10.00		914		1.54	$	8.74		914	$	8.74
$10.01-$20.00		3,973		3.41		16.08		3,884		16.03
$20.01-$30.00		613		5.63		23.79		456		23.17
$30.01-$40.00		446		8.10		33.05		168		33.11
$40.01-$50.00		5,327		8.37		42.49		1,769		41.39
$50.01-$60.00		5,925		8.23		55.68		1,954		55.37
$60.01-$70.00		595		7.90		64.33		236		64.32
$70.01-$80.00		1,264		6.90		72.41		862		72.30
Over $80.00		153		6.81		86.11		108		86.40
Total		19,210			$	41.67		10,351	$	34.27

The Company also has two employee stock purchase plans covering substantially all of its employees. The plans allow 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 the plans are subject to certain limitations and may not exceed an aggregate of 1,000,000 shares; no shares may be issued after December 31, 2007. Through December 31, 2002, 556,557 shares have been issued under the stock purchase plans.

Stock Repurchase Program

On December 18, 2000, the Company announced that its Board of Directors had authorized the repurchase of up to 4 million shares of the Company’s common stock. The repurchased stock provides the Company with treasury shares for general corporate purposes, such as stock to be issued under employee stock option and stock purchase plans. During 2002, the Company repurchased approximately 145,000 shares of its common stock at a cost of $8.4 million. During 2001, the Company repurchased approximately 1.5 million shares of its common stock at a cost of $88.3 million. Approximately 2.4 million shares remain authorized for repurchase under this program at December 31, 2002. In the first quarter of 2003, the Company began open market repurchases for additional shares of its common stock under the program.

On February 22, 1999, the Company announced that its Board of Directors had authorized the repurchase of up to 8 million shares of the Company’s common stock. The repurchased stock provided the Company with treasury shares for general corporate purposes, such as stock to be issued under employee stock option and stock purchase plans. During 1999, the Company repurchased approximately 3.4 million shares of its common stock at a cost of $197.7 million. During 2000, the Company repurchased approximately 4.6 million shares of its common stock at a cost of $300.2 million, completing this program.

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11. Segment Information

The Company operates in one segment, which is the business of developing, manufacturing and marketing drugs for human health care. The chief operating decision-makers review the profit and loss of the Company on an aggregate basis and manage the operations of the Company as a single operating segment. The Company currently derives product revenues from sales of its AVONEX product for the treatment of relapsing forms of multiple sclerosis. The Company also derives revenue from royalties on worldwide sales by the Company’s licensees of a number of products covered under patents controlled by the Company, including alpha interferon and hepatitis B vaccines and diagnostic products. Revenues are primarily attributed from external customers to individual countries where earned based on location of the customer or licensee. At December 31, 2002, 2001, and 2000, product and royalty revenues from external customers in The Netherlands were approximately 11%, 11%, and 10% of total revenues, respectively.

The Company’s geographic information is as follows:

(in thousands)	US		Europe		Asia		Other		Total
December 31, 2002:
Product revenue from external customers	$	743,419	$	275,657	$	—	$	15,281	$	1,034,357
Royalty revenue from external customers		65,518		42,493		5,827		169		114,007
Long-lived assets		734,215		55,129		1,163		457		790,964
December 31, 2001:	US		Europe		Asia		Other		Total
Product revenue from external customers	$	710,095	$	246,581	$	—	$	13,870	$	970,546
Royalty revenue from external customers		45,164		21,911		4,468		223		71,766
Long-lived assets		614,026		9,214		—		79		623,319
December 31, 2000:	US		Europe		Asia		Other		Total
Product revenue from external customers	$	551,804	$	199,714	$	—	$	8,774	$	760,292
Royalty revenue from external customers		120,578		26,414		16,479		1,902		165,373
Long-lived assets		497,347		6,125		—		113		503,585

The Company received revenue from three wholesale distributors and a specialty distributor in 2002 accounting for a total of 20%, 19%, 17%, and 16% of total product and royalty revenue. The Company received revenue from three wholesale distributors and a specialty distributor in 2001 accounting for a total of 21%, 16%, 14%, and 14% of total product and royalty revenue. The Company received revenue from five unrelated parties in 2000 accounting for a total of 18%, 13%, 12%, 11% and 10% of total product and royalty revenue.

12. Quarterly Financial Data (Unaudited)

(in thousands,	First		Second		Third			Fourth			Total
except per share amounts)	Quarter		Quarter		Quarter			Quarter			Year
2002
Total revenues	$	288,343	$	269,263	$	288,328		$	302,430		$	1,148,364
Product revenue		265,985		250,542		261,563			256,267			1,034,357
Royalties revenue		22,358		18,721		26,765			46,163			114,007
Total expenses and taxes		223,230		233,992		235,661			236,291			929,174
Other income (expense), net		7,028		8,104		(10,459	)		(24,715	)		(20,042	)
Net income		72,141		43,375		42,208			41,424			199,148
Basic earnings per share		0.49		0.29		0.28			0.28			1.33
Diluted earnings per share		0.47		0.29		0.28			0.27			1.31
2001
Total revenues	$	237,047	$	260,585	$	264,097		$	280,583		$	1,042,312
Product revenue		219,997		243,140		248,107			259,302			970,546
Royalties revenue		17,050		17,445		15,990			21,281			71,766
Total expenses and taxes		181,387		200,266		204,421			212,854			798,928
Other income (expense), net		16,463		11,533		10,147			(8,844	)		29,299
Net income		72,123		71,852		69,823			58,885			272,683
Basic earnings per share		0.49		0.48		0.47			0.40			1.84
Diluted earnings per share		0.47		0.47		0.46			0.39			1.78

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13. New Accounting Pronouncements

In July 2002, the FASB issued SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized at its fair market value when the liability is incurred, rather than at the date of an entity’s commitment to an exit plan. The provisions of SFAS 146 are effective for exit or disposal activities that are initiated after December 31, 2002. The adoption of SFAS 146 is not expected to have a material effect on the Company’s financial statements.

In November 2002, the FASB issued FASB Interpretation No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34.” FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also requires that a guarantor recognize, at the inception of a guarantee, a liability for the fair value of certain guarantees. The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 are effective for financial statement periods ending after December 15, 2002.

Under its charter, the Company has agreed to indemnify any person who is made a party to any action or threatened with any action as a result of such person’s serving or having served as an officer or director of the Company or having served, at the Company’s request, as an officer or director of another company. The indemnification does not apply if the person is adjudicated not to have acted in good faith in the reasonable belief that his or her actions were in the best interests of the Company. The indemnification obligation survives termination of the indemnified party’s involvement with the Company but only as to those claims arising from such person’s role as an officer or director. The Company has separate indemnification agreements with certain of its officers and directors that mirror the charter provisions. The maximum potential amount of future payments that the Company could be required to make under the charter provision and the corresponding indemnification agreements is unlimited; however, the Company has Director and Officer insurance policies that, in most cases, would limit its exposure and enable it to recover a portion of any future amounts paid. As a result of the insurance policy coverage, the estimated fair value of these indemnification provisions is minimal. All of these indemnification provisions were grandfathered under the provisions of FIN 45 as they were in effect prior to December 31, 2002. Accordingly, we have no liabilities recorded for these provisions as of December 31, 2002.

The Company enters into indemnification provisions under its agreements with other companies in its ordinary course of business, typically with business partners, contractors, clinical sites and customers. Under these provisions the Company generally indemnifies and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2002.

In December 2002, the FASB issued SFAS 148, “Accounting for Stock-Based Compensation-Transition and Disclosure — An Amendment of FAS No. 123.” SFAS 148 amends SFAS 123, “Accounting for Stock-Based Compensation” to provide alternative methods of transition for those companies who voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS 123 to require prominent disclosures in both the annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition and annual disclosure provision of SFAS 148 are effective for fiscal years ending after December 15, 2002. The Company has not adopted the fair value method of accounting for stock-based compensation, and will continue to apply APB 25 for its stock-based compensation plans. The Company has incorporated the disclosure requirements of SFAS 148 at December 31, 2002, which require a tabular pro forma presentation of net income had SFAS 123 been adopted by the Company in the “Summary of Significant Accounting Policies” footnote of the financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51.” FIN 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved. Variable interest entities that effectively disperse risk will not be consolidated unless a single party holds an interest or combination of interests that effectively recombines risks that were previously dispersed. FIN 46 also requires enhanced disclosure requirements related to variable interest entities. FIN 46 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. The adoption of FIN 46 is not expected to have a material effect on the Company’s financial statements.

40

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, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America, 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 our opinion.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
February 14, 2003

41

Senior Executives and Board Members

Biogen, Inc. and Subsidiaries

Senior Biogen Executives	Board of Directors
James C. Mullen Chairman of the Board of Directors, President and Chief Executive Officer   Burt A. Adelman, M.D. Executive Vice President – Research and Development   Thomas J. Bucknum, Esq Executive Vice President – General Counsel and Clerk   Sylvie L. Gregoire, Pharm. D Executive Vice President – Technical Operations   Hans Peter Hasler Executive Vice President – Commercial Operations   Peter N. Kellogg Executive Vice President — Finance and Chief Financial Officer   Craig Schneier, Ph.D. Executive Vice President — Human Resources	James C. Mullen Chairman of the Board of Directors, President and Chief Executive Officer   Alan Belzer 1,3 President, Chief Operating Officer and Director, Allied-Signal, Inc. (retired)   Lawrence C. Best 1 Senior Vice President and Chief Financial Officer, Boston Scientific Corporation   Harold W. Buirkle 1,2 Managing Director, The Henley Group, Inc. (retired)   Mary L. Good, Ph.D. 2 Former Undersecretary for Technology, U.S Department of Commerce; Managing Member, Venture Capital Investors, LLC; Donaghey University Professor at University of Arkansas at Little Rock; Dean, Donaghey College of Information Science and System Engineering   Thomas F. Keller, Ph.D. 1 R. J. Reynolds Professor and Former Dean, Fuqua School of Business, Duke University   Roger H. Morley 2 Vice President, Schiller International University; Co-Managing Director, R&R Inventions Ltd.; Former President, American Express Co.   Sir Kenneth Murray, Ph.D. 3 Biogen Professor of Molecular Biology, Emeritus University of Edinburgh; Fellow of The Royal Society   Eckhard Pfeiffer 2 President and Chief Executive Officer, Compaq Corporation (retired)   Phillip A. Sharp, Ph.D. Institute Professor and Director of the McGovern Institute for Brain Research, Massachusetts Institute of Technology; Nobel Laureate   Alan K. Simpson 3 Former Director of the Institute of Politics and Former Visiting Lecturer, John F. Kennedy School of Government, Harvard University; Visiting Lecturer, University of Wyoming; Former U.S. Senator   James W. Stevens 1,3 Former Chairman, Prudential Asset Management Group
	1  Member of the Finance and Audit Committee
	2  Member of the Compensation and Management Development Committee
	3  Member of the Corporate Governance and Nominating Committee

42

Shareholder Information
Biogen, Inc. and Subsidiaries

Corporate Headquarters:
Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142
Telephone: (617) 679-2000
Fax: (617) 679-2617

Annual Meeting
Friday, June 6, 2003 at 10:00 am at the Company’s offices in 15 Cambridge Center, Cambridge, MA

All shareholders are welcome

Market for Securities
Biogen’s securities are quoted on the NASDAQ National Market System

Common stock symbol: BGEN

As of March 7, 2003 there were approximately 2,346 holders of record of the Company’s Common Stock. The Company has not paid any cash dividends on its Common Stock since its inception, and does not intend to pay any dividends in the foreseeable future.

The quarterly high and low closing prices of the Company’s Common Stock on the NASDAQ National Market System for 2002 and 2001 are as follows:

	High			Low
Fiscal 2002
First Quarter		57	42		49	06
Second Quarter		50	94		39	19
Third Quarter		38	95		29	08
Fourth Quarter		46	23		28	89
Fiscal 2001
First Quarter		74	50		51	31
Second Quarter		66	80		52	03
Third Quarter		61	99		49	45
Fourth Quarter		59	63		52	68

SEC Form 10-K
A copy of Biogen’s Annual Report on Form 10-K filed with the Securities and Exchange Commission is available upon written request to the:

Investor Relations Department
Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142.

Transfer Agent
For shareholder questions regarding lost certificates, address changes and changes of ownership or name in which the shares are held, direct inquiries to:

EquiServe
150 Royall Street
Canton, MA 02021
(877) 282-1168
www.equiserve.com

Independent Accountants
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109

News Releases
As a service to our shareholders and prospective investors, copies of Biogen news releases issued in the last 12 months are now available almost immediately 24 hours a day, seven days a week, on the Internet’s World Wide Web at http://www.prnewswire.com. Biogen news releases are usually posted within one hour of being issued and are available at no cost.

The Biogen logo, AVONEX® and AMEVIVE® are registered trademarks of Biogen, Inc. ANTEGREN® is a registered trademark of Elan Corporation. PEG-INTRON®, INTRON®A, REBETOL® and REBETRON® are registered trademarks of Schering-Plough Corporation. ANGIOMAX® is a registered trademark of The Medicines Company. BETASERON® is a registered trademark of Berlex Laboratories, Inc. BETAFERON® is a registered trademark of Schering AG, Germany. COPAXONE® is a registered trademark of Teva Neuroscience, Inc. REBIF® is a registered trademark of Serono S.A. NOVANTRONE® and ENBREL® are registered trademarks of Amgen, Inc. RAPTIVA® is a registered trademark of Genentech, Inc. REMICADE® is a registered trademark of Centocor, Inc., a subsidiary of Johnson & Johnson. HUMIRA® is a registered trademark of Abbott Laboratories, Inc.

MS ACTIVE SOURCE and PSORIASIS SUPPORT are service marks of Biogen, Inc

43

BIOGEN, INC.

Schedule II

Valuation and Qualifying Accounts and Reserves

Years Ended December 31, 2002, 2001 and 2000

(in thousands)

	Balance at						Balance at End
Description	Beginning of Period		Additions		Deductions		of Period
Allowance for Doubtful Accounts1
Year Ended December 31, 2002	$	2,082	$	302	$	464	$	1,920
Year Ended December 31, 2001	$	2,436	$	386	$	740	$	2,082
Year Ended December 31, 2000	$	1,642	$	794	$	—	$	2,436
Sales Returns & Allowances, Discounts and Rebates2
Year Ended December 31, 2002	$	14,279	$	113,138	$	112,280	$	15,137
Year Ended December 31, 2001	$	9,040	$	94,266	$	89,027	$	14,279
Year Ended December 31, 2000	$	8,654	$	58,666	$	58,280	$	9,040

1	Additions to allowance for doubtful accounts are recorded as an expense.
2	Additions to sales returns & allowances, discounts, and rebates are recorded as a reduction of revenue.

44

Report of Independent Accountants on

Financial Statement Schedule

To the Board of Directors and
Shareholders of Biogen, Inc.:

Our audits of the consolidated financial statements referred to in our report dated February 14, 2003 appearing in the 2002 Annual Report to Shareholders of Biogen, Inc. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
February 14, 2003

45 EX-21 15 b45838biexv21.txt EX 21 SUBSIDIARIES OF THE REGISTRANT EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT Biogen Canada, Inc. Delaware Bio Holding I, Inc. Delaware Bio Holding II, Inc. Delaware Biogen Realty Cooperation Massachusetts Biogen Realty Limited Partnership Massachusetts Biogen U.S. Corporation Massachusetts Biogen U.S. Limited Partnership Massachusetts Biogen (RTP) Realty LLC Delaware Biogen (Denmark) Manufacturing ApS Denmark Biogen Australia Pty Ltd Australia Biogen Belgium S.A./N.V. Belgium Biogen B.V. The Netherlands Biogen France S.A. France Biogen Farmaceutica SL Spain Biogen GmbH Austria Biogen GmbH Germany Biogen International B.V. The Netherlands Biogen Investments, Ltd. Bermuda Biogen Japan Ltd. Japan Biogen Limited United Kingdom Biotech Manufacturing CV The Netherlands Biotech Manufacturing Limited Channel Islands Biogen Norway AS Norway Biogen Sweden AB Sweden Biogen Denmark A/S Denmark Biogen Finland Oy Finland EX-23 16 b45838biexv23.txt EX 23 CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (Nos. 33-51639 and 333-71695) and in the Registration Statements on Form S-8 (Nos. 33-63013, 33-71647, 33-37312, 33-69174, 33-63015, 333-42887, 333-70701, 333-53598 and 333-81668) of Biogen, Inc. of our report dated February 14, 2003 relating to the financial statements, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated February 14, 2003 relating to the financial statement schedule, which appears in this Form 10-K. \s\ PricewaterhouseCoopers LLP Boston, Massachusetts March 14, 2003 -----END PRIVACY-ENHANCED MESSAGE-----

EX-3.1

                                                                     Exhibit 3.1


FORM CD-26-5M-8-83


                        The Commonwealth of Massachusetts
                 Office of the Massachusetts Secretary of State
                       MICHAEL JOSEPH CONNOLLY, SECRETARY
                    ONE ASHBURTON PLACE, BOSTON, MASS. 02108

                                                          FEDERAL IDENTIFICATION
                                                          NO. 04-3002117
                                                              ----------

                  CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
                            A SERIES OF A CLASS STOCK

                     General Laws, Chapter 156B, Section 26



                                    ---------



     We, James L. Vincent, President and Frederic A. Eustis, III,
Clerk of

                                   BIOGEN, INC.
- --------------------------------------------------------------------------------
                              (Name of Corporation)

located at 14 CAMBRIDGE CENTER, CAMBRIDGE, MASSACHUSETTS 02142 do hereby certify
that at a meeting of the directors of the corporation held on MAY 8, 1989 , the
following vote establishing and designating a series of a class of stock and
determine the relative rights and preferences thereof was duly adopted.

            (see Continuation Sheets 2A through 2LL attached hereto)


NOTE:  Votes for which the space provided above is not sufficient should be set
       out on continuation sheets to be numbered 2A, 2B, etc. Continuation
       sheets must have a left-hand margin 1 inch for binding and shall be
       8 1/2" x 11". Only one side should be used.





                              Continuation Sheet 2A
                              ---------------------


                                  Biogen, Inc.

                                ----------------

                           CERTIFICATE OF DESIGNATION
                                       OF
                               $2.125 CONVERTIBLE
                          EXCHANGEABLE PREFERRED STOCK

              (Pursuant to Section 26 of the Massachusetts Business
                                Corporation Law)

                                ----------------

     Biogen, Inc., a corporation organized and existing under the Business
Corporation Law of the Commonwealth of Massachusetts (hereinafter called the
"Corporation"), do hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 26 of the
Business Corporation Law (the "MBCL") at a meeting duly called and held on May
8, 1989:

     RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "Board of Directors" of
the "Board") in accordance with the provisions of the Articles of Organization,
the Board of Directors hereby creates a series of $2.125 Convertible
Exchangeable Preferred Stock, par value $.01 per shares, of the Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof (in addition to any provisions set
forth in the Articles of Organization of the Corporation which are applicable to
the preferred stock of all classes and series) as follows:




                              Continuation Sheet 2B
                              ---------------------

     $2.125 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK:

     Section 1. DESIGNATION AND AMOUNT. The Shares of such series shall be
designated as "$2.125 Convertible Exchangeable Preferred Stock" (the
"Exchangeable Preferred Stock") and the number of shares constituting the
Exchangeable Preferred Stock shall be 2,760,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; PROVIDED; that
no decrease shall reduce the number of shares of Exchangeable Preferred Stock to
a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding options, rights or warrants
or upon the conversion of any outstanding securities issued by the Corporation
convertible into Exchangeable Preferred Stock.

     Section 2. STATED CAPITAL. The amount to be represented in stated capital
at all times for each share of Exchangeable Stock shall be $.01.

     Section 3. RANK. All Exchangeable Preferred Stock shall rank prior to all
of the Corporation's Common Stock, par value $.01 per share (the "Common
Stock"), and Series A Junior Participating Preferred Stock, $.01 par value (the
"Series A Preferred Stock"), now or hereafter issued, both as to payment of
dividends and as to distributions of assets upon liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary.






                              Continuation Sheet 2B
                              ---------------------

     Section 4. DIVIDENDS AND DISTRIBUTIONS. The holders of shares of
Exchangeable Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for such
purpose, dividends at the rate of $2.125 per annum per share, and no more, which
shall be fully cumulative, shall accrue without interest from the date of
original issuance and shall be payable in cash quarterly on March 15, June 15,
September 15, and December 15 of each year commencing September 15, 1989 (except
that if such date is a Saturday, Sunday or legal holiday, then such dividend
shall be payable on the next day that is not a Saturday, Sunday or legal
holiday) to holders of record as they appear on the stock books of the
Corporation on such record dates, not more than 60 nor less than 10 day
preceding the payment dates for such dividends, as shall be fixed by the Board.
The amount of dividends payable per share of Exchangeable Preferred Stock for
each quarterly dividend period shall be computed by dividing the annual dividend
amount by four. The amount of dividends payable for the initial dividend period
and any period shorter than a full quarterly dividend period shall be computed
on the basis of a 360-day year of twelve 30-day months. No dividends or other
distributions, other than dividends payable solely in shares of Common Stock or
Series A Preferred Stock or other capital stock of the Corporation ranking
junior as to dividends to the Exchangeable Preferred Stock (collectively, the
"Junior





                              Continuation Sheet 2D
                              ---------------------

Dividend Stock"), shall be paid or set apart for payment on, and no purchase,
redemption or other acquisition shall be made by the Corporation of, any shares
of Junior Dividend Stock unless and until all accrued and unpaid dividends on
the Exchangeable Preferred Stock, including the full dividend for the
then-current quarterly dividend period, shall have been paid or declared and set
apart for payment.
     If at any time any dividend on any capital stock or the Corporation ranking
senior as to dividends to the Exchangeable Preferred Stock (the "Senior Dividend
Stock") shall be in default, in whole or in part, no dividend shall be paid or
declared and set apart for payment on the Exchangeable Preferred Stock unless
and until all accrued and unpaid dividends with respect to the Senior Dividend
Stock, including the full dividends for the then-current dividend period, shall
have been paid or declared and set apart for payment, without interest. No full
dividends shall be paid or declared and set apart for payment on any class or
series of the Corporation's capital stock ranking, as to dividends, on a parity
with the Exchangeable Preferred Stock (the "Parity Dividend Stock") for any
period unless full cumulative dividends have been, or contemporaneously are,
paid or declared and set apart for such payment on the Exchangeable Preferred
Stock for all dividend payment periods terminating on or prior to the date of
payment of such full cumulative dividends. No full dividends shall be





                              Continuation Sheet 2E
                              ---------------------

paid or declared and set apart for payment on the Exchangeable Preferred Stock
for any period unless full cumulative dividends have been, or contemporaneously
are, paid or declared and set apart for payment on the Parity Dividend Stock for
all dividend period terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full upon the Exchangeable
Preferred Stock and the Parity Dividend Stock, all dividends paid or declared
and set apart for payment upon shares of Exchangeable Preferred Stock and the
Parity Dividend Stock shall be paid or declared and set apart for payment pro
rata, so that the amount of dividends paid or declared and set apart for payment
per share on the Exchangeable Preferred Stock and the Parity Dividend Stock
shall in all cases bear to each other the same ratio that accrued and unpaid
dividends per share on the shares of Exchangeable Preferred Stock and the Parity
Dividend Stock bear to each other.
     Any reference to "distribution" contained in this Section 4 shall be deemed
to include any stock dividend or distributions made in connection with any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary.
     Section 5. LIQUIDATION PREFERENCE. In the event of a liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of Exchangeable





                              Continuation Sheet 2F
                              ---------------------

Preferred Stock shall be entitled to receive out of the assets of the
Corporation, whether such assets are stated capital or surplus of any nature, an
amount equal to the dividends accrued and unpaid thereon to the date of final
distribution to such holders, whether or not declared, without interest, and a
sum equal to $25 per share, and no more, before any payment shall be made or any
assets distributed to the holders of Common Stock, Series A Preferred Stock or
any other class or series of the Corporation's capital stock ranking junior as
to liquidation rights to the Exchangeable Preferred Stock (collectively, the
"Junior Liquidation Stock"); PROVIDED, HOWEVER, that such rights shall accrue to
the holders of Exchangeable Preferred Stock only in the event that the
Corporation's payments with respect to the liquidation preferences of the
holders of capital stock of the Corporation ranking senior as to liquidation
rights to the Exchangeable Preferred Stock (the "Senior Liquidation Stock") are
fully met. The entire assets of the Corporation available for distribution after
the liquidation preferences of the Senior Liquidation Stock are fully met shall
be distributed ratably among the holders of the Exchangeable Preferred Stock and
any other class or series of the Corporation's capital stock which may hereafter
be created having a parity as to liquidation rights with the Exchangeable
Preferred Stock in proportion to the respective preferential amounts to which
each is entitled (but





                              Continuation Sheet 2G
                              ---------------------

only to the extent of such preferential amounts). Neither a consolidation or
merger of the Corporation with another corporation nor a sale or transfer of all
or part of the Corporation's assets for cash securities or other property will
be considered a liquidation, dissolution or winding up of the Corporation.

     Section 6. REDEMPTION AT OPTION OF THE CORPORATION. The Corporation may not
redeem the Exchangeable Preferred Stock prior to June 15, 1991. The Corporation,
at its option, may after June 15, 1991, redeem at any time all, or from time to
time a portion, of the Exchangeable Preferred Stock on any date set by the Board
of Directors, if redeemed during the twelve-month period beginning June 15 of
the year specified below, at the following cash redemption prices per share:



                  Year                           Redemption Price
                  ----                           ----------------

                                                   
                  1991                                $26.7000
                  1992                                $26.4875
                  1993                                $26.2750
                  1994                                $26.0625
                  1995                                $25.8500
                  1996                                $25.6375
                  1994                                $25.4250
                  1998                                $25.2125



and thereafter at $25 per share, plus, in each case an amount in cash equal to
all dividends on the Exchangeable Preferred Stock accrued and unpaid thereon,
whether or not declared, pro rata to the date fixed for redemption, each sum
being hereinafter referred to as the "Redemption Price."





                              Continuation Sheet 2H
                              ---------------------

     In case of the redemption of less than all of the then outstanding
Exchangeable Preferred Stock, the Corporation shall designate by lot, or in such
other manner as the Board of Directors may determine, the shares to be redeemed,
or shall effect such redemption pro rata. Notwithstanding the foregoing, the
Corporation shall not redeem less than all of the Exchangeable Preferred Stock
at any time outstanding until all dividends accrued and in arrears upon all
Exchangeable Preferred Stock than outstanding shall have been paid for all past
dividend periods.
     Not more than 60 nor less than 30 days prior to the redemption date, notice
by first class mail, postage prepaid, shall be given to the holders of record of
the Exchangeable Preferred Stock to be redeemed, address to such stockholders at
their last addresses as shown on the books of the Corporation. Each such notice
of redemption shall specify the date fixed for redemption, the redemption price,
the place or places of payment, the then effective conversion price and that the
right of holders of shares of Exchangeable Preferred Stock being redeemed to
exercise their conversion right shall terminate as to such shares at the close
of business on the date fixed for redemption (PROVIDED that no default by the
Corporation in the payment of the Redemption Price shall have occurred and be
continuing), that payment will be made upon presentation and surrender of the
shares of Exchangeable





                              Continuation Sheet 2I
                              ---------------------

Preferred Stock, that accumulated but unpaid dividends to the date fixed for
redemption will be paid on the date fixed for redemption, and that on and after
the redemption date, dividends will cease to accumulate on such shares.
     Any notice which is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of the Exchangeable
Preferred Stock receives such notice; and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Exchangeable Preferred Stock. On or after the date fixed
for redemption as stated in such notice, each holder of the shares called for
redemption shall surrender the certificate (or certificates) evidencing such
shares to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the Redemption Price. If fewer than
all shares represented by any such surrendered certificate (or certificates) are
redeemed, a new certificate shall be issued representing the unredeemed shares.
If, on the date fixed for redemption, funds necessary for the redemption shall
be available therefor and shall have been irrevocably deposited or set aside,
then, notwithstanding that the certificates evidence any shares so called for
redemption shall not have been surrendered, the dividends with respect to the
shares so called shall cease to





                               Continuing Sheet 2J
                               -------------------

accrue after the date fixed for redemption, the shares shall no longer be deemed
outstanding, the holders thereof shall cease to be stockholders, and all rights
whatsoever with respect to the shares so called for redemption (except the right
of the holders to receive the Redemption Price without interest upon surrender
of their certificates therefor) shall terminate Shares of Exchangeable Preferred
Stock redeemed by the Corporation shall be restored to the status of authorized
but unissued shares of preferred stock of the Corporation shall be restored to
the status of authorized but unissued shares of preferred stock of the
Corporation, pursuant to Section 21A of the MBCL, without designation as to
series, and may thereafter be reissued, but not as shares of Exchangeable
Preferred Stock.
     Section 7. REDEMPTION AT OPTION OF HOLDERS. In the event that (i) any
person (with the defined meaning as used in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial
owner (as defined in Ruled 13d-3 under the Exchange Act) of more than 50% of the
Common Stock other than: (x) in a transaction or series of transactions in which
such person acquires at least 50% of the total securities beneficially owned by
such person in direct issuances from the Corporation or (y) by means of a merger
of the Corporation with or into a subsidiary or affiliate of such person (a
"Share Acquisition"), or (ii) the Corporation is a party to a business
combination, including a merger or consolidation or the sale of all or
substantially all





                              Continuation Sheet 2K
                              ---------------------

of its assets and as a result of such business combination, the Exchangeable
Preferred Stock thereafter is not convertible into common stock of the
Corporation or of the ultimate parent of the Corporation which common stock is
traded on the New York Stock Exchange, the American Stock Exchange or through
the NASDAQ National Market System, each holder of Exchangeable Preferred Stock,
subject to the conditions of this Section 7, shall have the option to require
the Corporation to redeem all, but not less than all, of the Exchangeable
Preferred Stock owned by such holder at $25 per share plus accrued and unpaid
dividends, whether or not declared, pro rata to the redemption date.
     In the event of any Share Acquisition, the Corporation shall, at the close
of business on the date which is 45 days after the date of such Share
Acquisition, upon the written demand of any record holder of Exchangeable
Preferred Stock who so requests, redeem all of the Exchangeable Preferred Stock
owned by such holder at $25 per share plus accrued and unpaid dividends to but
not including such 45th day. Within five days after the Corporation has
knowledge that such Share Acquisition has occurred, it shall mail to each record
holder of Exchangeable Preferred Stock a form of written demand to be used by
such holder to exercise his right of redemption (a "Demand Form") and a notice
which shall disclose the occurrence of the Share Acquisition and the right of
such holder to





                              Continuation Sheet 2L
                              ---------------------

require the Corporation to redeem such Exchangeable Preferred Stock pursuant to
this Section 7 and shall state the redemption date, the redemption price, the
place or places of payment, that payment will be made upon presentation and
surrender of the shares of Exchangeable Preferred Stock and the date by which
such holder must notify the Corporation if it elects to require the Corporation
to make such redemption. Within 15 days after the Corporation has knowledge that
a Share Acquisition has occurred, it also shall deposit in trust with The First
National Bank of Boston ("The Bank of Boston") or a bank having a combined
capital and surplus in excess of $50,000,000, as trustee, for the benefit of
holder of Exchangeable Preferred Stock which elect to require the Corporation to
redeem such stock pursuant to this Section 7, funds sufficient to redeem on the
redemption date of all of the Exchangeable Preferred Stock outstanding on the
date of delivery of the notice referred to above. Each record holder of
Exchangeable Preferred Stock which elects to require the Corporation to redeem
on the redemption date all of the Exchangeable Preferred Stock which such holder
owns shall deliver to eh Company not later than the redemption date a completed
Demand Form relating to the Exchangeable Preferred Stock to be redeemed. After
the redemption date, the Corporation shall be entitled to receive from the funds
which it deposited in trust for the redemption of Exchangeable Preferred Stock
on such redemption date an amount equal





                              Continuation Sheet 2M
                              ---------------------

to that portion of such funds which was deposited in respect of shares of
Exchangeable Preferred Stock which the holders thereof did not elect to have
redeemed pursuant to this Section 7. The term "redemption date," as used in
connection with a redemption resulting from a Share Acquisition shall mean the
close of business on the 45th day after the date of the Share Acquisition.
     In the event of any business combination described in the first paragraph
of this Section 7, the Corporation shall, immediately prior to the effectiveness
of such business combination, upon demand of any record holder of Exchangeable
Preferred Stock which so requests, redeem all of the Exchangeable Preferred
Stock owned by each such holder at $25 per share plus accrued and unpaid
dividends to the date on which such business combination occurs. Not later than
35 days prior to the effectiveness of any such business combination, the
Corporation shall mail to each record holder of Exchangeable Preferred Stock a
Demand Form and a notice which shall disclose such business combination and the
right of such holder of Exchangeable Preferred Stock pursuant to this Section 7
and shall state the anticipated redemption date, the redemption price, the place
of places that payment will be made upon presentation and surrender of the
shares of Exchangeable Preferred Stock and the date by which





                              Continuation Sheet 2N
                              ---------------------

such holder must notify the Corporation if its elects to require the Corporation
to make such redemption. Prior to the effectiveness of such business
combination, the Corporation also shall deposit in trust it The Bank of Boston
or a bank having a combined capital and surplus in excess of $50,000,00, as
trustee, for the benefit of holders of Exchangeable Preferred Stock which elect
to require the Corporation to redeem such stock pursuant to this Section 7,
immediately available funds sufficient to redeem on the redemption date all of
the Exchangeable Preferred Stock which, pursuant to this Section 7, holders have
elected to require the Corporation to redeem. Each record holder of Exchangeable
Preferred Stock which elects to require the Corporation to redeem on the
redemption date all of the Exchangeable Preferred Stock which it owns must
submit to the Corporation not later than the redemption date a completed Demand
Form relating to the Exchangeable Preferred Stock to be redeemed. The
Corporation agrees that it will not complete any business combination described
in this Section 7 unless proper provision has been made to satisfy its
obligations under this Section 7. The term "redemption date," as used in
connection with a redemption upon the occurrence of a business combination under
this Section 7, shall mean the time immediately prior to the effectiveness of
such business combination referred to therein.

     Any notice by the Corporation which is mailed as herein provided shall be
conclusively presumed to have been





                              Continuation Sheet 2O
                              ---------------------

duly given, whether or not the holder of Exchangeable Preferred Stock receives
such notice; and failure to give such notice by mail, or any defect in such
notice, to the holders of any shares shall not affect the validity of the
proceedings for the redemption of any other shares of Exchangeable Preferred
Stock. An election by a holder of Exchangeable Preferred Stock to have the
Corporation redeem such stock pursuant to this Section 7 shall become
irrevocable on the relevant redemption date. On or after the date fixed for
redemption as stated in any notice delivered by the Corporation, each holder of
the shares called for redemption shall surrender the certificates evidence such
shares to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the relevant redemption price in
accordance with the terms of this Section 7. If any such certificates shall be
so surrendered in connection with a redemption required to be made as a result
of any business combination described in the first paragraph of this Section 7
and for whatever reason such business combination shall cause such certificates
to be returned promptly to the respective holder thereof.
     If, on the date fixed for redemption under any provision of this Section 7,
funds necessary for the redemption shall be available therefor and shall have
been deposited in trust as required by this Section 7, then in the case of any





                              Continuation Sheet 2P
                              ---------------------

shares of Exchangeable Preferred Stock to be redeemed as a result of a Share
Acquisition, after the close of business on the redemption date and, in the case
of any shares of Exchangeable Preferred Stock to be redeemed as a result of a
business combination described in this first paragraph of this Section 7, after
the effectiveness of the business combination, notwithstanding that the
certificates evidencing any shares which the holders thereof had elected to have
redeemed shall not have been surrendered, the dividends with respect to such
shares shall cease to accrue, such shares shall no longer be deemed outstanding,
the holders thereof shall cease to be stockholders, and all rights whatsoever
with respect to such shares (except the right of the holders to receive the
relevant redemption price without interest upon surrender of this certificates
therefor) shall terminate. Shares of Exchangeable Preferred Stock redeemed by
the Corporation shall be restored to the status of authorized but unissued
shares of preferred stock of the Corporation, pursuant to Section 21A of the
MBCL, without designation as to series, and may thereafter be reissued, but not
as shares of Exchangeable Preferred Stock.
     Section 8. NO SINKING FUND. The shares of Exchangeable Preferred Stock
shall not be subject to the operation of a purchase, retirement or sinking fund.
     Section 9. CONVERSION. The holders of the Exchangeable Preferred Stock may,
upon surrender of the





                              Continuation Sheet 2Q
                              ---------------------

certificates therefor, convent any or all of their shares of Exchangeable
Preferred Stock into fully paid and nonassessable shares of Common Stock and
such other securities and property as hereafter provided at any time after
issuance thereof, but not later than (i) the close of business on the date, if
any, fixed for redemption thereof in any notice of redemption given pursuant to
the provisions of Section 6 hereof if there is no default in payment of the
Redemption Price, (ii) in the case of Exchangeable Preferred Stock which the
holder thereof has elected to require the Corporation to redeem in the event of
a Share Acquisition pursuant to Section 7 hereof, the closet of business on the
date fixed for the redemption thereof in any notice of redemption given pursuant
to the provisions of Section 7 hereof and, in the case of a redemption to be
made as a result of a business combination described in the first paragraph of
Section 7 hereof, immediately prior to the effectiveness of such business
combination, in either case if there is no default in payment of the relevant
redemption price or (iii) the close of business on the date, if any, as may have
been fixed for the exchange thereof in any notice of exchange given pursuant to
the provisions of Section 11 hereof if any amount equal to all accrued and
unpaid dividends to the date of exchange shall have been paid or declared and
set apart for payment and the Debentures, as defined in Section 11, are legally
and validly issuable upon surrender of shares of





                              Continuation Sheet 2R
                              ---------------------

Exchangeable Preferred Stock. Each share of Exchangeable Preferred Stock shall
be convertible at the office of any transfer agent for the Exchangeable
Preferred Stock, and at such other office or offices, if any, as the Board of
Directors may designate, into that number of fully paid and nonassessable shares
of Common Stock (calculated as to each conversion to the nearest 1/100th of a
share) as shall be equal to the Conversion Rate, determined as hereinafter
provided, in effect at the time of conversion. Shares of Exchangeable Preferred
Stock may initially be converted into full shares of Common Stock at the rate of
1,6393 shares of Common Stock for each share of Exchangeable Preferred Stock,
subject to adjustment as hereinafter provided (the "Conversion Rate"). The
"Conversion Price" shall be made in respect of cash dividends on Common Stock or
Exchangeable Preferred Stock that may be accrued and unpaid at the date of
surrender for conversion. Notwithstanding anything in this Section 9 to the
contrary, no change in the Conversion Rate shall actually be made until the
cumulative effect of the adjustments called for by this Section 9 since the date
of the last change in the Conversion Rate would change the Conversion Rate by
more than 1%. However, once the cumulative effect would result in a change, then
the Conversion Rate shall actually be changed to reflect all adjustments called
for by his Section 9 and not previously





                              Continuation Sheet 2S
                              ---------------------

made. Notwithstanding anything in this Section 9, no change in the Conversion
Rate shall be made which would result in a Conversion Price of less than the par
value of the Common Stock into which shares of Exchangeable Preferred Stock are
at the time convertible.
     Each share of Common Stock issued upon conversion of the Exchangeable
Preferred Stock will be accompanied by one Right to Purchase Series A Preferred
Stock (the "Right") which shall entitle the registered holder of the related
share of Common Stock to the privileges relating to such Right as specified in
the Rights Agreement, dated as of May 8, 1989, between the Corporation and The
First National Bank of Boston, unless such conversion occur after May 8, 1999 or
the Rights are redeemed by the Corporation prior to such conversion.
     The right of the holders of Exchangeable Preferred Stock to convert their
shares shall be exercised by surrendering for such purpose to the Corporation or
its agent, as provided above, certificates representing shares to be converted,
duly endorsed in blank or accompanied by proper instruments or transfer. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery upon conversion of
shares of Common Stock or other securities or property in a name other than that
of the holder of the shares of the Exchangeable Preferred Stock being converted
and the





                              Continuation Sheet 2T
                              ---------------------

Corporation shall not be required to issue or deliver any such shares or other
securities or property unless and until the person or persons requesting the
issuance thereof shall have paid to the Corporation the amount of any such tax
or shall have established to the satisfaction of the Corporation that such tax
has been paid.
     A number of shares of the authorized but unissued Common Stock sufficient
to provide for the conversion of the Exchangeable Preferred Stock outstanding
upon the basis hereinbefore provided shall at all times be reserved by the
Corporation, free from preemptive rights, for such conversion, subject to the
provisions of the next succeeding paragraph. If the Corporation shall issue any
securities or make any change in its capital structure which would change the
number of shares of Common Stock into which each share of the Exchangeable
Preferred Stock shall be convertible as herein provided, the Corporation shall
at the same time also make proper provision so that thereafter there shall be a
sufficient number of shares of Common Stock authorized and reserved, free from
preemptive rights, for conversion of the outstanding Exchangeable Preferred
Stock on the new basis.
     In case of any consolidation or merger of the Corporation with any other
corporation (other than a wholly owned subsidiary of the Corporation), or in
case of any sale or transfer of all or substantially all of the assets of the





                              Continuation Sheet 2U
                              ---------------------

Corporation, or in the case of any share exchange pursuant to which all of the
outstanding shares of Common Stock are converted into other securities or
property, the Corporation shall make appropriate provision or cause appropriate
provision to be made so that holders of each share of Exchangeable Preferred
Stock then outstanding shall have the right thereafter to convert such share of
Exchangeable Preferred Stock into the kind and amount of shares of stock and
other securities and property receivable upon such consolidation, merger, sale,
transfer or share exchange by a holder of the number of shares of Common Stock
into which such shares of Exchangeable Preferred Stock might have been converted
immediately prior to that effective date of such consolidation, merger, sale,
transfer or share exchange. If in connection with any such consolidation,
merger, sale, transfer or share exchange, each holder of shares of Common Stock
is entitled to elect to receive either securities, case or other assets upon
completion of such transaction, the Corporation shall provide or cause to be
provided to each holder of Exchangeable Preferred Stock the right to elect the
securities, cash or other assets into which the Exchangeable Preferred Stock
held by such holder shall be convertible after completion of any such
transaction on the same terms and subject to the same conditions applicable to
holders of the Common Stock (including, without limitation, notice of the right
to elect,





                              Continuation Sheet 2V
                              ---------------------

limitations on the period in which such election shall be made and the effect of
failing to exercise the election). The Corporation shall not effect any such
transaction unless the provisions of this paragraph have been compiled with. The
above provisions shall similarly apply to successive consolidations, mergers,
sales, transfers or share exchanges.
     Upon the surrender of certificates representing shares of Exchangeable
Preferred Stock, the person converting shall be deemed to be the holder or
record of the Common Stock issuable upon such conversion and all rights with
respect to the shares surrendered shall forthwith terminate except the right to
receive the Common Stock or other securities, cash or other assets as herein
provided.
     No fractional shares of Common Stock shall be issued upon conversion of
Exchangeable Preferred Stock but, in lieu of any fraction of a share of Common
Stock which would otherwise be issuable in respect to the aggregate number of
such shares surrendered for conversion at one time by the same holder, the
Corporation shall pay in cash an amount equal to the product of (i) the Closing
Price of a share of Common Stock on the last trading day before the conversion
date and (ii) such fraction of a share.
     The "Closing Price" for each day shall be the last reported sales price
regular way or, in case no sale takes place on such day, the average of the
closing bid and asked





                              Continuation Sheet 2W
                              ---------------------

prices regular way on such day, in either case as reported on the New York Stock
Exchange Composite Tape, or, if the Common Stock is not listed or admitted to
trading on such Exchange, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or, if not listed or admitted
to trading on any national securities exchange, on the NASDAQ National Market
System, or, if not admitted for quotation on the NASDAQ National Market System,
the average of the high bid and low asked prices on such day as recorded by the
National Association of Securities Dealers, Inc. through NASDAQ shall not have
reported any hid and asked prices for the Common Stock on such day, the average
of the bid and asked prices for such day as furnished by any New York Stock
Exchange member firm selected from time to time by the Corporation for such
purpose, or if no such bid and asked prices can be obtained from any such firm,
the fair market value of one share of Common Stock on such day as determined in
good faith by the Board of Directors of the Corporation.

     The Conversion Rate shall be adjusted from time to time under certain
circumstances, subject to the provisions of the last three sentences of the
first paragraph of this Section 9 as follows:

     (1) In case the Corporation shall (w) pay a dividend or make a distribution
on its Common Stock in shares of its





                              Continuation Sheet 2X
                              ---------------------

capital stock, (x) subdivide its outstanding Common Stock into a greater number
of shares, (y) combine the shares of its outstanding Common Stock into a smaller
number of shares, or (z) issue by reclassification of its Common Stock any
shares of its capital stock, then in each such case the Conversion Rate in
effect immediately prior thereto shall be proportionately adjusted so that the
holder of any Exchangeable Preferred Stock thereafter surrendered for conversion
shall be entitled to receive, to the extent permitted by applicable law, the
number and kind of shares of capital stock of the Corporation which it would
have owned or have been entitled to receive after the happening of such event
had such Exchangeable Preferred Stock been converted immediately prior to the
record date (or if no record date has been established in connection with such
event, the effective date for such action). An adjustment pursuant to this
subparagraph (1) shall become effective immediately after the record date in the
case of a stock dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification.
     (2) In the case the Corporation shall issue rights or warrants to all
holders of the Common Stock entitling such holders to subscribe for or purchase
Common Stock on the record date referred to below at a price per share less





                              Continuation Sheet 2Y
                              ---------------------

than the average daily Closing Price of the Common Stock for the 30 consecutive
business days commencing 45 business days before the record date (the "Current
Market Price"), then in each such case the Conversion Rate in effect on such
record date shall be adjusted in accordance with the formula

                                        O + N
                        C' = C x ---------------
                                    O + N x P
                                        -----
                                          M

where
            

         C'       =        the adjusted Conversion Rate.

         C        =        the current Conversion Rate.

         O        =        the number of shares of Common Stock
                           outstanding on the record date.

         N        =        the number of additional shares of Common
                           Stock offered.

         P        =        the offering price per share of the
                           additional shares.

         M        =        the Current Market Price per share of Common Stock
                           on the record date.

         


Such adjustment shall become effective immediately after the record ate for the
determination of stockholders entitled to receive such rights or warrants. If
any or all of such rights or warrants are not so issued or expire or terminate
before being exercised, the Conversion Rate then in effect shall appropriately
readjusted.
     (3) In the case the Corporation shall, by dividend or otherwise, distribute
to all holders of its Junior Stock





                              Continuation Sheet 2Z
                              ---------------------

(as hereinafter defined) evidence of its indebtedness or assets (including
securities, but excluding any warrants or subscription rights referred to in
subparagraph (2) above, any dividend or distribution paid in cash out of the
retained earnings of the Corporation and any dividend or distribution referred
to in subparagraph (1) above), then in each such case the Conversion Rate then
in effect shall be adjusted in accordance with the formula

                                        M
                        C' = C x ---------------
                                      M - F


where
            

         C'       =        the adjusted Conversion Rate.

         C        =        the current Conversion Rate.

         M        =        the Current Market Price per share of Common Stock
                           on the record date mentioned below.

         F        =        the amount of such cash dividend and/or the fair
                           market value on the record date of the assets,
                           securities, rights or warrants to be distributed
                           divided by the number of shares of Common Stock
                           outstanding on the record date. The Board of
                           Directors of the Corporation shall determine the fair
                           market value.

         


Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution.
For purposes of this subparagraph (3), "Junior Stock" shall include any class of
capital stock ranking junior or PARI PASSU as to dividends or upon liquidation
to the Exchangeable Preferred Stock.





                             Continuation Sheet 2AA
                             ----------------------

     (4) All calculations hereunder shall be made to the nearest cent or to the
nearest 1/100 of a share, as the case may be.
     (5) In the event that at any time, as a result of an adjustment made
pursuant to subparagraph (1) of this Section 9, the holder of any Exchangeable
Preferred Stock thereafter surrendered for conversion shall become entitled to
receive securities, cash or assets other than common Stock, the number or amount
of such securities or property so receivable upon conversion shall be subject of
adjustment form time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
subparagraphs (1) to (4), inclusive, above.
     Except as otherwise provided above in this Section 9 above, no adjustment
in the Conversion Rate shall be made in respect of any conversion for share
distributions or dividends theretofore declared and paid or payable on the
Common Stock.
     Whenever the Conversion Rate is adjusted as herein provided, the
Corporation shall send to each transfer agent for the Exchangeable Preferred
Stock, and to the principal securities exchange, if any, on which the
Exchangeable Preferred Stock is traded, a statement signed by the Chairman of
the Board, the President or any Vice President of the Corporation and by its
Treasurer or its Clerk stating the adjusted Conversion Rate determined as
provided in this Section





                             Continuation Sheet 2BB
                             ----------------------

9 and any adjustment so evidenced, given in good faith, shall be binding upon
all stockholders and upon the Corporation. Whenever the Conversion Rate is
adjusted the Corporation will give notice by mail stating the adjustment and the
Conversion Rate at the time of, and together with, the next dividend payment to
the holders of record of Exchangeable Preferred Stock. Notwithstanding the
foregoing notice provisions, failure by the Corporation to give such notice or a
defect in such notice shall not affect the binding nature of such corporate
action of the Corporation.
     Whenever the Corporation shall propose to take any of the actions specified
in the fifth paragraph or in subparagraphs (1), (2), (3) of the ninth paragraph
of this Section 9 which would result in any adjustment in the Conversion Rate
under this Section 9, the Corporation shall cause a notice to be mailed at least
15 days prior to the date on which the books of the Corporation will close or on
which a record will be taken for such action, to the holders of record of the
outstanding Exchangeable Preferred Stock on the date of such notice. Such notice
shall specify the action proposed to be taken by the Corporation and the date as
of which holders of record of the Common Stock shall participate in any such
actions or be entitled to exchange their Common Stock for securities or other
property, as the case may be. Failure by





                             Continuation Sheet 2CC
                             ----------------------

the Corporation to mail the notice or defect in it shall not affect the
validity of the transaction.
     Notwithstanding any other provision of this Section 9, no adjustment in the
Conversion Rate need to be made (1) for a transaction referred to in
subparagraphs (1), (2) or (3) of the ninth paragraph of this Section 9 if
holders or Exchangeable Preferred Stock are to participate in the transaction on
a basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
or, in the case of a transaction referred to in said subparagraph (3), holders
of Junior Stock participate in the transaction; (ii) for sales of Common Stock
pursuant to a plan for reinvestment of dividends and interest or pursuant to any
plan adopted by the Corporation for the benefit of its employees or consultants;
(iii) for a change in par value of the Common Stock; or (iv) after the
Exchangeable Preferred Stock becomes convertible into cash (no interest shall
accrue on the cash).
     Section 10. VOTING RIGHTS. The holders of Exchangeable Preferred Stock will
not have any voting rights except as set forth below or as otherwise from time
to time required by law. Whenever dividends on the Exchangeable Preferred Stock
or any other class or series of Parity Dividend Stock shall be in arrears in an
equal to at least six quarterly dividends (whether or not consecutive) the
holders of





                             Continuation Sheet 2DD
                             ----------------------

the Exchangeable Preferred Stock (voting separately as a class with all other
affected classes or series of the Parity Dividend Stock upon which like voting
rights have been conferred and are exercisable will be entitled to vote for and
elect two additional directors. Such right of the holders of Exchangeable
Preferred Stock to vote for the election of such two directors may be exercised
at any annual meeting or at any special meeting called for such purpose as
hereinafter provided or at any adjournment thereof, until dividends in default
on such outstanding shares of Exchangeable Preferred Stock shall have been paid
in full (or such dividends shall have been declared and funds sufficient
therefor set apart for payment), at which time the term of office of the two
directors so elected shall terminate automatically (subject to revesting in the
event of each and every subsequent default of the character specified in the
preceding sentence). So long as such right to vote continues, the Clerk of the
Corporation may call, and upon the written request of the holders of record of
10% of the outstanding shares of Exchangeable Preferred Stock addressed to him
at the principal office of the Corporation shall call, a special meeting of the
holders of such shares for the election of such two directors, as provided
herein. Such meeting shall be held not less than 45 nor more than 90 days after
the accrual of such right, at the place and upon the notice provided by law and
in the By-laws of the Corporation for the holding of meetings of stockholders.
No such special meeting





                             Continuation Sheet 2EE
                             ----------------------

or adjournment thereof shall be held on a date less than 30 days before an
annual meeting of stockholders or any special meeting in lieu thereof, PROVIDED
that at such annual meeting appropriate provisions are made to allow the holders
of the Exchangeable Preferred Stock to exercise such right at such meeting. If
at any such annual or special meeting or any adjournment thereof the holders of
a majority of the then outstanding shares of Exchangeable Preferred Stock
entitled to vote in such election shall be present or represented by proxy, then
the authorized number of directors of the Corporation shall be increased by two,
and the holders of Exchangeable Preferred Stock shall be entitled to elect such
two additional directors. Directors so elected shall serve until the next annual
meeting or until their successors shall be elected and shall qualify, unless the
term of office of the persons so elected as directors shall have terminated by
virtue of the payment in full of all dividends in arrears (or such dividends
shall have been declared and funds sufficient therefor set apart for payment.)
In case of any vacancy occurring among the directors so elected by the holders
of Exchangeable Preferred Stock, the remaining director who shall have been so
elected may appoint a successor to hold office for the unexpired term of the
director whose place shall be vacant, and such successor shall be deemed to have
been elected by the holders of Exchangeable Preferred Stock. If both directors
so elected by the holders of Exchangeable Preferred Stock shall cease to





                             Continuation Sheet 2FF
                             ----------------------

serve as directors before their terms shall expire, the holders of Exchangeable
Preferred Stock then outstanding and entitled to vote for such directors may, at
a special meeting of such holders called as provided above, elect successors to
hold office for the unexpired terms of the directors whose places shall be
vacant.
     Without the consent or affirmative vote of the holders of at least a
majority of the outstanding shares of Exchangeable Preferred Stock, voting
separately as a class, the Corporation shall not authorize, create or issue any
shares of any other class or series of capital stock ranking senior to the
Exchangeable Preferred Stock as to dividends or upon liquidation. The
affirmative vote or consent of the holders of at least a majority of the
outstanding shares of the Exchangeable Preferred Stock voting separately as a
class, will be required for any amendment, alternative or repeal, whether by
merger or consolidation or otherwise, of the Corporation's Articles of
Organization if the amendment, alternative or repeal adversely affects the
powers, preferences or special rights of the Exchangeable Preferred Stock. To
the extent that under Massachusetts law the vote of the holders of the
Exchangeable Preferred Stock, voting separately as a class, may be required to
authorize a given action of the Corporation, including, but not limited to, an
action pursuant to Section 78 of the Massachusetts Business Corporation Law, the
affirmative vote or consent of the holders of at least a majority of the
outstanding shares of the





                             Continuation Sheet 2GG
                             ----------------------

Exchangeable Preferred Stock shall constitute the approval of such action by the
class.
     Section 11. EXCHANGE. The Exchangeable Preferred Stock is exchangeable at
the option only of the Corporation in whole, but not in part, on any dividend
payment date beginning June 15, 1991 for the Corporation's 8 1/2% Convertible
Subordinated Debentures Due 2014 (the "Debentures"), PROVIDED that prior to the
dividend payment date on which the Exchangeable Preferred Stock is to be
exchanged for the Debentures, the Corporation shall have delivered to the
Trustee under the Indenture between the Corporation and the Bank of Boston, as
Trustee, relating to the Debentures (the "Indenture"), an Option of Counsel (as
such term is defined in the Indenture), dated the dividend payment date,
substantially to the following effect, with such changes therein as such Trustee
shall approve:
          As of the date of such opinion, (1) the Corporation has duly
     authorized the exercise of its right to redeem the Exchangeable Preferred
     Stock in exchange for th Debentures and has exercised such option; (2) the
     Corporation has full corporate power and authority to enter into the
     Indenture and to perform its obligations under the Indenture and to issue
     and deliver the Debentures; (3) the Indenture has been duly authorized,
     execute and delivered and, assuming the due authorization, execution and
     delivery of the Indenture by the Trustee, is a valid and binding obligation
     of the Corporation enforceable against the Corporation in accordance with
     its terms, except as such enforceability may be limited by bankruptcy,
     insolvency, reorganization, moratorium and other laws relating to or
     affecting creditors' rights generally and by general equitable principles;
     (4) no consent or approval of any governmental authority or other person or
     entity is required in





                             Continuation Sheet 2HH
                             ----------------------


     connection with the issuance of the Debentures (other than qualification or
     registration of the Debentures or the offer or sale thereof under the
     securities or Blue Sky laws of the various jurisdictions in which the
     Debentures would be offered, as to which no opinion need be expressed); (5)
     the Debentures will be, when issued in accordance with the terms of the
     Indenture, validity issued and outstanding obligations of the Corporation
     in accordance with their terms, except as such enforceability may be
     limited by bankruptcy, insolvency, reorganization, moratorium and other
     laws relating to or affecting creditors' rights generally and by general
     equitable principles; and (6) the issuance of the Debentures and the
     performance by the Corporation of its obligations under the Indenture will
     not be in conflict with or constitute a breach of or a default (with the
     passage of time or otherwise) under (w) the Articles of Organization or
     By-Laws of the Corporation in effect at the date of such opinion, (x) the
     certificate of incorporation or by-laws of any subsidiary of the
     Corporation (which conflict, breach or default is material to the
     Corporation and its subsidiaries taken as a whole) in effect at the date of
     such opinion, (y) any agreement or instrument (which is, individually or in
     the aggregate, material to the Corporation and its subsidiaries taken as a
     whole) to which the Corporation or any of its subsidiaries is a party or by
     which it or any of its subsidiaries is bound, or (z) any statute, law or
     regulation in effect at the date of such opinion to which the Corporation
     or any of its subsidiaries or any of their respective properties is subject
     or any judgment, decree or order, known to such counsel, if any court of
     governmental agency or authority presently in effect and applicable to the
     Corporation or any of its subsidiaries (which conflict, breach or default
     is, in the case of this clause (z), individually or in the aggregate,
     material to the Corporation and its subsidiaries taken as a whole.

Holders of the outstanding shares of Exchangeable Preferred Stock will be
entitled to receive $25 principal amount of the Debentures in exchange for each
share of Exchangeable Preferred Stock held by them at the time of exchange plus
an amount in cash equal to all dividends on the Exchangeable Preferred Stock
accrued and unpaid to the date of such exchange. At such time,





                             Continuation Sheet 2II
                             ----------------------

the rights of the holders of Exchangeable Preferred Stock as stockholders of the
Corporation shall cease (except the right to receive on the date of exchange an
amount equal to the amount of accrued and unpaid dividends on the Exchangeable
Preferred Stock to the date of exchange and the Debentures), and the person or
persons entitled to receive the Debentures issuable upon such redemption and
exchange shall be treated for all purposes as the registered holder or holders
of such Debentures. The Debentures will be issued under and shall have the terms
and benefits provided in the Indenture. The Corporation will mail to each record
holder of the Exchangeable Preferred Stock written notice of its intention to
exchange the Exchangeable Preferred Stock not less than 15 nor more than 60 days
prior to the exchange date. Such notice shall state; (i) the exchange date; (ii)
the place or places where certificates for such shares are be surrendered for
exchange for Debentures; and (iii) that dividends on the shares to be exchanged
will cease to accrue on such exchange date. Upon surrender in accordance with
said notice of the certificates for any shares so exchanged (properly endorsed
or assigned for transfer, if the Board of Directors shall so require and the
notice shall so state), the Corporation will cause the Debentures to be
authenticated and issued in exchange for such shares of Exchangeable Preferred
Stock to be mailed to the holder of the shares of Exchangeable Preferred Stock
at such





                             Continuation Sheet 2JJ
                             ----------------------

holder's address of record or such other address as the holder shall specify
upon such surrender of such certificates. All shares of Exchangeable Preferred
Stock which shall at any time have been exchanged shall, after such exchange, be
restored to the status of authorized but unissued shares of preferred stock of
the Corporation, pursuant to Section 21A of the MBCL, without designation as to
series, and may thereafter by reissued, but not as shares of Exchangeable
Preferred Stock. If on the exchange date the Corporation shall be in default in
the payment of any dividends (including cumulative dividends, if applicable) on
the Exchangeable Preferred Stock or on any shares of Senior Dividend Stock or
Parity Dividend Stock, or if such exchange shall on such date be prohibited by
applicable law, then no shares of the Exchangeable Preferred Stock shall be
exchanged.
     Section 12. OUTSTANDING SHARES. For purposes of this Certificate of
Designation, all shares of Exchangeable Preferred Stock shall be deemed
outstanding except (i) from the date fixed for redemption pursuant to Section 6
or 7 hereof, all shares of Exchangeable Preferred Stock which have been so
called for redemption under Section 6 or have been required to be redeemed by
the holder thereof under Section 7, if funds necessary for the redemption for
the of such shares are available, and in the case of a redemption under Section
7, have been deposited in trust with The Bank of Boston or a bank having a





                             Continuation Sheet 2KK
                             ----------------------

combined capital and surplus in excess of $50,000,000, as trustee, for the
benefit of the holders of such shares to be redeemed for payment of the relevant
redemption price; (ii) from the date of exchange determined pursuant to Section
11 hereof, all shares of Exchangeable Preferred Stock so called for exchange for
Debentures if any amount equal to all accrued and unpaid dividends on such
shares has been set apart for payment and the Debentures are issuable upon
surrender of such shares; (iii) from the date of surrender of certificates
representing shares of Exchangeable Preferred Stock, all shares of Exchangeable
Preferred Stock, converted into Common Stock; and (iv) from the date of
registration of transfer, all shares of Exchangeable Preferred Stock held of
record by the Corporation or any subsidiary of the Corporation.
     Section 13. PARTIAL PAYMENTS. If at any time the Corporation does not pay
amounts sufficient to redeem all Exchangeable Preferred Stock required to be
redeemed by the Corporation at such time pursuant to Section 6 or 7 or hereof,
then such funds which are paid shall be applied to redeem such Exchangeable
Preferred Stock as the Corporation may designate by lot.
     Section 14. RIGHT OF ACTION. Notwithstanding any other provision of this
Certificate of Designation, if the Corporation shall default in the payment of
any amount required to be paid by it in respect of the Exchangeable Preferred





                             Continuation Sheet 2LL
                             ----------------------

Stock, each holder of Exchangeable Preferred Stock, individually, shall have a
right to bring an action for payment.
     IN WITNESS WHEREOF, Biogen, Inc. has caused its corporate seal to be
hereunto affixed and this certificate to be signed by James L. Vincent, its
President, and attested by Frederic A. Eustis III, its Clerk, this 20th day of
June, 1989.

                                              BIOGEN, INC.


                                              By s/s  James L. Vincent
                                                     -----------------
                                                         President



Attest:

By s/s Frederic A. Eustis, III
       -----------------------
         Clerk






                        THE COMMONWEALTH OF MASSACHUSETTS
                 OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
                       MICHAEL JOSEPH CONNOLLY, Secretary
                      ONE ASHBURTON PLACE, BOSTON, MA 02108

                                                          FEDERAL IDENTIFICATION
                                                          NO. 04-3002117

                  CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
                          A SERIES OF A CLASS OF STOCK

                     General Laws, Chapter 156B, Section 26




                                      ----

We, Frederic A. Eustis, III                          Vice President, and
Sarah P. Cecil                                       Assistant Clerk of

                                  Biogen, Inc.

located at 14 Cambridge Center, Cambridge, MA 02142 do hereby certify that at a
meeting of the directors of the corporation held on May 8, 1989, the following
vote establishing and designating a series of a class of stock and determining
the relative rights and preferences thereof was duly adopted:

See attached Pages 2A-2G



Note:  Votes for which the space provided above is not sufficient should be set
       out on continuation sheets to be numbered 2A, 2B, etc. Continuation
       sheets must have a lefthand margin 1 inch wide for binding and shall be
       8 1/2 x 11". Only one side should be used.





                           CERTIFICATE OF DESIGNATION
                                       of
                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                                  BIOGEN, INC.

                         (Pursuant to Section 26 of the
                     Massachusetts Business Corporation Law)

                         ------------------------------

     Biogen, Inc., a corporation organized and existing under the Business
Corporation Law of The Commonwealth of Massachusetts (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 26 of the
Business Corporation Law at a meeting duly called and held on May 8, 1989:

     RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the Board of Directors" or
the "Board") in accordance with the provisions of the Articles of Organization,
the Board of Directors hereby creates a series of Preferred Stock, $.01 par
value (the "Preferred Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights, preferences,
and limitations thereof (in addition to any provisions set forth in the Articles
of Organization of the Corporation which are applicable to the Preferred Stock
of all classes and series) as follows:

     Series A Junior Participating Preferred Stock:

     Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 400,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; PROVIDED, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

     Section 2. Dividends and Distributions.
                ---------------------------

          (A) Subject to the rights of the holders of any shares of any series
          of Preferred Stock (or any similar stock) ranking prior and superior
          to the Series A Preferred Stock with respect to dividends, the holders
          of shares of Series A Preferred Stock, in preference to the




          holders of Common Stock, $.01 par value (the "Common Stock"), of the
          Corporation, and of any other junior stock, shall be entitled to
          receive, when, as and if declared by the Board of Directors out of
          funds legally available for the purpose, quarterly dividends payable
          in cash on the first day of March, June, September and December in
          each year each such date being referred to herein as a "Quarterly
          Dividend Payment Date"), commencing on the first Quarterly Dividend
          Payment Date after the first issuance of a share or fraction of share
          of Series A Preferred Stock, in an amount per share (rounded to the
          nearest cent) equal to the greater of (a) $1 or (b) subject to the
          provision for adjustment hereinafter set forth, 100 times the
          aggregate per share amount of all cash dividends, and 100 times the
          aggregate per share amount (payable in kind) of all non-cash dividends
          or other distributions, other than a dividend payable in shares of
          Common Stock or a subdivision of the outstanding shares of Common
          Stock (by reclassification or otherwise), declared on the Common Stock
          since the immediately preceding Quarterly Dividend Payment Date or,
          with respect to the first Quarterly Dividend Payment Date, since the
          first issuance of any share or fraction of a share of Series A
          Preferred Stock. In the event the Corporation shall at any time
          declare or pay any dividend on the Common Stock payable in shares of
          Common Stock, or effect a subdivision or combination or consolidation
          of the outstanding shares of Common Stock (by reclassification or
          otherwise than by payment of a dividend in shares of Common Stock)
          into a greater or lesser number of shares of Common Stock, then in
          each such case the amount to which holders of shares of Series A
          Preferred Stock were entitled immediately prior to such event under
          clause (b) of the preceding sentence shall be adjusted by multiplying
          such amount by a fraction, the numerator of which is the number of
          shares of Common Stock outstanding immediately after such event and
          the denominator of which is the number of shares of Common Stock that
          were outstanding immediately prior to such event.

          (B) The Corporation shall declare a dividend or distribution on the
          Series A Preferred Stock as provided in paragraph (A) of this Section
          immediately after it declares a dividend or distribution on the Common
          Stock (other than a dividend payable in shares of Common Stock);
          provided that, in the event no dividend or distribution shall have
          been declared on the Common Stock during the period between any
          Quarterly Dividend Payment Date and the next subsequent Quarterly
          Dividend Payment Date, a dividend of $1 per share on the Series A
          Preferred Stock shall



          nevertheless be payable on such subsequent Quarterly Dividend Payment
          Date.

               (C) Dividends shall begin to accrue and be cumulative on
          outstanding shares of Series A Preferred Stock from the Quarterly
          Dividend Payment Date next preceding the date of issue of such shares,
          unless the date of issue of such shares is prior to the record date
          for the first Quarterly Dividend Payment Date, in which case dividends
          on such shares shall begin to accrue from the date of issue of such
          shares, or unless the date of issue is a Quarterly Dividend Payment
          Date or is a date after the record date for the determination of
          holders of shares of Series A Preferred Stock entitled to receive a
          quarterly dividend and before such Quarterly Dividend Payment Date, in
          either of which events such dividends shall begin to accrue and be
          cumulative from such Quarterly Dividend Payment Date. Accrued but
          unpaid dividends shall not bear interest. Dividends paid on the shares
          of Series A Preferred Stock in an amount less than the total amount of
          such dividends at the time accrued and payable on such shares shall be
          allocated pro rata on a share-by-share basis among all such shares at
          the time outstanding. The Board of Directors may fix a record date for
          the determination of holders of shares of Series A Preferred Stock
          entitled to receive payment of a dividend or distribution declared
          thereon, which record date shall be no more than 60 days prior to the
          date fixed for the payment thereof.

     Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:

               (A) Subject to the provision for adjustment hereinafter set
          forth, each share of Series A Preferred Stock shall entitle the holder
          thereof to 100 votes on all matters submitted to a vote of the
          stockholders of the Corporation. In the event the Corporation shall at
          any time declare or pay any dividend on the Common Stock payable in
          shares of Common Stock, or effect a subdivision or combination or
          consolidation of the outstanding shares of Common Stock (by
          reclassification or otherwise than by payment of a dividend in shares
          of Common Stock) into a greater or lesser number of shares of Common
          Stock, then in each such case the number of votes per share to which
          holders of shares of Series A Preferred Stock were entitled
          immediately prior to such event shall be adjusted by multiplying such
          number by a fraction, the numerator of which is the number of shares
          of Common Stock outstanding immediately after such event and the
          denominator of which is the number of shares of Common Stock that were
          outstanding immediately prior to such event.




               (B) Except as otherwise provided herein, in any other Certificate
          of Designation creating a series of Preferred Stock or any similar
          stock, or by law, the holders of shares of Series A Preferred Stock
          and the holders of shares of Common Stock and any other capital stock
          of the Corporation having general voting rights shall vote together as
          one class on all matters submitted to a vote of stockholders of the
          Corporation.

               (C) Except as set forth herein, or as otherwise provided by law,
          holders of Series A Preferred Stock shall have no special voting
          rights and their consent shall not be required (except to the extent
          they are entitled to vote with holders of Common Stock as set forth
          herein) for taking any corporate action.


Section 4.        Certain Restrictions.
                  --------------------

     (A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:

          (i) declare or pay dividends, or make any other distributions, on any
          shares of stock ranking junior (either as to dividends or upon
          liquidation, dissolution or winding up) to the Series A Preferred
          Stock;

          (ii) declare or pay dividends, or make any other distributions, on any
          shares of stock ranking on a parity (either as to dividends or upon
          liquidation, dissolution or winding up) with the Series A Preferred
          Stock, except dividends paid ratably on the Series A Preferred Stock
          and all such parity stock on which dividends are payable or in arrears
          in proportion to the total amounts to which the holders of all such
          shares are then entitled;

          (iii) redeem or purchase or otherwise acquire for consideration shares
          of any stock ranking junior (either as to dividends or upon
          liquidation, dissolution or winding up) to the Series A Preferred
          Stock, provided that the Corporation may at any time redeem, purchase
          or otherwise acquire shares of any such junior stock in exchange for
          shares of any stock of the Corporation ranking junior (either as to
          dividends or upon dissolution, liquidation or winding up) to the
          Series A Preferred Stock; or




          (iv) redeem or purchase or otherwise acquire for consideration any
          shares of Series A Preferred Stock or any shares of stock ranking on a
          parity with the Series A Preferred Stock, excerpt in accordance with a
          purchase offer made in writing or by publication (as determined by the
          Board of Directors) to all holders of such shares upon such terms as
          the Board of Directors, after consideration of the respective annual
          dividend rates and other relative rights and preferences of the
          respective series and classes, shall determine in good faith will
          result in fair and equitable treatment among the respective series or
          classes.

               (B) The Corporation shall not permit any subsidiary of the
          Corporation to purchase or otherwise acquire for consideration any
          shares of stock of the Corporation unless the Corporation could, under
          paragraph (A) of this Section 4, purchase or otherwise acquire such
          shares at such time and in such manner.

     Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized by unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Articles of Organization, or in any other Certificate of Designation creating a
series of Preferred Stock or any similar stock or as otherwise required by law.

     Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock, and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock,




or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

     Section 7. CONSOLIDATION, MERGER, ETC. In case, the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation at any time declares or pays any dividend on the
Common Stock payable in shares of Common Stock, or effects a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise then by payment of a dividend in shares of Common
Stock) into a greater or less number of shares of Common Stock, then in each
such case the number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

     Section 8. NO REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable.

     Section 9. RANK. The Series A Preferred Stock shall rank junior with
respect to the payment of dividends and the distribution of assets to all other
series of the Corporation's Preferred Stock.

     Section 10. AMENDMENT. The Articles of Organization of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.




     IN WITNESS WHEREOF, BIOGEN, INC. has caused this certificate to be executed
by its President and attested by its Assistant Clerk this 25th day of May, 1989.


                                           s/s  Frederic A. Eustis, III
                                               -----------------------------
                                                Vice President-General Counsel

Attest:

s/s Sarah P. Cecil
   ------------------
    Assistant Clerk







IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our
names this 25th day of May in the year 1989.



___________________________________         Vice President



___________________________________         Assistant Clerk






                        THE COMMONWEALTH OF MASSACHUSETTS


                  Certificate of Vote of Directors Establishing
                          A Series of a Class of Stock

                    (General Laws, Chapter 156B, Section 26)

                I hereby approve the within certificate and, the
                       filing fee in the amount of $100.00
             having been paid, said certificate is hereby filed this
                                25th day of May,
                                      1989





                                           s/s_______________________
                                           Michael Joseph Connolly
                                           Secretary of State


                         To be Filled in By Corporation
                      Photo Copy of Certificate to Be Sent

                           To: Anne L. Bruno, Esquire
               Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
                              One Financial Center
                                Boston, MA 02111
                            Telephone: (617) 542-6000






                        THE COMMONWEALTH OF MASSACHUSETTS
                 OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
                       MICHAEL JOSEPH CONNOLLY, Secretary
                      ONE ASHBURTON PLACE, BOSTON, MA 02108

                            ARTICLES OF ORGANIZATION
                              (Under G.L. Ch. 156B)

                                    ARTICLE I

                         The name of the corporation is:
                           BIOGEN MASSACHUSETTS, INC.

                                   ARTICLE II

                   The purpose of the corporation is to engage
                      in the following business activities

                        (See Pages 2(a) - 2(b) attached)

       Note:      If the space provided under any article or item on this form
                  in insufficient, additions shall be set forth on separate
                  8 1/2 x 11 sheets of paper leaving a left hand margin of at
                  least 1 inch. Additions to more than one article may be
                  continued on a single sheet so long each article requiring
                  each such addition is clearly indicated.






                                   ARTICLE III

The type and classes of stock and the total number of shares and par value, if
any, of each type and class of stock which the corporation is authorized to
issue is as follows:




- -------------------------------------------------------------------------------
WITHOUT PAR VALUE STOCKS                  WITH PAR VALUE STOCKS
- -------------------------------------------------------------------------------
     TYPE     NUMBER OF               TYPE      NUMBER OF    PAR VALUE
              SHARES                            SHARES
- -------------------------------------------------------------------------------
                                                    
COMMON:                            COMMON:      200,000      $.01
PREFERRED:                         PREFERRED:   100,000      $.01
- -------------------------------------------------------------------------------



                                   ARTICLE IV

If more than one type, class or series is authorized, a description of each
with, if any, the preferences, voting powers, qualifications, a special or
relative rights or privileges as to each type and class thereof and any series
now established.

(See Pages 4(a) - 4(c)     attached)

                                    ARTICLE V

The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are as follows:

None.

                                   ARTICLE VI

Other lawful provisions, if any, for the conduct and regulation of business and
affairs of the corporation, for its voluntary dissolution, or for limiting,
defining, or regulating the powers of the corporation, or its directors or
stockholders, or of any class of stockholders: (If there are no provisions state
"None").

(See Pages 6(a) - 6(b) attached)

Note:    The preceding six (6) articles are considered to be
permanent and may ONLY be charged by filing appropriate Articles
of Amendment.





FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA  02142 617-864-8900 - TWX 740-320-1478
- -------------------------------------------------------------------------------

BIOGEN




June 28, 1988

Office of the Massachusetts
Secretary of State
Michael J. Connolly, Secretary
One Ashburton Place
Boston, MA

Dear Sir:

     This is to inform you that the undersigned, Biogen Research Corp.,
organized under the laws of the Commonwealth of Massachusetts on May 29, 1980,
hereby consents to the use of the name "Biogen Massachusetts, Inc." by F.
Augusta Crease as incorporator of a new corporation under the laws of the
Commonwealth of Massachusetts to be named "Biogen Massachusetts, Inc."

Very truly yours,


Biogen Research Corp.

By: /s/ Frederic A. Eustis, III
    -----------------------------------
    Frederic A. Eustis, III
    Clerk






FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA  02142 617-864-8900 - TWX 740-320-1478
- -------------------------------------------------------------------------------

BIOGEN




June 28, 1988

Office of the Massachusetts
Secretary of State
Michael J. Connolly, Secretary
One Ashburton Place
Boston, MA

Dear Sir:

     This is to inform you that the undersigned, Biogen Medical Products, Inc.
organized under the laws of the Commonwealth of Massachusetts on July 29, 1983,
hereby consents to the use of the name "Biogen Massachusetts, Inc." by F.
Augusta Crease as incorporator of a new corporation under the laws of the
Commonwealth of Massachusetts to be named "Biogen Massachusetts, Inc."

Very truly yours,


Biogen Medical Products, Inc.

By: /s/ Frederic A. Eustis, III
    ---------------------------------
    Frederic A. Eustis, III
    Clerk






FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA  02142 617-864-8900 - TWX 740-320-1478
- -------------------------------------------------------------------------------

BIOGEN




June 28, 1988

Office of the Massachusetts
Secretary of State
Michael J. Connolly, Secretary
One Ashburton Place
Boston, MA

Dear Sir:

     This is to inform you that the undersigned, Biogen Marketing Corp.,
previously known as Biogen Inc., organized under the laws of the Commonwealth of
Massachusetts on May 28, 1980 and qualified as a Foreign Corporation with the
Commonwealth of Massachusetts on February 4, 1983, hereby consents to the use of
the name "Biogen Massachusetts, Inc." by F. Augusta Crease as incorporator of a
new corporation under the laws of the Commonwealth of Massachusetts to be named
"Biogen Massachusetts, Inc."

Very truly yours,


Biogen Marketing Corp.

By:  /s/ Frederic A. Eustis, III
     _________________________________
     Frederic A. Eustis, III
     Secretary















         In WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto
signed our names this 20th day of June, in the year 1989.


           /s/ James L. Vincent
____________________________________________, President
             James L. Vincent


         /s/ Frederic A. Eustis, III
_____________________________________________, Clerk
           Frederic A. Eustis, III









                        THE COMMONWEALTH OF MASSACHUSETTS
                  Certificate of Vote of Directors Establishing
                          A Series of a Class of Stock

                    (General Laws, Chapter 156B, Section 26)

                I hereby approve the within certificate and, the
                       filing fee in the amount of $100.00
             having been paid, said certificate is hereby filed this
                             20th day of June, 1989





                                               s/s_______________________
                                               MICHAEL JOSEPH CONNOLLY
                                               Secretary of State


                         To be Filled in By Corporation
                      Photo Copy of Certificate to Be Sent

                         To: Elisabeth A. Sottile, L.A.
                              Mintz, Levin, et al.
                              One Financial Center
                                Boston, MA 02111
                             Telephone: 617/542-6000






                      ARTICLES OF ORGANIZATION (CONTINUED)
                           BIOGEN MASSACHUSETTS, INC.

                              2. CORPORATE PURPOSES

     The purposes for which the Corporation is formed are as follows:

     To engage in or cause to be carried out research, development,
manufacturing and marketing in the field of biotechnology and generally in the
biological, chemical, pharmaceutical, agricultural, energy, nutritional, mining
and other related fields and to engage in related commercial activities;

     To develop and acquire, manage, exploit, license and alienate patents,
processes or formulate, trademarks and copyrights, including all related rights;

     To purchase or otherwise acquire, invest in, own mortgage, pledge, sell,
assign and transfer or otherwise dispose of, trade and deal in and with personal
property of every kind, class and description (including, without limitation,
goods, wares and merchandise of every kind, class and description), to
manufacture goods, wares and merchandise of every kind, class and description,
both on its own account and for others;

     To borrow or lend money, and to make and issue notes, bonds, debentures,
obligations and evidences of indebtedness of all kinds, whether or not secured
by mortgage, pledge or otherwise, without limit as to amount, and to secure the
same by mortgage, pledge, or otherwise, and generally to make and perform
agreements and contracts of every kind and description.

     To purchase, receive, take by grant, lease or otherwise acquire, own, hold,
improve, employ, use, mortgage, pledge, assign, transfer or otherwise dispose of
and otherwise deal in and with, real property, or any interest therein, wherever
situated;

     To subscribe for, take, acquire, hold, sell exchange and deal in shares,
bonds, obligations and securities of any corporation, government, authority or
company and to make such other investments as the Corporation may see fit;

     To establish, participate in, promote, subsidize and assist companies ,
syndicates, or partnerships of all kinds and to finance and refinance the same;

     To guarantee to the fullest extent permitted by law the payment of
principal, premium (if any), interest, or dividends with respect to bonds,
debentures, bills of exchange, notes and other evidences of indebtedness, stock
and other securities, and to guarantee the performance of any contract or
obligation,





entered into by any corporation, partnership, association, trust or
any other entity or natural person whether established or domiciled within or
outside the Corporation's jurisdiction of incorporation;

     To operate branches in various foreign countries and generally to engage in
or carry on foreign operations; and

     Generally to engage in or carry on any business permitted by the laws of
the Commonwealth of Massachusetts to a corporation organized under the
Massachusetts Business Corporation Law or any successor statute.










                      ARTICLES OF ORGANIZATION (CONTINUED)
                           BIOGEN MASSACHUSETTS, INC.

                       4. DESCRIPTION OF CLASSES OF STOCK


     Any and all shares of stock issued, and for which the full consideration
has been paid or delivered, shall be deemed fully paid stock; and the holder of
such shares shall not be liable for any further call or assessment of any other
payment thereon.

     (a) Each holder of Common Stock shall at every meeting of stockholders be
entitled to one vote in person or by proxy for each share of Common Stock held
by him. The holders of the Common Stock shall be entitled to such dividends as
may from time to time be declared by the Board of Directors out of any funds
legally available for the declaration of dividends, subject to any provision of
these Articles of Organization, as amended from time to time, and subject to the
relative rights and preferences of any shares of Preferred Stock authorized and
issued hereunder. No share of Common Stock shall entitle its holder to have any
preemptive right in or preemptive right to subscribe to any additional shares of
Common Stock or any shares of any other class of stock which may at any time be
authorized or issued, or any bonds, debentures or other securities convertible
into shares of stock of any class of the Corporation, or options or warrants
carrying rights to purchase such shares or securities;

     (b) The Board of Directors is authorized, subject to limitations prescribed
by law and the provisions of this Article 4, to provide for the issuance of the
shares of Preferred Stock, with or without series, and, by filing a certificate
pursuant to the applicable law of the Commonwealth of Massachusetts (the
"Certificate of Designation"), to establish from time to time the number of
shares to be included in each such series and to fix the designation,
preferences, voting powers, qualifications and special or relative rights or
privileges of the shares of each such series. In the event that at any time the
Board of Directors shall have established and designated one or more series of
Preferred Stock consisting of a number of shares less than all of the authorized
number of shares of Preferred Stock, the remaining authorized shares of
Preferred Stock shall be deemed to be shares of an underdesignated series of
Preferred Stock until designated by the Board of Directors as being a part of a
series previously established or a new series then being established by the
Board of Directors. Notwithstanding the fixing of the number of shares
constituting a particular series, the Board of Directors may at any time
thereafter authorize the issuance of additional shares of the same series except
as set forth in the Certificate of Designation.

     The authority of the Board of Directors with respect to each series of
Preferred Stock shall include, but not be limited to, determination of the
following:






               (i)   the number of shares constituting that series and the
                     distinctive designation of that series, and whether
                     additional shares of that series may be issued;

               (ii)  whether any dividends shall be paid on shares of that
                     series, and, if so, the dividend rate on the shares of that
                     series; whether dividends shall be cumulative and, if so,
                     from which date or dates, and the relative rights of
                     priority, if any, of payment of dividends on shares of that
                     series;

               (iii) whether shares of that series shall have voting rights in
                     addition to the voting rights provided by law and, if so,
                     the terms of such voting rights;

               (iv)  whether shares of that series shall be convertible into
                     shares of Common Stock or another security and, if so, the
                     terms and conditions of such conversion, including
                     provisions for adjustment of the conversion rate in such
                     events as the Board of Directors shall determine;

               (v)   whether or not the shares of that series shall be
                     redeemable and, if so, the terms and conditions of such
                     redemption, including the date or dates upon or after
                     which they shall be redeemable and the amount per share
                     payable in cash of redemption, which amount may vary under
                     different conditions and at different redemption dates;
                     and whether that series shall have a sinking fund for the
                     redemption or purchase of shares of that series and, if
                     so, the terms and amount of such sinking fund;

               (vi)  whether, in the event of purchase or redemption of the
                     shares of that series, any shares of that series shall be
                     restored to the status of authorized by unissued shares or
                     shall have such other status as shall be set forth in the
                     Certificate of Designation;

               (vii) the rights of the shares of that series in the event of the
                     sale, conveyance, exchange or transfer of all or
                     substantially all of the property and assets of the
                     Corporation, or the merger





                    or consolidation of the Corporation into or with any other
                    corporation, or the merger of any other corporation into it,
                    or the voluntary or involuntary liquidation, dissolution or
                    winding up of the Corporation, and the relative rights of
                    priority, if any, of shares of that series to payment in any
                    such event;

             (viii) whether the shares of that series shall carry any
                    preemptive right in or preemptive right to subscribe for any
                    additional shares of Preferred Stock or any shares of any
                    other class of stock which may at any time be authorized or
                    issued, or any bonds, debentures or other securities
                    convertible into share of stock of any class of the
                    Corporation, or options or warrants carrying rights to
                    purchase such shares or securities; and

             (ix)   any other designation, preferences, voting powers,
                    qualifications, and special or relative rights or privileges
                    of the shares of that series.






                      ARTICLES OF ORGANIZATION (CONTINUED)
                           BIOGEN MASSACHUSETTS, INC.

                        6A. CERTAIN BUSINESS COMBINATIONS

(a)  Vote Required for Certain Business Combinations.
     -----------------------------------------------

     (1) HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS. In addition to any
affirmative vote required by law or these Articles of Organization, and except
as otherwise expressly provided in paragraph (b) of this Article 6A:

          (i) any merger or consolidation of the Corporation or any Subsidiary
     (an hereinafter defined) with (a) any Interested Stockholder (as
     hereinafter defined) or (b) any other corporation (whether or not itself an
     Interested Stockholder) which is, or after such merger or consolidation
     would be, an Affiliate (as hereinafter defined) of an Interested
     Stockholder; or

          (ii) any sale, lease, license, exchange, exchange, mortgage, pledge,
     transfer or other disposition (in one transaction or a series of
     transactions) to or with any Interested Stockholder or any Affiliate of any
     Interested Stockholder of any assets of the Corporation or any Subsidiary
     having an aggregate Fair Market Value (as hereinafter defined) equal to or
     greater than 10% of the combined assets of the Corporation and its
     Subsidiaries; or

          (iii) the issuance or transfer by the Corporation or any Subsidiary
     (in one transaction or a series of transactions) of any securities of the
     Corporation or any Subsidiary to any Interested Stockholder or any
     Affiliate of any Interested Stockholder in exchange for cash, securities or
     other property (or a combination thereof) having an aggregate Fair Market
     Value equal to or greater than 10% of the combined assets of the
     Corporation and its Subsidiaries, except pursuant to an employee benefit
     plan of the Corporation or any Subsidiary thereof; or

          (iv) any reclassification of securities of the Corporation (including
     any reverse stock split), or recapitalization of the Corporation, or any
     merger or consolidation of the Corporation with any of its Subsidiaries or
     any other transaction (whether or not with or into or otherwise involving
     an Interested Stockholder) which has the effect, directly or indirectly, of
     increasing the proportionate share of the outstanding shares of any class
     of equity or convertible securities of the Corporation or any Subsidiary
     which are directly or indirectly owned by any Interested Stockholder or any
     Affiliate of any Interested Stockholder; or





          (v) the adoption of any plan or proposal for the liquidation or
     dissolution of the Corporation proposed by or on behalf of an Interested
     Stockholder or any Affiliate of any Interested Stockholder

shall require the affirmative vote of the holders of at least eighty percent
(80%) of the voting power of the then outstanding shares of capital stock of the
Corporation entitled to vote in the election of directors (the "Voting Stock"),
voting together as a single class (it being understood that for purposes of this
Article 6A, each share of the Voting Stock shall have the number of votes
granted to it pursuant to Article 4 of these Articles of Organization). Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or by any other
provisions of these Articles of Organization or any Certificate of Designation
(as defined in Article 4 of these Articles of Organization), or in any agreement
with any national securities exchange or otherwise.

     (2) DEFINITION OF "BUSINESS COMBINATION". The term "Business Combination"
as used in this Article 6A shall mean any transaction which is referred to in
any one or more of clauses (i) through (v) of subparagraph (a).

(b) WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of paragraph (a) of this
Article 6A shall not be applicable to any particular Business Combination, and
such Business Combination shall require only such affirmative vote as is
required by law and any other provisions of these Articles of Organization, if,
in the case of any Business Combination that does not involve any cash or other
consideration being received by the stockholders of the Corporation solely in
their capacity as stockholders of the Corporation, the condition specified in
the following subparagraph (b)(1) is met, or, in the case of any other Business
Combination, all of the conditions specified in either of the following
subparagraphs (b)(1) or (b)(2) are met:

     (1) APPROVAL BY DISINTERESTED DIRECTORS. The Business Combination shall
have been approved by a majority of the members of the Board of Directors (the
"Board") who are Disinterested that this condition shall not be capable of
satisfaction unless there is at least on Disinterested Director.

     (2) PRICE AND PROCEDURAL REQUIREMENTS. All of the following conditions
shall have been met:

          (i) The aggregate amount of the cash and the Fair Market Value as of
     the date of the consummation of the Business Combination of consideration
     other than cash to be received per share by the holders of Common Stock of
     the Corporation in such Business Combination shall be at least equal to the
     higher or the following:




               (A) (if applicable) the highest per share price (including any
          brokerage commissions, transfer taxes and soliciting dealers' fees)
          paid by the Interested Stockholder or any of its Affiliates for any
          shares of Common Stock of the Corporation acquired by it (1) within
          the two-year period immediately prior to the first public announcement
          of the proposal of the Business Combination (the "Announcement Date")
          or (2) in the transaction in which it became an Interested
          Stockholder, whichever is higher; or

               (B) the Fair Market Value per share of Common Stock of the
          Corporation on the Announcement Date or on the date on which the
          Interested Stockholder became an Interested Stockholder (the
          "Determination Date"), whichever is higher.

          (ii) The aggregate amount of the cash and the Fair Market, Value as or
     the date of the consummation of the Business Combination of consideration
     other than cash to be received per share by holders of shares of
     outstanding Voting Stock other than Common Stock shall be at least equal to
     the highest of the following (it being intended that the requirements of
     this subparagraph (b)(2)(ii) shall be required to be met with respect to
     every class of outstanding Voting Stock, whether or not the Interested
     Stockholder has previously acquired any shares of a particular class of
     Voting Stock);

               (A) (if applicable) the highest per share price (including any
          brokerage commissions, transfer taxes and soliciting dealers fees)
          paid by the Interested Stockholder or any of its Affiliates for any
          shares of such class of Voting Stock acquired or beneficially owned by
          it that were acquired (1) within the two-year period immediately prior
          to the Announcement Date or (2) in the transaction in which it became
          an Interested Stockholder, whichever is higher; or

               (B) (if applicable) the highest preferential amount per share to
          which the holders of shares of such class of Voting Stock are entitled
          in the event of any voluntary liquidation, dissolution or winding up
          of the Corporation; or

               (C) the Fair Market Value per share of such class of Voting Stock
          on the Announcement Date or on the Determination Date, whichever is
          higher.

          (iii) The price determined in accordance with subparagraphs (i) and
     (ii) of this subparagraph (b)(2) shall be subject to appropriate adjustment
     in the event of any stock dividend, stock split, combination of shares or
     similar event.




          (iv) The holders of all outstanding shares of Voting Stock not
     beneficially owned by the Interested Stockholder immediately prior to the
     consummation of any Business Combination shall be entitled to receive in
     such Business Combination cash or the consideration for their shares meting
     all of the terms and conditions of this paragraph (2) (provided, however,
     that the failure of any stockholders who are exercising their statutory
     rights to dissent from such Business Combination and receive payment of the
     fair value of their shares to exchange their shares in such Business
     Combination shall not be deemed to have prevented the condition set forth
     in this subparagraph (2)(iv) from being satisfied).

          (v) The consideration to be received by holders of any particular
     class of outstanding Voting Stock (including Common Stock) shall be in cash
     or in the same form as the Interested Stockholder has previously paid for
     shares of such class of Voting Stock. If the Interested Stockholder has
     paid for shares of any class of Voting Stock with varying forms of
     consideration, the form of consideration to be received per share by
     holders of such class of Voting Stock shall be either cash or the form used
     to acquire the largest number of shares of such class of Voting Stock
     previously acquired by the Interested Stockholder.

          (vi) After such Interested Stockholder has become an Interested
     Stockholder and prior to the consummation of such Business Combination: (A)
     except as approved by a majority of the Disinterested Director, there shall
     have been no failure to declare and pay at the regular date therefor any
     full quarterly dividends (whether or not cumulative) on any outstanding
     Preferred Stock of the Corporation; (B) there shall have been (I) no
     reduction in the annual rate of dividends paid on the Common Stock of the
     Corporation (except as necessary to reflect any subdivision of the Common
     Stock), except as approved by a majority of the Disinterested Directors,
     and (II) an increase in such annual rate of dividends as necessary to
     reflect any reclassification (including any reverse stock split),
     recapitalization, reorganization or any similar transaction which has the
     effect of reducing the number of outstanding shares of the Common Stock,
     unless the failure to increase such annual rate is approved by a majority
     of the Disinterested Directors; and (C) neither such Interested Stockholder
     nor any of its Affiliates shall have become the beneficial owner of any
     additional shares of Voting Stock except as part of the transaction which
     results in such Interested Stockholder becoming an Interested Stockholder.

          (vii) After such Interested Stockholder has become a Interested
     Stockholder, such Interested Stockholder, such Interested Stockholder shall
     not have received the benefit, directly or indirectly (except
     proportionately as a





     stockholder), of any loans, advances, guarantees, pledges or the financial
     assistance or any tax credits or other tax advantages provided by the
     Corporation, whether in anticipation of or in connection with such Business
     Combination or otherwise.

          (viii) A proxy or information statement describing the proposed
     Business Combination and complying with the requirements of the Securities
     Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
     regulations thereunder (or any subsequent provisions replacing the Exchange
     Act or such rules or regulations) shall be mailed to stockholders of the
     Corporation at least thirty (30) days prior to the consummation of such
     Business Combination (whether or not such proxy or information statement is
     required to be mailed pursuant to the Exchange Act or subsequent
     provisions). Such proxy or information statement shall contain, if a
     majority of the Disinterested Directors so requests, an opinion of a
     reputable investment banking firm which shall be selected by majority of
     the Disinterested Directors, furnished with all information such investment
     banking firm reasonably requests and paid a reasonable fee for its services
     by the Corporation upon the Corporation's receipt of such opinion, as to
     the fairness (or lack of fairness) of the terms of the proposed Business
     Combination from the point of view of the holders of shares of Voting Stock
     (other than the Interested Stockholder).

(c)  Certain Definitions.  For the purposes of this Article 6A:
     -------------------

     (1) A "person" shall include any individual, group acting in concert,
corporation, partnership, association, joint venture, pool, joint stock company,
trust, unincorporated organization or similar company, syndicate, or any group
formed for the purpose of acquiring, holding or disposing of securities.

     (2) "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:

          (i) is the beneficial owner, directly or indirectly, of more than
     fifteen percent (15%) of the voting power of the then outstanding Voting
     Stock; or

          (ii) is an Affiliate of the Corporation and at any time within the
     two-year period immediately prior to the date in question was the
     beneficial owner, directly or indirectly, of more than fifteen percent
     (15%) of the voting power of the then outstanding Voting Stock; or

          (iii) is an assignee of or has otherwise succeeded to any shares of
     Voting Stock which were at any time within the two-year period immediately
     prior to the date in question beneficially owned by any Interested
     Stockholder, if such assignment or succession shall have occurred in the





     course of a transaction or series of transactions not involving a public
     offering within the meaning of the Securities Act of 1933.

     (3) A person shall be a "beneficial owner" of any shares of Voting Stock:

          (i) which such person or any of its Affiliates or Associates (as
     hereinafter defined) beneficially owns, directly or indirectly within the
     meaning of Rule 13d-3 of the Exchange Act, as in effect on March 31, 1988;
     or

          (ii) which such person or any of its Affiliates or Associates has (A)
     the right to require (whether such right is exercisable immediately or only
     after the passage of time), pursuant to an agreement, arrangement or
     understanding or upon the exercise of conversion rights, exchange rights,
     exchange rights, warrants or options, or otherwise; provided, however, that
     a person shall not be deemed the beneficial owner of securities tendered
     pursuant to a tender or exchange offer made by or on behalf of such person
     or any of such person's Affiliates or Associates until such tendered
     securities are accepted for purchase; or (B) the right to vote pursuant to
     any agreement, arrangement, understanding or otherwise; provided, however,
     that a person shall not be deemed the beneficial owner of any security if
     the agreement, arrangement or understanding to vote such security (I)
     arises solely from a revocable proxy or consent solicitation made pursuant
     to, and in accordance with, the Exchange Act and (II) is not also then
     reportable on Schedule 13D under the Exchange Act (or a comparable or
     successor report); or

          (iii) which are beneficially owned, directly or indirectly within the
     meaning of Rule 13d-3 under the Exchange Act, as in effect on March 31,
     1988, by any other person with which such person or any of its Affiliates
     or Associates has any agreement, arrangement or understanding for the
     purpose of acquiring, holding, voting (except to the extent permitted by
     the provision of subparagraph (c)(3)(ii)(B) above) or disposing of any
     shares of Voting Stock;

provided, however, that in the case of any employee stock ownership or similar
plan of the Corporation or of any Subsidiary in which the beneficiaries thereof
possess the right to vote any shares of Voting Stock held by such plan, no such
plan nor any trustee with respect thereto (nor any Affiliate of such trustee),
solely by reason of such capacity of such trustee, shall be deemed, for any
purposes hereof, to beneficially own any shares of Voting Stock held under any
such plan.

     (4) For the purposes of determining whether a person is a Interested
Stockholder pursuant to subparagraph (c)(2), the




number of shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of subparagraph (c)(3), but shall not include
any other shares of Voting Stock which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.

     (5) "Affiliate" and "Associate" shall have the meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act,
as in effect on March 31, 1988.

     (6) "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of Interested Stockholder set
forth in subparagraph (c)(2), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.

     (7) "Disinterested Director" means any Director of the Corporation who is
not an Affiliate or Associate of the Interested Stockholder and was a member of
the Board prior to the time that the Interested Stockholder became an Interested
Stockholder, and any Director who is thereafter chosen to fill any vacancy on
the Board or who is elected and who, in either event, is not an Affiliate or
Associate of the Interested Stockholder and in connection with his or her
initial assumption of office is recommended for appointed or election by a
majority of Disinterested Directors then serving on the Board.

     (8) "Fair Market Value" means: (i) in the case of stock the highest closing
sale price during the 30-day period immediately preceding ad including the date
in question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Exchange Act on which such stock is listed, or, if such stock is not listed
on any such exchange, the highest closing bid quotation with respect to a share
of such stock during the 30-day period preceding and including the date in
question on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or, if no such quotations are
available, the fair market value on the date in question of a share of such
stock as determined in good faith by a majority of the Disinterested Directors;
and (ii) in the case of property other than cash or stock, the fair market value
of such property on the date in question as determined in good faith by a
majority of the Disinterested Directors.

     (9) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash




to be received" as used in subparagraphs (b)(2)(i) and (ii) of this Article 6A
shall include the shares of Common Stock of the Corporation and/or the shares of
any other class of outstanding Voting Stock retained by the holders of such
shares.

     (10) For the purposes of determining the "Announcement Date," in the event
that the first public announcement of the proposal of the Business Combination
is made after the close on such date of any securities exchange registered under
the Exchange Act on which any shares of the Voting Stock of the Corporation
traded, or of the National Association of Securities Dealers, Inc. Automated
Quotations System or any other system on which any shares of the Voting Stock of
the Corporation are listed, then the Announcement Date shall be deemed to be the
next day on which such exchange or quotations system is open.

(d) POWERS OF THE BOARD OF DIRECTORS. A majority of the Board shall have the
power and duty to determine for the purposes of this Article 6A, on the basis of
information known to them after reasonable inquiry, whether a person is an
Interested Stockholder, which determination shall be conclusive. Once the Board
has made a determination, pursuant to the preceding sentence, that a person is
an Interested Stockholder, then a majority of Disinterested Directors shall have
the power and duty to determine for the purposes of this Article 6A, on the
basis of information known to them after reasonable inquiry, (i) the number of
shares of Voting Stock beneficially owned by any person, (ii) whether a person
is an Affiliate or Associate of another, (iii) whether the assets which may be
the subject of any Business Combination have, or the consideration which may be
received for the issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair Market Value equal
to or greater than 10% of the combined assets of the Corporation and its
subsidiaries and (iv) whether all of the applicable conditions set forth in
subsection (b)(2) shall have been met with respect to any Business Combination,
any of which determinations by a majority of the Disinterested Directors shall
be conclusive. A majority of the Disinterested Directors shall have the further
power to interpret all of the terms and provision of this Article 6A, which
interpretation shall be conclusive.

(e) NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED STOCKHOLDERS. Nothing
contained in this Article 6A shall be construed to relieve any Interested
Stockholder of any fiduciary obligation imposed by law.

(f) AMENDMENT, REPEAL, ETC. Notwithstanding any other provisions of these
Articles of Organization or the By-Laws of the Corporation (and notwithstanding
the fact that a lesser percentage or no vote may be specified by law, these
Articles of Organization or the By-Laws of the Corporation), and in addition to
any affirmative vote of the holders of Preferred Stock or any other class of
capital stock of the Corporation or any series of




the foregoing then outstanding which is required by law or pursuant to these
Articles of Organization, the affirmative vote of the holders of eighty percent
(80%) or more of the voting power of the outstanding Voting Stock, voting
together as a single class, shall be required to amend or repeal, or adopt any
provisions inconsistent with, this Article 6A.












6B.  CERTAIN TRANSACTIONS APPROVED BY THE BOARD OF DIRECTORS

     Except as provided in Article 6A of, or as otherwise provided in, these
Articles of Organization, the Corporation may authorize, by a vote of a majority
of the shares of each class of stock outstanding and entitled to vote thereon,
(a) the sale, lease or exchange of all or substantially all of its property and
assets, including its goodwill, upon such terms and conditions as it deems
expedient, and (b) the merger or consolidation of the Corporation with or into
any other corporation, provided, however, that such sale, lease, exchange,
merger or consolidation shall have been approved by a majority of the members of
the Board of Directors.









6C.  BOARD OF DIRECTORS

     (a) MANDATE AND NUMBER. The business and affairs of the Corporation shall
be managed under the direction of the Board of Directors, the number of which,
subject to any right of the elect additional directors under specified
circumstances, shall be fixed from time to time by the Board of Directors
pursuant to the By-Laws of the Corporation.

     (b) TERM. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, the directors shall be divided into three classes, as
nearly equal in number as possible, with the term of office of the first class
to expire at the 1989 Annual Meeting of Stockholders or any special meting in
lieu thereof, the term of office of the second class to expire at the 1990
Annual Meeting of Stockholders or any special meeting in lieu thereof and the
term of office of the third class to expire at the 1991 Annual Meeting of
Stockholders or any special meeting in lieu thereof. At each Annual Meeting of
Stockholders or special meeting in lieu thereof following such initial
classification and election, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at the third
succeeding Annual Meeting of Stockholders or special meeting in lieu thereof
after their election and until their successors are duly elected and qualified.

     (c) NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Subject to the rights of the
holders of any series of Preferred Stock then outstanding, newly created
directorships resulting from any increase in the authorized number of directors
or any vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause may be filled
only by a majority vote of the directors then in office even though less than a
quorum, or by a sole remaining director. In the event of any vacancy resulting
other than from an increase in the authorized number of directors, the director
elected as provided in the foregoing sentence shall serve for the remainder of
the full term of the class in which the vacancy occurred rather than until the
next Annual Meeting of Stockholders. In the event of any increase or decrease in
the authorized number of directors, (i) each director then serving as such shall
nevertheless continue as director of the class of which he is a member until the
expiration of his current term or his prior death, retirement or resignation and
(ii) the newly created or eliminated directorships resulting from such increase
or decrease shall be apportioned by the Board of Directors among the three
classes of directors so as to ensure that no one class has more than one
director more than any other class. To the extent one director more than any
other class. To the extent possible, consistent with the foregoing rule, any
newly created directorships shall be subtracted from those classes whose terms
of office terms of office are to expire at the latest dates following such
allocation and any newly eliminated directorships shall be subtracted from those
classes whose terms of office are to expire at the






earliest dates following such allocation, unless otherwise provided for from
time to time by resolution adopted by a majority of the directors then in
office, although less than a quorum. In the event of a vacancy in the Board of
Directors, the remaining directors, except as otherwise provided by law, may
exercise the powers of the full Board of Directors until the vacancy is filled.

     (d) REMOVAL. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any director, or the entire Board of
Directors, may be removed from office at any time (i) only for cause and (ii)
only by the affirmative vote of the holders of at least 80% of the voting power
of all of the then outstanding shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, or by
the affirmative vote of three-fourths of the directors then serving. A director
may be removed for cause only after a reasonable notice and opportunity to be
heard before the body proposing to remove him.

     (e) AMENDMENT, REPEAL, ETC. Notwithstanding anything contained in these
Articles of Organization to the contrary, the affirmative vote of the holders of
at least 80% of the total voting power of all of the outstanding shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend or repeal this
Article entitled "Board of Directors" or adopt any provision in these Articles
of Organization of the By-Laws inconsistent with this Article entitled "Board of
Directors."






6D.  INDEMNIFICATION

     (a) RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director or an officer of the Corporation or is or was serving at the request of
the Corporation as a director or officer of another corporation, including,
without limitation, any corporation or other entity of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation (a
"Subsidiary") or any Affiliate of the Corporation as such term is defined in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director or officer, or in any other
capacity while serving as a director or officer, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Massachusetts Business Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
such law permitted the Corporation to provide prior to such amendment), against
all expense, liability and loss (including, without limitation, attorneys' fees,
judgments, fines, ERISA excise taxes or penalties, costs of investigation and
preparation of defense and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such indemnitee in connection therewith; provided,
however that, except as provided in Section (c) hereof with respect to
proceedings to enforce rights of indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.

     (b) ADVANCE OF EXPENSES. The right to indemnification conferred in Section
(a) of this Article 6D shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"); provided, however, that
an advancement of expenses incurred by an indemnitee in his or her capacity as a
director or officer shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee,
to repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter a
"final adjudication") that such indemnitee is not entitled to the indemnified
for such expenses under this Section or otherwise. The rights to indemnification
and to the advancement of expenses conferred in Sections (a) and (b) of this






Article shall be contract rights ad such rights shall continue as to an
indemnitee who has ceased to be a director or officer and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.

     (c) RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section (a) or (b)
of this Article is not paid in full by the Corporation within sixty days after a
written claim has been received by the Corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period shall
be twenty days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in whole or
in part in any such suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee
shall be entitled to be paid also the expense of prosecuting or defending such
suit. In (i) any suit brought by the indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that, and
(ii) in any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the Corporation shall be entitled to
recover such expenses upon a final adjudication that, the indemnitee has not met
any applicable standard for indemnification set forth in the Massachusetts
Business Corporation Law. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) to have made
a determination prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Massachusetts Business
Corporation Law, nor an actual determination by the Corporation (including its
Board of Directors, independent legal counsel, or its stockholders) that the
indemnitee has not met such applicable standard of conduct, shall create a
presumption that the indemnitee has not met the applicable standard of conduct
or, in the case of such a suit brought by the indemnitee, be a defense to such
suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this Article or otherwise
shall be on the Corporation.

     (d) RIGHTS NOT EXCLUSIVE. The rights to indemnification and to the
advancement of expenses conferred in this Article shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute,
these Articles of Organization, the Corporation's By-Laws, or any agreement,
vote of stockholders or disinterested directors or otherwise.

         (e) INSURANCE. The Corporation may purchase and maintain insurance, at
its expense, to protect itself and any director



officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise, including, without
limitation, any Subsidiary or Affiliate or any employee benefit plan, against
any expense, liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss, whether
or not the Corporation would have the power to indemnify such person against
such expense, liability or loss under the Massachusetts Business Corporation
Law. The Corporation's obligation to provide indemnification under this Article
shall be offset to the extent of any payment received by the indemnitee from any
other source of indemnification or pursuant to any otherwise applicable
insurance coverage under a policy maintained by the Corporation or any other
person.

     (f) EMPLOYEES AND AGENTS. The Corporation may, to the extent authorized
from time to time by the Board of Directors, grant rights to indemnification and
to the advancement of expenses to any employee or agent of the Corporation or
any Subsidiary or Affiliate to the fullest extent of the provisions of this
Article with respect to the indemnification of and advancement of expenses to
directors and officers of the Corporation.

     (g) AGREEMENTS. The Corporation may, to the extent authorized from time to
time by the Board of Directors, enter into agreements with any director,
officer, employee or agent of the Corporation or any Subsidiary or Affiliate to
the fullest extent of the provisions of this Article with respect to the
indemnification of and advancement of expenses to such person.

     (h) AMENDMENT. Without the consent of a person entitled to the
indemnification and other rights provided in this Article (unless otherwise
required by the Massachusetts Business Corporation Law), no amendment modifying
or terminating such rights shall adversely affect such person's rights under
this Article with respect to the period prior to such amendment.

     (i) SAVINGS CLAUSE. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each indemnitee as to any liabilities
and expenses with respect to any proceeding to the fullest extent permitted by
any applicable portion of this Article that shall not have been invalidated and
to the fullest extent permitted by applicable law.







6E.  LIMITATION OF LIABILITY OF DIRECTORS

     No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director notwithstanding any provision of law imposing such liability;
provided, however, that this Article shall not eliminate or limit any liability
of a director (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Sections 61 or 62 of the Massachusetts Business Corporation Law, or (iv) with
respect to any transaction from which the director derived an improper personal
benefit.

     The provisions of this Article shall not eliminate or limit the liability
of a director of this Corporation for any act or omission occurring prior to the
date on which this Article became effective. No amendment or repeal of this
Article shall adversely affect the rights and protection afforded to a director
of this Corporation under this Article for acts or omissions occurring while
this Article is in effect.

     Is the Massachusetts Business Corporation Law is subsequently amended to
further eliminate or limit personal liability of directors or to authorize
corporate action to further eliminate or limit such liability, then the
liability of the directors of this Corporation shall, without any further action
of the Board of Directors or the stockholders of this Corporation, be eliminated
or limited to the fullest extent permitted by the Massachusetts Business
Corporation Law as so amended.









6F.  INTERCOMPANY DEALINGS

     The Corporation may enter into contracts or transact business with one or
more of its directors, officers or stockholders or with any corporation,
organization or other concern in which one or more of its directors, officers or
stockholders are directors, officers, stockholders or are otherwise interested
and may enter into other contracts or transactions in which one or more of its
directors, officers or stockholders are in any way interested. In the absence of
fraud, no such contract or transaction shall be invalidated or in any way
affected by the fact that such one or more of the directors, officers or
stockholders of the Corporation have or may have any interest which is or might
be adverse to the interest of the Corporation even though the vote or action of
directors, officers or stockholders having such adverse interest may have been
necessary to obligate the Corporation under such contract or transaction.

     At any meeting of the Board of Directors of the Corporation (or of any duly
authorized committee thereof) at which any such contract or transaction shall be
authorized or ratified, any such director or directors may vote or act thereat
with like force and effect as if he had not such interest, provided in such case
that the nature of such interest (though not necessarily the extent or details
thereof) shall be disclosed or shall have been known to the directors. A general
notice that a director or officer is interested in any corporation or other
concern of any kind referred to above shall be a sufficient disclosure as to the
interest of such director or officer with respect to all contracts and
transactions with such corporation or other concern. No director shall be
disqualified from holding office as a director or an officer of the Corporation
by reason of any such adverse interest, unless the Board of Directors shall
determine that such adverse interest is detrimental to the Corporation. In the
absence of fraud no director, officer or stockholder having such adverse
interest shall be liable on account of such adverse interest to the Corporation
or to any stockholder or creditor thereof or to any other person for any loss
incurred by it under or by reason of such contract or transaction, nor shall any
such director, officer or stockholder be accountable on such ground for any
gains or profits realized thereon.









6G.  MAKING, AMENDING AND REPEALING BY-LAWS

     The directors of the Corporation shall have power to make, alter, amend and
repeal the By-Laws of the Corporation in whole or in part except with respect to
any provision thereof which requires action by the stockholders, who shall also
have power to make, alter, amend and repeal the By-Laws of the Corporation. Any
By-Laws made by the directors under the powers conferred hereby may be altered,
amended, or repealed by the directors or the stockholders. Notwithstanding the
foregoing and anything contained in these Articles of Organization to the
contrary, Articles II and VII and Sections 2 and 3 of Article I of the By-Laws,
and this Article 6G, shall not be altered, amended or repealed, and no provision
inconsistent therewith or herewith shall be adopted, without the affirmative
vote of the holders of at least eighty percent (80%) of the voting power of all
shares of the shares of the Corporation entitled to vote generally in the
election of directors, voting together as a single class.









6H.  PLACE OF MEETINGS OF STOCKHOLDERS

     Meetings of stockholders of the Corporation may be held anywhere in the
United States to the extent permitted by the By-Laws.









6I.  PARTNERSHIP IN ANY BUSINESS ENTERPRISE

     The Corporation may be a partner in any business enterprise which the
Corporation would have the power to conduct by itself.









ARTICLES OF ORGANIZATION (CONTINUED)
BIOGEN MASSACHUSETTS, INC.




NAME                  Residence               Post Office Address
- ----                  ---------               -------------------

                                        
Harold W. Buirkle     150 Broad Avenue        150 Broad Avenue
                      Leonia, N.J.  07605     Leonia, N.J.  07605

Stuart F. Feiner      830 Cranford Avenue     830 Cranford Avenue
                      Westfield, N.J.         Westfield, N.J.

Walter Gilbert        107 Upland Road         107 Upland Road
                      Cambridge, MA           Cambridge, MA
                      02140                   02140

Jeremy R. Knowles     44 Coolidge Avenue      44 Coolidge Avenue
                      Cambridge, MA           Cambridge, MA
                      02140                   02140

Roger H. Morley       L'Horizon               L'Horizon
                      Clos Barnier            Clos Barnier
                      06530, Speracedes       06530, Speracedes
                      France                  France

Kenneth Murray        4 Blackford Hill        4 Blackford Hill
                      View                    View
                      Edinburgh EH9 3HD       Edinburgh EH9 3HD
                      Scotland                Scotland

Phillip A. Sharp      119 Grasmere Street     119 Grasmere Street
                      Newton, MA  02158       Newton, MA  02158

James W. Stevens      332 East 30th           332 East 30th
                      Street                  Street
                      New York, N.Y.          New York, N.Y.
                      10016                   10016

James L. Vincent      7 Audubon Road          7 Audubon Road
                      Weston, MA  02193       Weston, MA  02193









                                   ARTICLE VII

The effective date of organization of the corporation shall be the date approved
and filed by the Secretary of the Commonwealth. If a later effective date is
desired, specify such date which shall not be more than thirty days after the
date of filing.

The information contained in ARTICLE VIII is NOT a PERMANENT part of the
Articles of Organization and may be changed ONLY by filing the appropriate form
provided therefor.

                                  ARTICLE VIII

a.   The post office address of the corporation in MASSACHUSETTS
is:

     14 Cambridge Center, Cambridge, A  02142



b    The name, residence and post office address (if different)
of the directors and officers of the corporation are as follows:





                                                          POST OFFICE
             NAME                   RESIDENCE               ADDRESS

                                                

President:  James L. Vincent     7 Auburn Road           7 Auburn Road
                                 Weston, MA 02193        Weston, MA 02193

Treasurer:  Brooks Boveroux      42 Chatham Circle       42 Chatham Circle
                                 Wellesley, MA 02181     Wellesley, MA 02181

Clerk:      Frederic A.          221 Mt. Auburn St.      221 Mt. Auburn St.
            Eustis, III          Apartment 111           Apartment 111
                                 Cambridge, MA 02138     Cambridge, MA 02138

Directors:  (See Page 8(a)
            attached)








c.   The fiscal year (i.e. tax year) of the corporation shall end in the last
day of the month of:  December

d.    The name and BUSINESS address of the RESIDENT AGENT of the corporation,
if any, is:  N/A









                                   ARTICLE IX


     By-laws of the corporation have been duly adopted and the president,
treasurer, clerk and directors whose names are set forth above, have been duly
elected.



IN WITNESS WHEREOF and under the pains and penalties of perjury, I whose
signature appear below as incorporator and whose names and business address(es)
ARE CLEARLY TYPED OR PRINTED beneath each signature do hereby associate with the
intention of forming this corporation under the provisions of General Laws
Chapter 156B and do hereby sign these Articles of Organization as incorporated
this 29th day of June, 1988.


- --------------------------------------------------------------------------------


F. Augusta Crease, Legal Assistant


Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA  02111





NOTE:     If an already-existing corporation is acting as incorporator,
          type in the exact name of the corporation, the state or other
          jurisdiction where it was incorporated, the name of the person
          signing on behalf of said corporation and the title he/she
          holds or other authority by which such action is taken.









                        THE COMMONWEALTH OF MASSACHUSETTS


                            ARTICLES OF ORGANIZATION


                     GENERAL LAWS, CHAPTER 156 B, SECTION 12





     I hereby certify that, upon an examination of these articles of
organization, duly submitted to me, it appears that the provisions of the
General Laws relative to the organization of corporation have been complied
with, and I hereby approve said articles; and the filing fee in the amount of
$150.00 having been paid, said articles are deemed to have been filed with me
this 29th day of June, 1988.

Effective date





                               MICHAEL J. CONNOLLY


                               Secretary of State





         FILING FEE: 1/20 of 1% of the total amount of the authorized capital
         stock with par value, and one cent a share for all authorized shares
         without par value, but not less than $150 General Laws, Chapter 156B.
         Shares of stock with a par value less than one dollar shall be deemed
         to have par value of one dollar per share.





                PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT





                       F. Augusta Crease, Legal Assistant
                       Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
                       One Financial Center
                       Boston, MA  02111
                       Tel:  (617) 542-6000








                        THE COMMONWEALTH OF MASSACHUSETTS

                                                                   FEDERAL ID.
                                MICHAEL JOSEPH CONNOLLY          NO. 04-3002117
                                  Secretary of State

                                  ONE ASHBURTON PLACE
                                  BOSTON, MASS. 02108              FEDERAL ID.
                                                                 NO. 00-0275985


                               ARTICLES OF MERGER*
                Pursuant to General Laws, Chapter 156B Section 79
       The fee for filing this certificate is prescribed by General Laws,
                            Chapter 156B, Section 114
            Make checks payable to the Commonwealth of Massachusetts.


Merger of                                   Biogen Inc.
                                            Biogen Massachusetts, Inc.

                                                   the constituent corporations

                                    into


                                            Biogen Massachusetts, Inc.


the surviving* corporation organized under the laws of the Commonwealth of
Massachusetts as specified in the agreement referred to in Paragraph 1 below.


     The undersigned officers of each of the constituent corporations certify
under the penalties of perjury as follows:

     1. An agreement of merger* has been duly adopted in compliance with the
requirements of subsections (b) and (c) of General Laws, Chapter 156B, Section
79, and will be kept as provided by subsection (c) thereof. The surviving*
corporation will furnish a copy of said agreement to any of its stockholders, or
to any person who was a stockholder of any constituent corporation, upon written
requires and without charge.

     2. The effective date of the merger* determined pursuant to the agreement
referred to in paragraph 1 shall be September 30, 1988 at 12:00 o'clock
midnight.

     3. (For a merger)

     ** The following amendments to the articles of
        organization of the SURVIVING corporation to be
        effected pursuant to the agreement of merger referred
        to in paragraph 1 are as follows:  That upon the


effective date and time of the merger, Article 1 shall be amended to provide
that the name of the Corporation be changed to Biogen, Inc., and Article 3 shall
be amended to provide that the Corporation is authorized to issue 55,000,000
shares of common stock having a par value of $.01 per share and 20,000,000
shares of preferred stock having a par value of $.01 per share.



     (For a consolidation)


     (a) The purposes of the RESULTING corporation are as follows:



*Delete the in applicable words.

**If there are no provisions state "NONE".



NOTE: If the space provided under article 3 is insufficient, additions shall be
set forth on separate 8 1/2 x 11 inch sheets of paper, leaving a left hand
margin of at least 1 inch for binding. Additions to more than one article may be
continued on a single sheet so long as each article requiring each such addition
is clearly indicated.


     (b) The total number of shares and the par value, if any, of each class of
stock which the resulting corporation is authorized is as follows: N/A



- -------------------------------------------------------------------------------

               WITHOUT PAR VALUE                 WITH PAR VALUE
- -------------------------------------------------------------------------------
 CLASS OF                                                     PAR
   STOCK       NUMBER OF SHARES        NUMBER OF SHARES      VALUE   AMOUNT
- -------------------------------------------------------------------------------
                                                         
 Preferred                                                           $
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
  Common
- -------------------------------------------------------------------------------


     **(c) If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as to each class
thereof and any series now established.

                  N/A

     **(d) Other lawful provisions, if any, for the conduct and regulation of
the business and affairs of the corporation, for its voluntary dissolution, for
restrictions upon the transfer of shares of stock of any class, or for limiting,
defining, or regulating the powers of the corporation, or if its directors or
stockholders, or of any class of stockholders:

                  N/A

     4. (This paragraph 4 may be deleted if the surviving* corporation is
organized under the laws of the state other than Massachusetts.)

The following information shall not for any purpose be treated as a permanent
part of the articles of organization of the surviving* corporation.





     (a)  The post office address of the principal office of the surviving*
          corporation in Massachusetts is:


          14 Cambridge Center, Cambridge, Massachusetts 02142


     (b)  The name, resident and post office address of each of the directors
          and President, Treasurer and Clerk of the surviving* corporation is as
          follows:

*Delete the inapplicable words.
**If there are no provisions state "NONE."

NOTE: If the space provided under article 3 is insufficient, additions shall be
set forth on separate 8-1/2 x 11 inch sheets of paper, leaving a left hand
margin of at least 1 inch for binding. Additions to more than one article may be
continued on a single sheet so long as each article requiring each such addition
is clearly indicated.








- -------------------------------------------------------------------------------

    NAME                  RESIDENCE               POST OFFICE ADDRESS
- --------------------------------------------------------------------------------
                                             
President
James L. Vincent        7 Audubon Road             7 Audubon Road
                        Weston, MA  02193          Weston, MA  02193
- --------------------------------------------------------------------------------
Treasurer
Brooks Boveroux         42 Chatham Circle          42 Chatham Circle
                        Wellesley, MA              Wellesley, MA
                        02181                      02181
- --------------------------------------------------------------------------------
Clerk
Frederic A.             221 Mt. Auburn             221 Mt. Auburn
Eustis, III             Street                     Street
                        Apartment 111              Apartment 111
                        Cambridge, MA 02138        Cambridge, MA
                                                   02138
- --------------------------------------------------------------------------------
Director
Harold W. Buirkle       150 Broad Avenue           150 Broad Avenue
                        Leonia, NJ  07605          Leonia, NJ  07605
- --------------------------------------------------------------------------------
Director
Stuart F. Feiner        830 Cranford Avenue        830 Cranford Avenue
                        Westfield, NJ              Westfield, NJ
- --------------------------------------------------------------------------------
Director
Walter Gilbert          107 Upland Road            107 Upland Road
                        Cambridge, MA              Cambridge, MA
                        02140                      02140
- --------------------------------------------------------------------------------
Director
Jeremy R. Knowles       44 Coolidge Avenue         44 Coolidge Avenue
                        Cambridge, MA              Cambridge, MA
                        02140                      02140
- --------------------------------------------------------------------------------
Director
Roger H. Morley         L'Horizon                  L'Horizon
                        Clos Barnier               Clos Barnier
                        06530, Speracedes,         06530, Speracedes,
                        France                     France
- --------------------------------------------------------------------------------
Director
Kenneth Murray          4 Blackford Hill           4 Blackford Hill
                        View                       View
                        Edinburgh EH9 3HD          Edinburgh EH9 3HD
                        Scotland                   Scotland
- --------------------------------------------------------------------------------
Director
Phillip A. Sharp        119 Grasmere Street        119 Grasmere Street
                        Newton, MA  02158          Newton, MA  02158
- --------------------------------------------------------------------------------
Director
James W. Stevens        332 East  30th             332 East 30th
                        Street                     Street
                        New York, NY  10016        New York, NY  10016
- --------------------------------------------------------------------------------
Director
James L. Vincent        7 Audubon Road             7 Audubon Road
                        Weston, MA  02193          Weston, MA  02193
- --------------------------------------------------------------------------------


     (c) The date adopted on which the fiscal year of the surviving* corporation
ends is: December 31.

     (d) The date fixed in the by-laws for the Annual Meeting of stockholders of
the surviving* corporation: On a date to be determined by the Board of Directors
within six months after the end of each fiscal year, on any day that is not a
Saturday, Sunday or legal holiday.




     5. (This paragraph 5 may be deleted if the surviving* corporation is
organized under the laws of Massachusetts)

                      N/A

     The resulting* surviving* corporation hereby agrees that it may be sued in
the Commonwealth of Massachusetts for any prior obligation of any constituent
foreign corporation qualified under General Laws, Chapter 181, and any
obligations hereafter incurred by the resulting* surviving* corporation,
including the obligation created by General Laws, Chapter 156B, Section 85, so
long as any liability remains outstanding against the corporation in the
Commonwealth of Massachusetts, and it hereby irrevocably appoints the Secretary
of the Commonwealth as its agent to accept service of process in any action for
the enforcement of any such obligation, including taxes, in the same manner as
provided in Chapter 181.



*Delete the inapplicable words.



                         FOR MASSACHUSETTS CORPORATIONS


     The undersigned President* and Clerk** of Biogen Massachusetts, Inc., a
corporation organized under the laws of Massachusetts further state under the
penalties of perjury that the agreement of merger* referred to in paragraph 1
has been duly executed on behalf of such corporation and duly approved in the
manner required by General Laws, Chapter 156B, Sections 79.

                                  s/s   James L. Vincent          , President*
                                     -----------------------------
                                       James L. Vincent



                                  s/s   Frederic A. Eustis, III  , Clerk
                                     ----------------------------
                                       Frederic A. Eustis, III






*Delete the inapplicable words.





             FOR CORPORATIONS ORGANIZED OTHER THAN IN MASSACHUSETTS


     The undersigned President* and Secretary** of Biogen, Inc., a corporation
organized under the laws of Delaware further state under the penalties of
perjury that the agreement of merger* referred to in paragraph 1 has been duly
adopted by such corporation in the manner required by the laws of Delaware.



                                  s/s   James L. Vincent          , President*
                                     -----------------------------
                                       James L. Vincent




                                  s/s    Frederic A. Eustis, III  , Clerk*
                                     -----------------------------
                                       Frederic A. Eustis, III




*Delete the inapplicable words.

*Specify the officer having powers and duties corresponding to those of the
President or Vice President of a Massachusetts corporation organized under
General Laws, Chapter 156B.

**Specify the officer having power and duties corresponding to the Clerk or
Assistant Clerk of such a Massachusetts corporation.






                       282280                        001904


                        THE COMMONWEALTH OF MASSACHUSETTS
                               ARTICLES OF MERGER*
                    (General Laws, Chapter 156B, Section 79)


     I hereby approve the within articles of merger* and, the filing fee in the
amount of $37,350.00 having been paid, said articles are deemed to have been
filed with me this 28th day of September, 1988.

Effective Date:  September 30, 1988
- -----------------------------------



                                                    s/s  MICHAEL JOSEPH CONNOLLY
                                                       ------------------------
                                                         MICHAEL JOSEPH CONNOLLY
                                                           Secretary of State





                         TO BE FILLED IN BY CORPORATION
                   Photocopy of Articles of Merger To Be Sent


                            TO:                                          SEAL
                            F. Augusta Crease, Legal Assistant
                            Mintz, Levin, Cohn, Ferris, Glovsky
                              and Popeo, P.C.
                            One Financial Center
                            Boston, MA  02111
                            Telephone:  (617)  542-6000





*Delete the inapplicable words.





CD 78 5m-10/85                                                      081-$200.00

                                                         FEDERAL IDENTIFICATION
                       THE COMMONWEALTH OF MASSACHUSETTS        NO. 04-2712513

                             MICHAEL JOSEPH CONNOLLY
                               Secretary of State
                               ONE ASHBURTON PLACE
                               BOSTON, MASS. 02108                  FEDERAL ID.
                                                                 NO. 04-3002117
                                                                    Biogen Inc.


                               ARTICLES OF MERGER*
                Pursuant to General Laws, Chapter 156B Section 78
       The fee for filing this certificate is prescribed by General Laws,
                           Chapter 156B, Section 114
            Make checks payable to the Commonwealth of Massachusetts.


Merger* of                      BIOGEN RESEARCH CORP.
                                BIOGEN, INC.
                                                    the constituent corporations


into
                                BIOGEN, INC.,

the surviving* corporation.


     The undersigned officers of each of the constituent corporations certify
under the penalties of perjury as follows:

     1. An agreement of merger* has been duly adopted in compliance with the
requirements of subsections (b) and (c) of General Laws, Chapter 156B, Section
78, and will be kept as provided by subsection (d) thereof. The surviving*
corporation will furnish a copy of said agreement to any of its stockholders, or
to any person who was a stockholder of any constituent corporation, upon written
request and without charge.


 *Delete the inapplicable words.


     2. The effective date of the merger* determined pursuant to the agreement
referred to in paragraph 1 shall be December 31, 1988.

     3. (For a merger)

     ** The following amendments to the articles of organization of the
        SURVIVING corporation to be effected pursuant to the agreement of
        merger referred to in paragraph 1 are as follows: None


     (For a consolidation)  N/A



     (a) The purposes of the RESULTING corporation are as follows:

     (b) The total number of shares and the par value, if any, of each class of
stock which the resulting corporation is authorized is as follows:



- --------------------------------------------------------------------------------

               WITHOUT PAR VALUE                 WITH PAR VALUE
- --------------------------------------------------------------------------------
 CLASS OF                                                     PAR
  STOCK        NUMBER OF SHARES        NUMBER OF SHARES      VALUE   AMOUNT
- -------------------------------------------------------------------------------
                                                         
 Preferred                                                           $
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
  Common
- -------------------------------------------------------------------------------



 *Delete the inapplicable words.

**If there are no provisions state "NONE".

NOTE: If the space provided under article 3 is insufficient, additions shall be
set forth on separate 8 1/2 x 11 inch sheets of paper, leaving a left hand
margin of at least 1 inch for binding. Additions to more than one article may be
continued on a single sheet so long as each article requiring each such addition
is clearly indicated.








     **(c) If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as to each class
thereof and any series now established.

     **(d) Other lawful provisions, if any, for the conduct and regulation of
the business and affairs of the corporation, for its voluntary dissolution, for
restrictions upon the transfer of shares of stock of any class, or for limiting,
defining, or regulating the powers of the corporation, or of its directors or
stockholders, or of any class of stockholders:

     4. The following information shall not for any purpose be treated as a
permanent part of the articles of organization of the surviving* corporation.


     (a)  The post office address of the principal office of the surviving*
          corporation in Massachusetts is:

          14 Cambridge Center, Cambridge, Massachusetts 02142

     (b)  The name, resident and post office address of each of the directors
and President, Treasurer and Clerk of the surviving* corporation is as follows:


*Delete the inapplicable words.
**If there are no provisions state "NONE."

NOTE: If the space provided under article 3 is insufficient, additions shall be
set forth on separate 8-1/2 x 11 inch sheets of paper, leaving a left hand
margin of at least 1 inch for binding. Additions to more than one article may be
continued on a single sheet so long as each article requiring each such addition
is clearly indicated.




================================================================================
     NAME                     RESIDENCE                  POST OFFICE ADDRESS
- --------------------------------------------------------------------------------
President
James L. Vincent         7 Audubon Road                   7 Audubon Road
                         Weston, MA  02193                Weston, MA 02193
- --------------------------------------------------------------------------------
Treasurer
John W. Catterall        70 South Terrace                 70 South Terrace
                         Short Hill, NJ  07078            Short Hill, NJ 07078
- --------------------------------------------------------------------------------
Clerk
Frederic A. Eustis, III  221 Mt. Auburn Street            221 Mt. Auburn Street
                         Cambridge, MA 02138              Cambridge, MA 02138
- --------------------------------------------------------------------------------
Director
BUIRKLE, Harold W. Mr.   THE HENLEY GROUP                 150 Broad Avenue
                         375 Park Avenue                  Leonia, NJ 07605
                         New York, NY  10152
- --------------------------------------------------------------------------------
Director
FEINER, Stuart F. Mr.    President                        830 Cranford  Avenue
                         INCO Venture Capital             Westfield, NJ
                         Mgmnt.
                         One New York Plaza
                         New York, NY  10004
- --------------------------------------------------------------------------------
Director
GILBERT, Walter          Biological                       DELIVER PACKAGES
Prof.                    Laboratories                     TO HOME ADDRESS
                         HARVARD UNIVERSITY               107 Upland Road
                         16 Divinity Avenue               Cambridge, MA  02138
                         Cambridge, MA  02138
- --------------------------------------------------------------------------------
Director
KNOWLES, Jeremy R.       Department of                    44 Coolidge Avenue
Prof.                    Chemistry                        Cambridge, MA 02138
                         Hallinckrodt Hall,
                         Room 202
                         HARVARD UNIVERSITY
                         12 Oxford Street
                         Cambridge, MA  02138
- --------------------------------------------------------------------------------
Director
MORLEY, Roger H. Mr.     Vice President,                  L'Horizon
                         Schiller                         Clos Barnier
                         International                    06530, Speracedes,
                         University                       FRANCE
- --------------------------------------------------------------------------------
Director
MURRAY, Kenneth Prof.    Dept. of Molecular               4 Blackford Hill View
                         Biology                          Edinburgh EH9 3HD
                         UNIVERSITY OF                    Scotland
                         EDINBURGH
                         King's Buildings
                         Mayfield Road
                         Edinburgh EE9 3JR
                         SCOTLAND
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Director
SHARP, Phillip A. Prof.  Center for Cancer                119 Grasmere Street
                         Research                         Newton, MA 02158
                         MIT
                         40 Ames Street, E17-
                         529B
                         Cambridge, MA  02139
- --------------------------------------------------------------------------------
Director
STEVENS, James V. Mr.    Executive Vice                   332 East 30th Street
                         President                        New York, NY 10016
                         PRUDENTIAL INVESTMENT
                         CORP.
                         4 Gateway Center
                         Newark, NJ  07102-4007
- --------------------------------------------------------------------------------
Director
VINCENT, James L. Mr.    Chairman                         7 Audubon Road
                         Chief Operating                  Weston, MA 02193
                         Officer
                         BIOGEN INC.
                         14 Cambridge Center
                         Cambridge, MA  02142
================================================================================
      (c)  The date adopted on which the fiscal year of the
surviving* corporation ends is:  December 31.


      (d)  The date fixed in the by-laws for the Annual Meeting of
stockholders of the surviving* corporation is: as determined by
the Board of Directors.

     The undersigned officers of the several constituent corporations listed
above further state under the penalties of perjury as to their respective
corporations that the agreement of merger* referred to in paragraph 1 has been
duly executed on behalf of such corporation and duly approved by the
stockholders of such corporation in the manner required by General Laws, Chapter
156B, Section 78.


                                  s/s                          , Vice President*
                                  -----------------------------
                                        Brooks Boveroux


                                  s/s                                   , Clerk*
                                  --------------------------------------
                                        Frederick A. Eustis, III

 of BIOGEN, RESEARCH CORP.   (name of constituent corporation)
    ----------------------

                                  s/s                          , Vice President*
                                  -----------------------------
                                        Brooks Boveroux


                                  s/s                                   , Clerk*
                                  --------------------------------------
                                        Frederick A. Eustis, III

 of BIOGEN, INC.   (name of constituent corporation)
    ------------

*Delete the inapplicable words.




                    288556                        002080

Received              THE COMMONWEALTH OF MASSACHUSETTS
Dec. 16, 1988                 ARTICLES OF MERGER*
Secretary of State
Corporation Division
                    (General Laws, Chapter 156B, Section 78)


     I hereby approve the within articles of consolidation* merger* and, the
filing fee in the amount of $200.00 having been paid, said articles are deemed
to have been filed with me this 16th day of December, 1988.

Effective Date:  December 31, 1988
- ----------------------------------


                                                s/s   Michael Joseph Connolly
                                                    ----------------------------
                                                      MICHAEL JOSEPH CONNOLLY
                                                         Secretary of State





                         TO BE FILLED IN BY CORPORATION
                   Photocopy of Articles of Merger To Be Sent

                                                                            SEAL
                                TO: Molly Mille
                                    Biogen. Inc.
                                    14 Cambridge Center
                                    Cambridge, MA 02142
                                Telephone (617) 864-8900



*Delete the inapplicable words.





CD 82 10M-10/80 D630976
                                                          FEDERAL IDENTIFICATION
                                                                NO. 04-3002117


                        THE COMMONWEALTH OF MASSACHUSETTS


                             WILLIAM FRANCIS GALVIN
                               Secretary of State
                              ONE ASHBURTON PLACE,
                        BOSTON, MASSACHUSETTS 02108-1512



                                   ARTICLES OF
                  MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
               PURSUANT TO GENERAL LAWS, CHAPTER 156B, SECTION 72


   The fee for filing this certificate is prescribed by General Laws,
Chapter 156B, Section 114.
           Make check payable to the Commonwealth of Massachusetts.


                              *     *     *     *


     We, Kenneth M. Bate and Daniel A. Cuoco Vice President* and Clerk* of
Biogen, Inc. organized under the laws of the Commonwealth of Massachusetts and
herein called the parent corporation, do hereby certify as follows:

     1.   That the subsidiary corporation(s) to be merged into the parent
corporations is as follows:

                                        State of                 Date of
           Name                         Organization             Organization

Biogen Medical Products, Inc.           Massachusetts            7/29/83


     2.   That the parent corporation owns at least ninety percent of the
outstanding shares of each class of the stock of each subsidiary corporation to
be merged into the parent corporation.




















*  Delete the inapplicable words.  In case the parent corporation is organized
under the laws of a state other than Massachusetts these articles are to be
signed by officers having corresponding powers and other duties.



     4.   That a meeting of the directors of the parent corporation the
following vote, pursuant to subsection (a) of General Laws, Chapter 156B,
Section 82, was duly adopted:

(See Page 4A and Page 4B attached hereto and made a part hereof.)
     -------     -------






NOTE: Votes for which the space provided above is not sufficient should be set
out on continuations sheets to be numbered 2A, 2B, etc. Continuation sheets must
have a left-hand margin 1 inch wide for finding. Only one side should be used.







                                     PAGE 4A

                                  Biogen, Inc.
            Articles of Merger of Parent and Subsidiary Corporations
- --------------------------------------------------------------------------


 VOTED:   To authorize and direct the merger of Biogen Medical Products, Inc.,
 ------   a Massachusetts corporation and a wholly-owned subsidiary of this
          corporation (the "terminating corporation"), into this corporation
          (sometimes referred to as the surviving corporation"), pursuant to
          Chapter 156B Section 82, of the Massachusetts General Laws.

VOTED:    That the effective date of the merger shall be the date of filing with
- ------    and acceptance by the Secretary of State of the Commonwealth of
          Massachusetts of "Articles of Merger of Parent and Subsidiary
          Corporations" relative to the within merger.

VOTED:    The authorize the President and any Vice President and the Clerk or
- ------    any Assistant Clerk of this corporation, by and on behalf of this
          corporation, to execute and deliver said "Articles of Merger of Parent
          and Subsidiary Corporations" to the Secretary of State of the
          Commonwealth of Massachusetts in substantially the form attached
          hereto and made a part hereof as EXHIBIT A.

VOTED:    That, pursuant to the provisions of the Business Corporation Law of
- ------    the Commonwealth of Massachusetts, the separate existence of the
          terminating corporation shall cease upon the effective date of the
          merger and that this corporation shall continue its existence as the
          surviving corporation.

VOTED:    That this corporation shall, upon the effective date of the merger,
- ------    succeed to and be liable for all of the rights and obligations of
          the terminating corporation including, without limitation, the
          terminating corporation's general partnership interest in Biogen
          Medical Products Limited Partnership.

VOTED:    That the Articles of Organization, as amended, of this corporation as
- ------    in effect upon the date of the merger shall continue to be the
          Articles of Organization of the surviving corporation until amended
          or changed in accordance with the applicable provisions of the
          Business Corporation Law of the Commonwealth of Massachusetts.



                                     Page 4B
                                     -------

                                  Biogen, Inc.
            Articles of Merger of Parent and Subsidiary Corporations
            --------------------------------------------------------

VOTED:    That the By-Laws, as amended, of this corporation as in effect upon
- ------    the date of the merger shall continue to be the By-Laws of the
          surviving corporation and shall continue in full force and effect
          until changed, altered or amended as therein provided and in the
          manner as prescribed by the Business Corporation Law of the
          Commonwealth of Massachusetts.

VOTED:    That the officers and Directors of this corporation holding office on
- ------    the date of merger shall continue to be the officers and Directors of
          the surviving corporation, all of whom shall hold their offices and
          directorships until the election and qualification of their respective
          successors or until their tenure is otherwise terminated in accordance
          with the By-Laws of the surviving corporation.

VOTED:    That all of the issued and outstanding capital stock of the
- ------    terminating corporation shall be surrendered and cancelled as of the
          effective date of the merger and the issued and outstanding capital
          stock of the surviving corporation shall not be converted in any
          manner.

VOTED:    That the Directors and any and all officers of this corporation are
- ------    hereby authorized, empowered and directed to do any and all acts and
          things and to make, execute, deliver, file and/or record any and all
          instruments, papers and documents which shall be or become necessary,
          proper or convenient in order to carry into effect the full intention
          of the merger provided for herein, including, but not limited to, the
          "Articles of Merger of Parent and Subsidiary Corporations" described
          hereinabove.




     5.   The effective date of the merger as specified in the vote set out
under Paragraph 4 is upon filing and acceptance by the office of the Secretary
of the Commonwealth of Massachusetts.



     IN WITNESS WHEREOF and under the penalties of perjury we have hereto signed
out names this 9th day of June, 1993.

                                       s/s                       Vice President*
                                       --------------------------
                                             Kenneth M. Bate

                                       s/s                                Clerk*
                                       -----------------------------------
                                             Daniel A. Cuoco







*   Delete the inapplicable words. In case the parent corporation is organized
under the laws of a state other than Massachusetts these articles are to be
signed by officers having corresponding powers and duties.





                                                                            6381

                                                                          432481


                          COMMONWEALTH OF MASSACHUSETTS

               ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS

                    (General Laws, Chapter 156B, Section 82)

     I hereby approve the within articles of merger of parent and subsidiary
corporation, and the filing fee in the amount of $250.00 having been paid, said
articles are deemed to have been filed with me this 9th day of June, 1993.

                                                    s/s Michael Joseph Connolly
                                                         Michael Joseph Connolly
                                                          Secretary of State





                         TO BE FILLED IN BY CORPORATION
                         Photo Copy of Merger To Be Sent
                                                                            SEAL
                         TO: Elisabeth Sottile Lewin, L.A.
                             Mintz, Levin, Cohn, Ferris, Glovsky
                             and Popeo, P.C.
                             One Financial Center
                             Boston, MA 02111
                         Telephone: (617) 542-6000






                                                          FEDERAL IDENTIFICATION
                                                          NO. 04-3002117
                                                          --------------

                        THE COMMONWEALTH OF MASSACHUSETTS

                             William Francis Galvin
                          Secretary of the Commonwealth
              One Ashburton Place, Boston, Massachusetts 02108-1512

                              ARTICLES OF AMENDMENT
                    (General Laws, Chapter 156B, Section 72)

We,                   Michael J. Astrue                  , *Vice President,
   ------------------------------------------------------
and                   Michael J. Astrue                  , *Clerk
   ------------------------------------------------------
of                    Biogen, Inc.                       ,
   ------------------------------------------------------
                  (Exact name of corporation)

located at 14 Cambridge Center, Cambridge, Massachusetts 02142,

                  (Street address of corporation in Massachusetts)

     certify that these Articles of Amendment affecting article numbered: Three
                                                                         -------

     (Number those articles 1, 2, 3, 4, 5 and/or 6 being amended) of the

Articles of Organization were duly adopted at a meeting held on  May 31,  1996,
                                                               --------     --
by vote of:

28,797,384 shares of Common Stock of 35,676,575 shares outstanding,
- ----------           ------------    ----------
         (type, class & series, if any)

              shares of               of               shares outstanding, and
- -------------          --------------    -------------
         (type, class & series, if any)


              shares of               of               shares outstanding.
- -------------          --------------     -------------
          (type, class & series, if any)

l**being at least a majority of each type, class or series outstanding and
entitled to vote thereon.

*Delete the inapplicable words.        **Delete the inapplicable clause.
1   For amendments adopted pursuant to Chapter 156B, Section 70.
2   For amendments adopted pursuant to Chapter 156B, Section 71.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on one side only of separate 8 1/2 x
11 sheets of paper with a left margin of at least 1 inch. Additions to more than
one article may be made on a single sheet so long as each article requiring each
addition is clearly indicated.





     To change the number of shares and the par value (if any) of any type,
     class or series of stock which the corporation is authorized to issue,
     fill in the following:

     The total presently authorized is:



================================================================================
       WITHOUT PAR VALUE STOCKS                WITH PAR VALUE STOCKS
- --------------------------------------------------------------------------------
   TYPE      NUMBER OF SHARES      TYPE       NUMBER OF SHARES        PAR VALUE
- --------------------------------------------------------------------------------
  Common:                         Common:        55,000,000             $.01
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Preferred:                      Preferred:       20,000,000*            $.01
- --------------------------------------------------------------------------------

================================================================================


     *400,000 shares Series A Junior Participating Preferred Stock and 2,760,000
     shares $2.125 Convertible Exchangeable Preferred Stock


     Change the total authorized to:

================================================================================
       WITHOUT PAR VALUE STOCKS                WITH PAR VALUE STOCKS
- --------------------------------------------------------------------------------
   TYPE      NUMBER OF SHARES      TYPE       NUMBER OF SHARES        PAR VALUE
- --------------------------------------------------------------------------------
  Common:                         Common:        110,000,000            $.01
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Preferred:                      Preferred:        20,000,000*           $.01
- --------------------------------------------------------------------------------

================================================================================


     *400,000 shares Series A Junior Participating Preferred Stock and 2,760,000
     shares $2.125 Convertible Exchangeable Preferred Stock









The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.

Later effective date:                        N/A                          .
                      ----------------------------------------------------

SIGNED UNDER THE PENALTIES OF PERJURY, this 5TH day of NOVEMBER, 1996.

                        s/s                                  , *Vice President
                           ----------------------------------
                                  Michael J. Astrue

                        s/s                                            , *Clerk
                           --------------------------------------------
                                  Michael J. Astrue

*Delete the inapplicable words.





                        THE COMMONWEALTH OF MASSACHUSETTS

                              ARTICLES OF AMENDMENT
                    (General Laws, Chapter 156B, Section 72)

                ================================================

            I hereby approve the within Articles of Amendment and, the filing
            fee in the amount of $    having been paid, said articles are deemed
            to have been filed with me this     day of                , 19  .
                                            ---        --------------     --

            Effective date:
                           ------------------------------------------------



                             WILLIAM FRANCIS GALVIN
                         Secretary of the Commonwealth







                         TO BE FILLED IN BY CORPORATION
                      Photocopy of document to be sent to:

                              Anne Marie Cook, Esquire
                              Esquire Biogen, Inc.
                              14 Cambridge Center
                              Cambridge, MA 02142


                                                          FEDERAL IDENTIFICATION
                                                                  No. 04-3002117



                        THE COMMONWEALTH OF MASSACHUSETTS
                             William Francis Galvin
                          Secretary of the Commonwealth
              One Ashburton Place, Boston, Massachusetts 02108-1512


                        Certificate of Vote of Directors
                    ESTABLISHING A CLASS OR SERIES OF STOCK
                    (GENERAL LAWS, CHAPTER 156B, SECTION 26)


     We, Michael Astrue, Vice President and Clerk of Biogen, Inc. located at 4
Cambridge Center, Cambridge, MA 02142 certify that at a meeting of the directors
of the corporation on April 16, 1999 the following vote establishing and
designating a class or series of stock and determining the relative rights and
preferences thereof are duly adopted: See Exhibit A.



                                   EXHIBIT A


                           CERTIFICATE OF ELIMINATION

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of
                                  BIOGEN, INC.

                                       and

               CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS

                                       of

                 SERIES A-1 JUNIOR PARTICIPATING PREFERRED STOCK

                                       of
                                  BIOGEN, INC.

         Biogen, Inc., a corporation organized and existing under the Business
Corporation Law of the Commonwealth of Massachusetts (hereinafter called the
"Company"),

         DOES HEREBY CERTIFY THAT:

         1. The voting powers, designations, preferences, and the relative,
participating, optional, or other rights, and the qualifications, limitations,
and restrictions of the Series A Junior Participating Preferred Stock of the
Company (the "Old Series A") were provided for in resolutions adopted by the
Board of Directors of the Company (the "Board of Directors") dated May 8, 1989.
A certificate setting forth such resolutions has been heretofore filed with the
Secretary of State of the Commonwealth of Massachusetts pursuant to the
provisions of Section 26 of the Business Corporation Law of the Commonwealth of
Massachusetts.

         2. No shares of the Old Series A have ever been issued.

         3. This Certificate is being filed to eliminate the Old Series A and
replace it with the Series A-1 Junior Participating Preferred Stock of the
Company as set forth below.

         4. Pursuant to authority conferred upon the Board of Directors of the
Company by the Articles of Organization of the Company, and pursuant to the
provisions of Section 26 of the Business Corporation Law, the Board of
Directors, at a meeting of its members held on April 16, 1999, adopted votes
providing for the elimination of the Old Series A, which votes are as follows:

VOTED:   That none of the authorized shares of the original Series A Junior
         Participating Preferred Stock of the Company are outstanding and none
         of such shares will be issued and that the officers of the Company be,
         and each hereby is, authorized and


                                       1

         directed to file a Certificate of Vote of Directors Establishing a
         Class or Series of Stock providing for the elimination of such Series A
         Junior Participating Preferred Stock setting forth the text of this
         vote with the Secretary of State of the Commonwealth of Massachusetts
         for the purpose of eliminating from the Articles of Organization of the
         Company the original Series A Junior Participating Preferred Stock of
         the Company.

VOTED:   That the proper officers of the Company be, and each of them hereby is,
         authorized, in the name and on behalf of the Company, to take all such
         actions and to execute all such documents as they may deem necessary or
         appropriate in connection with the elimination of the original Series A
         Junior Participating Preferred Stock.

         5. That, pursuant to authority conferred upon the Board of Directors by
the Articles of Organization of this Company, and pursuant to the provisions of
Section 26 of the Business Corporation Law, the Board of Directors, at a meeting
of its members held on April 16, 1999, adopted a vote providing for the
designations, preferences and relative, participating, optional or other rights,
and the qualifications, limitations or restrictions thereof, of two hundred
fifty thousand (250,000) shares of the Company's Preferred Stock, par value one
cent ($.01) per share, which vote is as follows:

VOTED:   That pursuant to the authority granted to and vested in the Board of
         Directors of the Company in accordance with the provisions of its
         Articles of Organization, the Board of Directors of the Company hereby
         creates a new series of Preferred Stock, par value $.01 per share, of
         the Company and hereby fixes the designation and number of shares, and
         the relative rights, preferences and limitations thereof (in addition
         to the provisions set forth in the Articles of Organization of the
         Company which are applicable to the Preferred Stock of all classes and
         series), as follows.

Series A-1 Junior Participating Preferred Stock. The preferences, privileges and
restrictions granted to or imposed on the Company's Series A-1 Junior
Participating Preferred Stock, par value $.01 per share, or the holders thereof,
are as follows:

         Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A-1 Junior Participating Preferred Stock" (the "Series A-1
Preferred Stock") and the number of shares constituting the Series A-1 Preferred
Stock shall be two hundred fifty thousand (250,000). Such number of shares may
be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series A-1 Preferred Stock
to a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Series A-1 Preferred Stock.

         Section 2. Dividends and Distributions.

                  (A) Subject to the rights of the holders of any shares of any
         series of Preferred Stock (or any similar stock) ranking prior and
         superior to the Series A-1 Preferred Stock


                                       2

         with respect to dividends, the holders of shares of Series A-1
         Preferred Stock, in preference to the holders of Common Stock, $.01 par
         value (the "Common Stock"), of the Company, and of any other junior
         stock, shall be entitled to receive, when, as and if declared by the
         Board of Directors out of funds legally available for the purpose,
         quarterly dividends payable in cash on the first day of March, June,
         September and December in each year (each such date being referred to
         herein as a "Quarterly Dividend Payment Date"), commencing on the first
         Quarterly Dividend Payment Date after the first issuance of a share or
         fraction of a share of Series A-1 Preferred Stock, in an amount per
         share (rounded to the nearest cent) equal to the greater of (a) $1 or
         (b) subject to the provision for adjustment hereinafter set forth, 1000
         times the aggregate per share amount of all cash dividends, and 1000
         times the aggregate per share amount (payable in kind) of all non-cash
         dividends or other distributions, other than a dividend payable in
         shares of Common Stock or a subdivision of the outstanding shares of
         Common Stock (by reclassification or otherwise), declared on the Common
         Stock since the immediately preceding Quarterly Dividend Payment Date
         or, with respect to the first Quarterly Dividend Payment Date, since
         the first issuance of any share or fraction of a share of Series A-1
         Preferred Stock. In the event the Company shall at any time declare or
         pay any dividend on the Common Stock payable in shares of Common Stock,
         or effect a subdivision or combination or consolidation of the
         outstanding shares of Common Stock (by reclassification or otherwise
         than by payment of a dividend in shares of Common Stock) into a greater
         or lesser number of shares of Common Stock, then in each such case the
         amount to which holders of shares of Series A-1 Preferred Stock were
         entitled immediately prior to such event under clause (b) of the
         preceding sentence shall be adjusted by multiplying such amount by a
         fraction, the numerator of which is the number of shares of Common
         Stock outstanding immediately after such event and the denominator of
         which is the number of shares of Common Stock that were outstanding
         immediately prior to such event.

                  (B) The Company shall declare a dividend or distribution on
         the Series A-1 Preferred Stock as provided in paragraph (A) of this
         Section immediately after it declares a dividend or distribution on the
         Common Stock (other than a dividend payable in shares of Common Stock);
         provided that, in the event no dividend or distribution shall have been
         declared on the Common Stock during the period between any Quarterly
         Dividend Payment Date and the next subsequent Quarterly Dividend
         Payment Date, a dividend of $1 per share on the Series A-1 Preferred
         Stock shall nevertheless be payable on such subsequent Quarterly
         Dividend Payment Date.

                  (C) Dividends shall begin to accrue and be cumulative on
         outstanding shares of Series A-1 Preferred Stock from the Quarterly
         Dividend Payment Date next preceding the date of issue of such shares,
         unless the date of issue of such shares is prior to the record date for
         the first Quarterly Dividend Payment Date, in which case dividends on
         such shares shall begin to accrue from the date of issue of such
         shares, or unless the date of issue is a Quarterly Dividend Payment
         Date or is a date after the record date for the determination of
         holders of shares of Series A-1 Preferred Stock entitled to receive a
         quarterly dividend and before such Quarterly Dividend Payment Date, in
         either of which events such dividends shall begin to accrue and be
         cumulative from such Quarterly Dividend Payment Date. Accrued but
         unpaid dividends shall not bear interest.



                                       3

         Dividends paid on the shares of Series A-1 Preferred Stock in an amount
         less than the total amount of such dividends at the time accrued and
         payable on such shares shall be allocated pro rata on a share-by-share
         basis among all such shares at the time outstanding. The Board of
         Directors may fix a record date for the determination of holders of
         shares of Series A-1 Preferred Stock entitled to receive payment of a
         dividend or distribution declared thereon, which record date shall be
         not more than 60 days prior to the date fixed for the payment thereof.

         Section 3. Voting Rights. The holders of shares of Series A-1 Preferred
Stock shall have the following voting rights:

                  (A) Subject to the provision for adjustment hereinafter set
         forth, each share of Series A-1 Preferred Stock shall entitle the
         holder thereof to 1000 votes on all matters submitted to a vote of the
         stockholders of the Company. In the event the Company shall at any time
         declare or pay any dividend on the Common Stock payable in shares of
         Common Stock, or effect a subdivision or combination or consolidation
         of the outstanding shares of Common Stock (by reclassification or
         otherwise than by payment of a dividend in shares of Common Stock) into
         a greater or lesser number of shares of Common Stock, then in each such
         case the number of votes per share to which holders of shares of Series
         A-1 Preferred Stock were entitled immediately prior to such event shall
         be adjusted by multiplying such number by a fraction, the numerator of
         which is the number of shares of Common Stock outstanding immediately
         after such event and the denominator of which is the number of shares
         of Common Stock that were outstanding immediately prior to such event.

                  (B) Except as otherwise provided herein, in any other
         Certificate of Designation creating a series of Preferred Stock or any
         similar stock, or by law, the holders of shares of Series A-1 Preferred
         Stock and the holders of shares of Common Stock and any other capital
         stock of the Company having general voting rights shall vote together
         as one class on all matters submitted to a vote of stockholders of the
         Company.

                  (C) Except as set forth herein, or as otherwise provided by
         law, holders of Series A-1 Preferred Stock shall have no special voting
         rights and their consent shall not be required (except to the extent
         they are entitled to vote with holders of Common Stock as set forth
         herein) for taking any corporate action.

         Section 4. Certain Restrictions.

                  (A) Whenever quarterly dividends or other dividends or
         distributions payable on the Series A-1 Preferred Stock as provided in
         Section 2 are in arrears, thereafter and until all accrued and unpaid
         dividends and distributions, whether or not declared, on shares of
         Series A-1 Preferred Stock outstanding shall have been paid in full,
         the Company shall not:

                  (i) declare or pay dividends, or make any other distributions,
                  on any shares of stock ranking junior (either as to dividends
                  or upon liquidation, dissolution or winding up) to the Series
                  A-1 Preferred Stock;


                                       4

                  (ii) declare or pay dividends, or make any other
                  distributions, on any shares of stock ranking on a parity
                  (either as to dividends or upon liquidation, dissolution or
                  winding up) with the Series A-1 Preferred Stock, except
                  dividends paid ratably on the Series A-1 Preferred Stock and
                  all such parity stock on which dividends are payable or in
                  arrears in proportion to the total amounts to which the
                  holders of all such shares are then entitled;

                  (iii) redeem or purchase or otherwise acquire for
                  consideration shares of any stock ranking junior (either as to
                  dividends or upon liquidation, dissolution or winding up) to
                  the Series A-1 Preferred Stock, provided that the Company may
                  at any time redeem, purchase or otherwise acquire shares of
                  any such junior stock in exchange for shares of any stock of
                  the Company ranking junior (either as to dividends or upon
                  dissolution, liquidation or winding up) to the Series A-1
                  Preferred Stock; or

                  (iv) redeem or purchase or otherwise acquire for consideration
                  any shares of Series A-1 Preferred Stock, or any shares of
                  stock ranking on a parity with the Series A-1 Preferred Stock,
                  except in accordance with a purchase offer made in writing or
                  by publication (as determined by the Board of Directors) to
                  all holders of such shares upon such terms as the Board of
                  Directors, after consideration of the respective annual
                  dividend rates and other relative rights and preferences of
                  the respective series and classes, shall determine in good
                  faith will result in fair and equitable treatment among the
                  respective series or classes.

                  (B) The Company shall not permit any subsidiary of the Company
         to purchase or otherwise acquire for consideration any shares of stock
         of the Company unless the Company could, under paragraph (A) of this
         Section 4, purchase or otherwise acquire such shares at such time and
         in such manner.

         Section 5. Reacquired Shares. Any shares of Series A-1 Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Articles of
Organization, or in any other Certificate of Designation creating a series of
Preferred Stock or any similar stock or as otherwise required by law.

         Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A-1
Preferred Stock unless, prior thereto, the holders of shares of Series A-1
Preferred Stock shall have received $1000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A-1
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1000
times the aggregate amount to be distributed per share to holders of shares of
Common


                                       5

Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A-1
Preferred Stock, except distributions made ratably on the Series A-1 Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series A-1
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

         Section 7. Consolidation, Merger, etc. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A-1 Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Company at any time declares or pays any dividend on the Common
Stock payable in shares of Common Stock, or effects a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A-1 Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

         Section 8. No Redemption. The shares of Series A-1 Preferred Stock
shall not be redeemable.

         Section 9. Rank. The Series A-1 Preferred Stock shall rank junior with
respect to the payment of dividends and the distribution of assets to all other
series of the Company's Preferred Stock.

         Section 10. Amendment. The Articles of Organization of the Company
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A-1 Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A-1 Preferred Stock, voting
together as a single class.


                                       6

         IN WITNESS WHEREOF, Biogen, Inc. has caused this certificate to be
executed by Vice President and General Counsel this 30th day of April, 1999.

                                                      /s/ Michael J. Astrue
                                                      __________________________
                                                      Vice President and General
                                                      Counsel


                                       7







                                                          FEDERAL IDENTIFICATION
                                                                  No. 04-3002117



                        THE COMMONWEALTH OF MASSACHUSETTS
                             William Francis Galvin
                          Secretary of the Commonwealth
              One Ashburton Place, Boston, Massachusetts 02108-1512


                              ARTICLES OF AMENDMENT
                    (GENERAL LAWS, CHAPTER 156B, SECTION 72)


     We, Michael Astrue, Vice President and Clerk of Biogen, Inc. located at 14
Cambridge Center, Cambridge, MA 02142 certify that these Articles of Amendment
affecting articles numbered: 3 of the Articles of Organization were duly adopted
at a meeting held on June 11, 1999, by vote of: 62,563,266 shares of Common of
75,263,543 shares outstanding, being at least a majority of each type, class or
series outstanding and entitled to vote thereon.






     To change the number of shares and the par value (if any) of any type,
class or series of stock which the corporation is authorized to issue, fill in
the following:

                       The total presently authorized is:



- ------------------------------------------------------------------------------------------------------------
          WITHOUT PAR VALUE STOCKS                              WITH PAR VALUE STOCKS
- ------------------------------------------------------------------------------------------------------------
      TYPE             NUMBER OF SHARES           TYPE            NUMBER OF SHARES            PAR VALUE
- ------------------ -------------------------- -------------- --------------------------- --------------------
                                                                                    
     Common:                                     Common:            110,000,000                 $.01
- ------------------ -------------------------- -------------- --------------------------- --------------------

- ------------------ -------------------------- -------------- --------------------------- --------------------
   Preferred:                                   Preferred
- ------------------ -------------------------- -------------- --------------------------- --------------------

- -------------------------------------------------------------------------------------------------------------


                         Change the total authorized to:



- --------------------------------------------- ---------------------------------------------------------------
          WITHOUT PAR VALUE STOCKS                              WITH PAR VALUE STOCKS
- ------------------ -------------------------- -------------- --------------------------- --------------------
      TYPE             NUMBER OF SHARES           TYPE            NUMBER OF SHARES            PAR VALUE
- ------------------ -------------------------- -------------- --------------------------- --------------------
                                                                                    
     Common:                                     Common:            375,000,000                 $.01
- ------------------ -------------------------- -------------- --------------------------- --------------------

- ------------------ -------------------------- -------------- --------------------------- --------------------
   Preferred:                                   Preferred
- -------------------------------------------------------------------------------------------------------------







                                                         FEDERAL IDENTIFICATION
                                                         NO. 04-3002117
                                                            -------------------



                             THE COMMONWEALTH OF MASSACHUSETTS
- --------------
EXAMINER                           WILLIAM FRANCIS GALVIN
                               Secretary of the Commonwealth
                   One Ashburton Place, Boston, Massachusetts 02108-1512


                                  CERTIFICATE OF CORRECTION
                          (GENERAL LAWS, CHAPTER 156B, SECTION 6A)



             1. Exact name of corporation:
               Biogen, Inc.
             2. Document to be corrected:
               Articles of Amendment
             3. The above mentioned document was filed with the Secretary of
                the Commonwealth on June 11,         1999.
                                   ----------------, -----

             4. Please state the inaccuracy or defect in said document:

               The number of the authorized Preferred Stock was inadvertently
               omitted from both the "Presently Authorized" and "Change"
               Sections on page two - authorized stock.







             5. Please state corrected version of the document:

                See attached Sheet







             NOTE: THIS CORRECTION SHOULD BE SIGNED BY THE PERSON(S) REQUIRED
             BY LAW TO SIGN THE ORIGINAL DOCUMENT.


             SIGNED UNDER THE PENALTIES OF PERJURY, this 28th   day of January,
                                                        -------      ----------
             2003,
             -----


             /s/    Thomas J. Bucknum                           *Vice President
             --------------------------------------------------,



             /s/    Anne Marie Cook                  *Assistant Clerk
             ---------------------------------------,


              * DELETE THE INAPPLICABLE WORDS.
              NOTE: IF THE INACCURACY OR DEFECT TO BE CORRECTED IS NOT APPARENT
              ON THE FACE OF THE DOCUMENT, MINUTES OF THE MEETING SUBSTANTIATING
              THE ERROR MUST BE FILED WITH THE CERTIFICATE. ADDITIONAL
              INFORMATION MAY BE PROVIDED ON SEPARATE 8 1/2 X 11 SHEETS OF
              WHITE PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH.




To change the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:

The total presently authorized is:

_______________________________________________________________________________
WITHOUT PAR VALUE STOCKS                    WITH PAR VALUE STOCKS
________________________________________________________________________________
TYPE        NUMBER OF SHARES            TYPE     NUMBER OF SHARES   PAR VALUE
________________________________________________________________________________

Common:                                 Common:   110,000,000          $.01
________________________________________________________________________________

________________________________________________________________________________

Preferred:                              Preferred:  20,000,000*        $.01
________________________________________________________________________________

________________________________________________________________________________


Change the total authorized to:

_______________________________________________________________________________
WITHOUT PAR VALUE STOCKS                    WITH PAR VALUE STOCKS
________________________________________________________________________________
TYPE        NUMBER OF SHARES             TYPE     NUMBER OF SHARES   PAR VALUE
________________________________________________________________________________

Common:                                  Common:   375,000,000         $.01
________________________________________________________________________________

________________________________________________________________________________

Preferred:                               Preferred: 20,000,000*        $.01
________________________________________________________________________________

________________________________________________________________________________

*of which 250,000 Shares are designated Series A-1 Junior Participating
Preferred Stock and 2,760,000 Shares are designated $2.125 Convertible
Exchangeable Preferred Stock.

EX-10.20

                                                                   EXHIBIT 10.20

                                  BIOGEN, INC.
                        1982 INCENTIVE STOCK OPTION PLAN
       (AS AMENDED THROUGH DECEMBER 13, 2002, EFFECTIVE DECEMBER 31, 2002)

I. DEFINITIONS AND PURPOSE

      A. Definitions: References in this document to the "Company" are to
Biogen, Inc., a Massachusetts corporation; reference to the "Plan" are to the
Biogen, Inc. 1982 Incentive Stock Option Plan; references to the "Code" are to
the United States Internal Revenue Code of 1986, as amended. Unless otherwise
specified or unless the context otherwise requires, the following terms, as used
in the Plan, have the following meanings:

      1. "Affiliate" means a corporation which, for purposes of Section 422 of
the Code, is a parent or subsidiary of the Company, direct or indirect.

      2. "Disability" means permanent and total disability as defined in Section
105(d)(4) of the Code.

      3. "Key Employee" means an employee of the Company or of an Affiliate
(including, without limitation, an employee who is also serving as an officer of
the Company or of an Affiliate), designated by the Committee to be eligible to
be granted one or more Options under the Plan.

      4. "Option" means a right or option granted under the Plan.

      5. "Participant" means a Key Employee to whom one or more Options are
granted under the Plan. As used herein, "Participant" shall include
"Participant's Survivors" where the context requires.

      6. "Participant's Survivors" means a deceased Participant's legal
representatives and/or any person or persons who acquired the Participant's
rights to an Option by will or by the laws of descent and distribution.

      7. "Shares" mean those shares of the Common Stock, $.01 par value, of the
Company as to which Options have been or may be granted under the Plan.

      B. Purposes Of The Plan: The Plan is intended to encourage ownership of
the Shares of the Company by Key Employees in order to attract such Key
Employees, to induce such Key Employees to remain in the employ of the Company
or of an Affiliate and to provide additional incentive for such Key Employees to
promote the success of the Company or its Affiliates. It is further intended
that Options issued pursuant to the Plan shall be eligible to constitute
"incentive stock options" within the meaning of Section 422 of the Code.


                                       1


II. SHARES SUBJECT TO THE PLAN

      The aggregate number of Shares as to which Options may be granted from
time to time shall be 54,208,000; provided, however that such aggregate number
shall be reduced by the number of shares which have been sold under, or may be
sold pursuant to options granted from time to time under the Company's 1985
Non-Qualified Stock Option Plan (the "1985 Plan"), to the same extent as if such
sales had been made or options granted pursuant to this Plan.

      If any option granted under this Plan or the 1985 Plan ceases to be
"outstanding", in whole or in part, other than by reason of the exercise of such
option, the shares which were subject to such option shall be available for the
granting of other Options. Any option shall be treated as "outstanding" until
such option is exercised in full, terminates under the provisions of this Plan
or the 1985 Plan, as the case may be, or expires by reason of lapse of time.

      The aggregate number of Shares as to which Options may be granted shall be
subject to change only by means of an amendment of the Plan duly adopted by the
Company and approved by the Shareholders of the Company within one year before
or after the date of the adoption of any such amendment, subject to the
provisions of Article VII.

III. ADMINISTRATION OF THE PLAN

      The Plan shall be administered by the Stock and Option Plan Administration
Committee of the Company (the "Committee"). The membership of the Committee
shall be determined and shall be subject to change without cause and without
notice from time to time, by the Company.

      The Committee is authorized to interpret the provisions of the Plan or of
any Option and to make all rules and determinations necessary or advisable for
the administration of the Plan. It may from time to time determine which
employees of the Company or of any Affiliate shall be designated as Key
Employees and which of the Key Employees shall be granted Options and, subject
to the other provisions of the Plan, the number of Shares for which an Option or
Options shall be granted. Subject to the provisions of the Plan, Options may be
granted upon such terms and conditions as the Committee may prescribe; provided,
however, that such terms and conditions shall be prescribed in the context of
preserving, to the extent reasonably possible, the United States tax status of
the Options as incentive stock options.

      This Plan is intended to comply in all respects with Rule 16b-3 or its
successors promulgated under the Securities Exchange Act of 1934 ("1934 Act")
with respect to participants who are subject to Section 16 of the 1934 Act, and
any provision in this Plan with respect to such persons contrary to Rule 16b-3
shall be deemed null and void to the extent permissible by law and deemed
appropriate by the Committee.


                                       2


IV. ELIGIBILITY FOR PARTICIPATION

      Each Participant must be a Key Employee of the Company or of an Affiliate
at the time an Option is granted.

      The Committee may grant to one or more Key Employees one or more Options,
and shall designate the number of Shares to be optioned under each Option so
granted; provided, however, that no Options shall be granted after June 23,
2005, and provided further, that the fair market value (determined as of the
date the Options are granted) of the Shares as to which incentive stock options
granted on or after January 1, 1987 by the Company or its Affiliates to any
individual employee under the Plan and/or under any other incentive stock option
plans are exercisable for the first time in any one calendar year shall not
exceed $100,000.

      Notwithstanding any of the foregoing provisions, the Committee may
authorize the grant of an Option to a person not then in the employ of the
Company or of an Affiliate, conditioned upon such person becoming eligible to be
a Participant at or prior to the execution of the Option agreement evidencing
such Option.

      In no event shall any employee be granted in any calendar year options to
purchase or receive more than 2,400,000 shares of the Company's Common Stock
pursuant to this Plan.

V. TERMS AND CONDITIONS

      Each Option shall be set forth in writing in an Option agreement, duly
executed on behalf of the Company and by the Participant to whom such Option is
granted. No Option shall be deemed to have been granted and no purported grant
of any Option shall be effective, until such Option shall have been approved by
the Committee. The Committee may provide that Options be granted subject to such
conditions as the Committee may deem appropriate, including without limitation,
subsequent approval by the shareholders of the Company of this Plan or any
amendments thereto. Each such Option agreement shall be subject to at least the
following terms and conditions:

      A. Option Price: If, including for this purpose the Shares which are the
subject of Options previously granted and outstanding or proposed to be granted
hereunder, the optionee owns 10% or less of the total combined voting power of
all classes of share capital of the Company, the Option price (per share) of the
Shares covered by each Option granted hereunder shall be not less than the fair
market value (per share) of the Shares on the date of the grant of the Option;
provided, however, that in no event shall the Option price be less than the par
value per share of Common Stock. In all other cases, the Option price shall be
not less than 110% of the said fair market value. For purposes hereof, the fair
market value shall be the average between the high and low sale prices, as
reported in the National Association of Securities Dealers


                                       3


Automated Quotation System ("NASDAQ") for the date of the grant of the Option
or, if none, for the most recent trading date thirty (30)days or less prior to
the date of the grant of the Option on which the Common Stock was traded. If the
fair market value cannot be determined under the preceding sentence, it shall be
determined in good faith by the Committee.

      B. Number of Shares: Each Option shall state the number of Shares to which
it pertains.

      C. Term of Option: Each Option shall terminate at such date as the
Committee, at the time it authorizes the grant of the Option, shall determine,
and shall be subject to earlier termination as herein provided, except that if
the option price is required under Paragraph A of this Article V to be at least
110% fair market value, each such Option shall terminate not more than five (5)
years from the date of the grant hereof; and provided that in no case may the
term of any Option exceed ten (10) years.

      D. Date of Exercise: The Committee may prescribe the date or dates on
which the Option becomes exercisable, and may provide that the Option rights
accrue or become exercisable in installments over a period of months or years,
or upon the attainment of stated goals. The Committee may stipulate that any
Option which becomes exercisable shall be subject to cancellation or that Shares
purchased upon the exercise of such Option shall be subject to repurchase rights
in favor of the Company. In such event, the Committee shall determine the date
or dates, or event or events, upon which such cancellation or repurchase rights
shall become effective or shall lapse, as the case maybe.

      E. Medium of Payment: The option price shall be payable upon the exercise
of the Option. It shall be payable in cash, or, if permitted by the Committee
and by Section 422 of the Code, in shares or other consideration.

      F. Prior Options: By its terms, each Option granted prior to January 1,
1987 under the Plan to a Participant, shall not be exercisable while there
is"outstanding" any other incentive stock option (as defined in the predecessor
to Section 422 of the Code), which was granted before the grant of such Option,
to such Participant to purchase Shares in the Company or in an Affiliate or in a
predecessor of the Company or of an Affiliate.

      G. Termination of Employment: A Participant who ceases (for any reason
other than death or disability or termination by the Participant's employer for
cause) to be an employee of the Company or of an Affiliate, may exercise any
Option granted to such Participant, to the extent that the right to purchase
Shares thereunder has accrued on the date of such termination of employment, but
only within three (3) months, or such shorter period as may be determined by the
Committee, after such date, or, if earlier, within the originally prescribed
term of the Option. A Participant's employment shall not be deemed terminated by
reason of a transfer to another employer which is the Company or an Affiliate.


                                       4


      A Participant whose employment is terminated by the Participant's employer
for cause shall forthwith upon such termination cease to have any right to
exercise any Option. For purposes of this paragraph, "cause" shall be deemed to
include dishonesty with respect to the employer, insubordination, substantial
malfeasance or non-feasance of duty, unauthorized disclosure of confidential
information, and conduct substantially prejudicial to the business of the
Company or any Affiliate. The determination of the Committee as to the existence
of cause shall be conclusive on the Participant and Company.


      A Participant to whom an Option has been granted under the Plan who is
absent from work with the Company or with an Affiliate because of temporary
disability, or who is on leave of absence for any purpose permitted by any
authoritative interpretation of Section 422, shall not, during the period of any
such absence, be deemed, by virtue of such absence alone, to have terminated his
employment with the Company or with an Affiliate, except as the Committee may
otherwise expressly provide.

      H. Disability: If a Participant ceases to be an employee of the Company or
of an Affiliate by reason of Disability, any Option held by him or her on the
date of Disability shall be exercisable as to all or any part of the Shares
subject to the Option, all of which shares shall be fully vested as of the date
of such Disability. A Disabled Participant may exercise such Option only within
a period of one (1) year after the date as of which the Committee determines
that he or she became Disabled, or, if earlier, within the originally prescribed
term of the Option.

      I. Death: If a Participant dies while the Participant is an employee of
the Company or of an Affiliate, any Option held by him or her at the date of
death shall be exercisable as to all or any part of the Shares subject to the
Option, all of which shares shall be fully vested as of the date of the
Participant's death. A deceased Participant's Survivors may exercise such Option
only within a period of one (1) year after the date of death, or, if earlier,
within the originally prescribed term of the Option.

      J. Exercise of Option and Issue of Shares: Options shall be exercised by
giving written notice to the Company, addressed to the Company at the address
specified in the Option agreement, with which the Participant shall tender the
Option price. Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is
being exercised, and shall contain any warranty required by Article VI. The
issuance of the Shares may be delayed by the Company if any law or regulation
requires the Company to take any action with respect to the shares prior to the
issuance thereof. Without limiting the generality of the foregoing, nothing
contained herein shall be deemed to require the Company to issue any Shares if
prohibited by law or applicable regulation.

      The Shares shall, upon delivery, be evidenced by an appropriate
certificate or certificates in respect of paid-up, non-assessable Shares.


                                       5


      K. Rights as a Shareholder: No Participant to whom an Option has been
granted shall have rights as a shareholder with respect to any Shares covered by
such Option except as to such Shares as have been registered in the Company's
share register in the name of such Participant upon the due exercise of the
Option.

      L. Assignability and Transferability of Options: By its terms, an Option
granted to a Participant shall not be transferable by the Participant otherwise
than by will or by the laws of descent and distribution and shall be
exercisable, during the Participant's lifetime, only by such Participant. Such
Option shall not be assigned, pledged, or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment, or similar process. Any attempted transfer, assignment, pledge,
hypothecation, or other disposition of any Option or of any rights granted
thereunder contrary to the provisions of this Paragraph L, or the levy of any
attachment or similar process upon an Option or such rights, shall be null and
void.

      M. Tax Withholding: In the event that any federal, state, or local income
taxes, employment taxes, Federal Insurance Contributions Act ("F.I.C.A.")
withholdings or other amounts are required by applicable law or governmental
regulation to be withheld from the Option holder's salary in connection with the
exercise of an Option, the Option holder shall advance in cash to the Company,
or to any Affiliate of the Company which employs or employed the Option holder,
the amount of such withholdings unless a different withholding arrangement,
including the use of shares of the Company's Common Stock, is authorized by the
Committee (and permitted by law), provided, however, that with respect to
persons subject to Section 16 of the 1934 Act, any such withholding arrangement
shall be in compliance with any applicable provisions of Rule 16b-3 promulgated
under Section 16 of the 1934 Act. For purposes hereof, the fair market value of
the shares withheld for purposes of payroll withholding shall be determined in
the manner provided in Section V.A. above, as of the most recent practicable
date prior to the date of exercise. If the fair market value of the shares
withheld is less than the amount of payroll withholdings required, the Option
holder may be required to advance the difference in cash to the Company or the
Affiliate employer.

      N. Reload Options: Concurrently with the award of Options under the Plan,
the Committee may authorize reload options ("Reload Options") to purchase for
cash or shares a number of shares of Common Stock. The number of Reload Options
shall equal (i) the number of shares of Common Stock used to exercise the
underlying Options and (ii) to the extent authorized by the Committee, the
number of shares of Common Stock used to satisfy any tax withholding requirement
incident to the exercise of the underlying Options. The grant of a Reload Option
will become effective upon the exercise of underlying Options or Reload Options
through the use of shares of Common Stock held by the optionee for at least 6
months. Reload Options must be evidenced in Option agreements. The Option price
per share of Common Stock deliverable upon the exercise of a Reload Option shall
be determined in accordance with Paragraph V.A. hereof on the date the grant of
the Reload Option becomes effective. The term of each Reload Option shall be
equal to the remaining option term of the underlying Option. No additional
Reload Options shall be granted to Option holders when Options and/or Reload
Options are exercised pursuant to


                                       6


the terms of this Plan following termination of the Option holder's employment
or on account of death or total and permanent disability. All other provisions
of this Plan with respect to Options shall apply equally to Reload Options.

      O. Other provisions: The Option agreements authorized under the Plan shall
be subject to such other terms and conditions, including, without limitation,
restrictions upon the exercise of the Option, as the Committee shall deem
advisable. Any such Option agreement shall contain such limitations and
restrictions upon the exercise of the Option as shall be necessary in order that
such Option can be an "incentive stock option" within the meaning of the Section
442 of the Code.

VI. PURCHASE FOR INVESTMENT

      If, and to the extent that, the issuance of Shares pursuant to the
exercise of Options is deemed by the Company to be subject to the United States
Securities Act of 1933, as now in force or hereafter amended, ("1993 Act"), or
to the securities laws of any other jurisdiction, the Company shall be under no
obligation to issue the Shares covered by such exercise unless the person or
persons who exercises or who exercise such Option shall make such warranty as
may be required by any applicable securities law of any applicable jurisdiction
and shall, in the case of the applicability of the 1933 Act, in the absence of
an effective registration under such Act with respect to such Shares, warrant to
the Company, at the time of such exercise, that such person is or that they are
acquiring the Shares to be issued to such person or to them, pursuant to such
exercise of the Option, for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and in such events the
person or persons acquiring such Shares shall be bound by the provisions of a
legend endorsed upon any share certificates expressing the requirements of any
applicable non-United States securities law, or, in cases deemed governed by the
1933 Act substantially the following legend, which shall be endorsed upon the
certificate or certificates evidencing the Shares issued by the Company pursuant
to such exercise:

            "The shares have not been registered under the securities laws of
            any country including the United States Securities Act of 1933, as
            amended, and the Company may refuse to permit the sale or transfer
            of all or any of the shares until (1) the Company has received an
            opinion of Counsel satisfactory to the Company that any such
            transfer is exempt from registration under all applicable securities
            laws or (2) in the case of sales or transfer to which the United
            States Securities Act of 1933 is applicable, unless a registration
            statement with respect to such shares shall be effective under such
            Act, as amended."

      Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent which the Company deems necessary under any applicable law (including,
without limitation, state securities or "blue sky" laws).


                                       7


VII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

      In the event that the outstanding Common Stock, $.01 par value, of the
Company is changed into or exchanged for a different number or kind of shares or
other securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, recapitalization, reclassification,
change in par value, stock split-up, combination of shares or dividend payable
in capital stock, or the like, appropriate adjustment shall be made in the
number and kind of Shares for the purchase of which Options may be granted under
the Plan, and, in addition, appropriate adjustment shall be made in the number
and kind of Shares and in the Option price per share subject to outstanding
Options so that each Option holder shall be in a position equivalent to the
position the Option holder would have been in had the Option holder exercised
the Options immediately prior to the applicable event. No such adjustment shall
be made which shall, within the meaning of Section 424 of the Code, constitute
such a modification, extension or renewal of any Option as to cause it to be
considered as the grant of a new Option.

VIII. DISSOLUTION OR LIQUIDATION OF THE COMPANY

      Upon the dissolution or liquidation of the company other than in
connection with a transaction to which the preceding Article VII is applicable,
all Options granted hereunder shall terminate and become null and void;
provided, however, that if the rights of a Participant or the Participant's
Survivors hereunder have not otherwise terminated and expired, the Participant
or the Participant's Survivors shall have the right immediately prior to such
dissolution or liquidation to exercise any Option granted hereunder to the
extent that the right to purchase Shares thereunder has accrued as of the date
of exercise immediately prior to such dissolution or liquidation.

IX. TERMINATION OF THE PLAN

      The Plan shall terminate on June 23, 2005. The Plan may be terminated at
an earlier date by vote of the Shareholders; provided, however, that expiration
or any such earlier termination shall not affect any Option granted or Option
agreements executed prior to expiration or the effective date of such
termination.

X. AMENDMENT OF THE PLAN

      The Plan may be amended by action of the Committee or the Board of
Directors of the Company; provided, however, that if the scope of any amendment
is such as to require shareholder approval in order to preserve incentive stock
option treatment, then such amendments shall also require approval, within one
(1) year before or after the adoption thereof, by the shareholders, and provided
further that if the scope of any amendment is such as to require shareholder
approval in order to comply with Rule 16b-3 under the 1934 Act, then such
amendment shall also require approval by the shareholders. Any amendment shall
not affect any Options theretofore granted and any Option agreements theretofore
executed by the Company


                                       8


and a Participant, unless such amendment shall expressly so provide. No
amendment shall adversely affect any Participant with respect to an outstanding
Option without the written consent of such Participant. With the consent of the
Option holder affected, the Committee may amend any outstanding Option agreement
in a manner not inconsistent with the plan, including, without limitation, to
accelerate the date of exercise of any installment of any Option.

XI. EMPLOYMENT RELATIONSHIP

      Nothing herein contained shall be deemed to prevent the Company or an
Affiliate from terminating the employment of a Participant, nor to prevent a
Participant from terminating the Participant's employment with the Company or an
Affiliate.

XII. EFFECTIVE DATE

      This Plan first became effective as of January 8, 1982, subject to the
approval, within one (1) year after such adoption, of the shareholders of the
Company.


                                       9

EX-10.21

                                                                   Exhibit 10.21

                                  BIOGEN, INC.
                      1985 NON-QUALIFIED STOCK OPTION PLAN
               (As amended and restated through February 7, 2003,
                       effective as of February 7, 2003)

I. PURPOSE OF THE PLAN

      The Plan is intended to encourage ownership of shares of the Common Stock
by certain Employees and Directors of the Company and its Affiliates and to
provide an additional incentive to those Employees and Directors to promote the
success of the Company and its Affiliates.

II. DEFINITIONS

      1. "Affiliate" means (a) a corporation in respect of which the Company
owns directly or indirectly fifty percent (50%) or more of the voting securities
thereof or which is otherwise controlled by the Company; or (b) to the extent
not inconsistent with Section 424 of the Code, an unincorporated trade or
business controlled by the Company which has elected, for federal income tax
purposes, to be either (i) classified as an association taxable as a corporation
or (ii) disregarded as an entity separate from its owner (as provided in Section
301.7701-3 of the federal income tax regulations). For purposes of this
definition, the Company shall be deemed to control another entity if the Company
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such entity, whether through ownership of voting
securities, by contract or otherwise.

      2. "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

      3. "Committee" means the Stock and Option Plan Administration Committee of
the Board of Directors of the Company or, if such committee ceases to exist, the
Board of Directors of the Company or a committee thereof to which responsibility
for administering the Plan shall have been delegated.

      4. "Common Stock" means the common stock of the Company, par value $0.01
per share.

      5. "Company" means Biogen, Inc., a Massachusetts corporation.

      6. "Corporate Change in Control" shall be deemed to have occurred upon:

            (i) the acquisition of beneficial ownership (as determined pursuant
      to the provisions of Rule 13d-3 under the Exchange Act) of securities of
      the Company representing more than fifty percent (50%) of the combined
      voting power of the Company's then outstanding securities by a person,
      entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of
      the Exchange Act (excluding for this purpose, the Company or its
      Affiliates, or any employee benefit plan of the Company),


                                  Page 1 of 14


      pursuant to a transaction or series of related transactions which the
      Board of Directors does not approve; or

            (ii) at such time as individuals who as of April 27, 2001 constitute
      the Board of Directors (the "Incumbent Board") cease for any reason to
      constitute a majority of the Board of Directors of the Company, provided
      that any person becoming a director subsequent to April 27, 2001 whose
      election or nomination for election by the Company's stockholders was
      approved by a vote of at least a majority of the directors then comprising
      the Incumbent Board, shall, for purposes of the Plan, be considered as
      though such person were a member of the Incumbent Board (other than an
      individual whose initial assumption of office is in connection with an
      actual or threatened election contest related to the election of the
      directors of the Company, as such terms are used in Rule 14a-11 of
      Regulation 14A promulgated under the Exchange Act); or

            (iii) the occurrence of any other event which the Incumbent Board in
      its sole discretion determines should be considered a Corporate Change of
      Control.

      7. "Corporate Transaction" shall mean the following unless and until the
transaction becomes a Corporate Change in Control:

            (i) a reorganization, recapitalization, merger or consolidation
      unless more than fifty percent (50%) of the Company's outstanding voting
      stock or the voting stock of the corporation resulting from the
      transaction (or the parent of such corporation) is held subsequent to the
      transaction by the persons who held the stock of the Company immediately
      prior to such transaction, or

            (ii) the sale, transfer or other disposition of all or substantially
      all of the assets of the Company to a successor in interest to the
      business of the Company.

      8. "Designated Employee" means an Employee or Director designated by the
Committee, in its sole discretion, as a "Designated Employee" for purposes of
the Plan at any time prior to the effective date of a Corporate Transaction.

      9. "Director" means a member of the Board of Directors of the Company or
an Affiliate.

      10. "Employee" means an individual employed by the Company or an Affiliate
as a common law employee (determined under the regular personnel policies,
practices and classifications of the Company or the Affiliate, as applicable).
An individual is not considered an Employee for purposes of the Plan if the
individual is classified as a consultant or contractor under the Company or an
Affiliate's regular personnel classifications and practices, or if the
individual is a party to an agreement to provide services to the Company or an
Affiliate without participating in the Plan, notwithstanding that such
individual may be treated as a common law employee for payroll tax, coverage
requirements under Section 410(b) of the Code, nondiscrimination requirements
under Section 401(a)(4) or other legal purposes.


                                  Page 2 of 14


      11. "Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time.

      12. "Fair Market Value" shall have the meaning set forth in Section VI.A.

      13. "For Cause" shall have the meaning set forth in Section VI.G.

      14. "Incumbent Board" shall have the meaning set forth in the definition
of "Corporate Change of Control."

      15. "Involuntary Employment Action" shall have the meaning set forth in
Section VI.R.

      16. "ISO Plan" shall have the meaning set forth in Article III.

      17. "Option" means a stock option granted under this Plan.

      18. "Option Certificate" means a certificate delivered to an Option holder
by the Company pursuant to the Plan, in such form as the Committee shall
approve, which sets forth the terms and conditions of an Option.

      19. "Plan" shall mean this 1985 Non-Qualified Stock Option Plan, as
amended and/or restated from time to time.

      20. "Retirement" shall have the meaning set forth in Section VI.J.

      21. "Securities Act" shall mean the United States Securities Act of 1933,
as amended from time to time.

III. SHARES SUBJECT TO THE PLAN

      The aggregate number of shares as to which Options may be granted from
time to time shall be 54,208,000 shares of the Common Stock; provided, however
that such aggregate number shall be reduced by the number of shares which has
been sold under, or may be sold pursuant to options granted from time to time
under, the Company's 1982 Incentive Stock Option Plan (the "ISO Plan"), to the
same extent as if such sales had been made or options granted pursuant to the
Plan.

      Notwithstanding the foregoing, on the first day of each fiscal year of the
Company (beginning in 2003) the number of shares as to which Options may be
granted from time to time pursuant to the Plan shall be increased by an amount
equal to the lesser of (i) 3,695,000 shares or the equivalent of such number of
shares of the Common Stock after the Committee, in its sole discretion, has
interpreted the effect of any stock split, stock dividend, combination,
recapitalization or similar transaction in accordance with Article VIII of this
Plan; or (ii) 2.5% of the number of outstanding shares of the Common Stock on
the last trading day of the immediately preceding fiscal year.


                                  Page 3 of 14


      If any Option granted under the Plan or the ISO Plan ceases to be
"outstanding", in whole or in part, other than by reason of the exercise of such
Option, the shares which were subject to such Option shall be available for the
granting of other Options. Any Option shall be treated as "outstanding" until
such Option is exercised in full, terminates under the provisions of the Plan or
the ISO Plan, as the case may be, or expires by reason of lapse of time.

      Except as expressly provided above, the aggregate number of shares as to
which Options may be granted shall be subject to change only by means of an
amendment adopted in accordance with Article XI below, subject to the provisions
of Article VIII.

IV. ADMINISTRATION OF THE PLAN

      The Plan shall be administered by the Committee. The membership of the
Committee shall be determined, and shall be subject to change without cause and
without notice from time to time, by the Board of Directors of the Company.

      The Committee is authorized to interpret the provisions of the Plan or of
any Option and to make all rules and determinations necessary or advisable for
the administration of the Plan. The interpretation and construction by the
Committee of any provision of the Plan or of any Option granted under it shall
be final, unless otherwise determined by the Incumbent Board. The Committee's
determinations under the Plan do not need to be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Options under
the Plan (whether or not such persons are similarly situated). Subject to the
provisions of the Plan, Options may be granted upon such terms and conditions as
the Committee may prescribe.

V. ELIGIBILITY FOR PARTICIPATION

      The Committee shall determine which Employees and Directors shall be
eligible to participate in the Plan. Without limiting the generality of the
foregoing, Options may be awarded for reasons of performance, merit, promotion,
bonus or upon new Employees joining the Company or any Affiliate.

      The Committee may grant to one or more such Employees or Directors one or
more Options, and shall designate the number of shares to be optioned under each
Option so granted; provided, however, that no Options shall be granted after
December 31, 2011. In no event shall any Employee be granted in any calendar
year Options to purchase or receive more than 2,400,000 shares, as adjusted
pursuant to Article VIII, of the Common Stock pursuant to the Plan.

VI. TERMS AND CONDITIONS OF OPTIONS

      No Option issued pursuant to the Plan shall be an incentive stock option
under Section 422 of the Code. No purported grant of any Option shall be
effective until such Option shall have been approved by the Committee, except as
otherwise provided in Section VI.N below. The Committee may provide that Options
be granted subject to such conditions as the Committee may deem appropriate,
including without limitation, subsequent approval by the shareholders of


                                  Page 4 of 14


the Company of the Plan or any amendments thereto. Each Option shall be subject
to at least the following terms and conditions:

      A. Option Price: Each Option Certificate shall state the Option price per
share of the Common Stock covered by such Option grant. Except as otherwise
determined by the Committee, the Option price per share for Options granted
under the Plan shall be equal to the fair market value per share of Common Stock
(the "Fair Market Value") on the date of grant of the Option; provided, however,
that in no event shall the Option price be less than the par value per share of
Common Stock. Fair Market Value shall be calculated as follows: (i) if the
Common Stock is listed on a national securities exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market and sale prices are regularly
reported for the Common Stock, then the Fair Market Value shall be the
arithmetic mean between the "high" and "low" sale prices for the Common Stock
reported on the applicable composite tape or other comparable reporting system
on the date of grant, or if the date of grant is not a trading day, on the most
recent trading day immediately prior to the date of grant; or (ii) if sale
prices are not regularly reported for the Common Stock as described in clause
(i) above but bid and asked prices for the Common Stock are regularly reported,
then the Fair Market Value shall be the arithmetic mean between the closing or
last bid and asked prices for the Common Stock on the date of grant or, if the
date of grant is not a trading day, on the most recent trading day immediately
prior to the date of grant; or (iii) if sale prices are not regularly reported
for the Common Stock as described in clause (i) or (ii) above, then the Fair
Market Value shall be such value as the Committee in good faith determines.

      B. Number of Shares: Each Option Certificate shall state the number of
shares of the Common Stock to which it pertains.

      C. Term of Option: Each Option Certificate shall state the term of the
Option which shall be ten (10) years from the date of the grant thereof, or at
such earlier or later time as the Committee shall expressly state in the Option
Certificate.

      D. Date of Exercise: Each Option Certificate shall state the date or dates
on which the Option becomes exercisable, and may provide that the Option rights
accrue or become exercisable in installments over a period of months or years,
or upon the attainment of stated goals or events or through other circumstances
or programs approved by the Committee. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option.

      E. Cancellation and Repurchase Rights: An Option Certificate may stipulate
that an Option which becomes exercisable shall be subject to cancellation or
that shares purchased upon the exercise of such Option shall be subject to
repurchase rights in favor of the Company. In such event the Committee shall
determine the date or dates, or event or events, upon which such cancellation or
repurchase rights shall become effective or shall lapse, as the case may be and
those provisions shall be set forth in the Option Certificate.

      F. Medium of Payment: The Option price shall be payable upon the exercise
of the Option. It shall be payable (a) in United States dollars in cash or by
check, (b) if permitted by


                                  Page 5 of 14


the Committee, in shares of the Common Stock held by the Option holder for at
least six months having a fair market value (determined in the manner provided
in Section VI.A above as of the date of exercise) equal to the cash exercise
price of the Option, (c) at the discretion of the Committee, by delivery of the
Option holder's personal note, for full, partial or no recourse, bearing
interest payable not less than annually at market rate on the date of exercise
and no less than 100% of the applicable Federal rate, as defined in Section
1274(d) of the Code, with or without the pledge of shares of the Common Stock as
collateral, (d) at the discretion of the Committee, in accordance with a
cashless exercise program established with a securities brokerage firm, or (e)
at the discretion of the Committee, by any combination of (a), (b), (c) and (d)
above.

      G. Termination of Employment: An Option holder who ceases (for any reason
other than death, total and permanent disability, Retirement or termination of
employment For Cause) to be an Employee or Director of the Company or of an
Affiliate may exercise any Option granted to the extent that the right to
purchase shares thereunder has accrued on the date of such termination. Except
as set forth in the next sentence or as otherwise set forth in the Plan, such
Option shall be exercisable only within three (3) months after such date of
termination, or, if earlier, within the originally prescribed term of the
Option, unless the Committee shall set forth a different period in the Option
Certificate. Notwithstanding anything in this Plan to the contrary, unless a
different time period is specified in the Option Certificate, an Option holder
(or permitted transferee of such individual) who ceases (for any reason other
than For Cause) to be a member of the Board of Directors of the Company after
the completion of at least six (6) full years of services on the Board may
exercise any Option granted within the originally prescribed term of the Option
but solely to the extent the right to purchase shares thereunder has accrued on
the date of such termination. For purposes of the Plan, employment shall not be
deemed terminated by reason of a transfer to another employer which is the
Company or an Affiliate. If any Option is not exercised following the Option
holder's termination within the time specified, the Option shall terminate and
the shares covered by such Option shall revert to the Plan.

      An Option holder whose employment with the Company or an Affiliate is
terminated For Cause or a Director who is removed from the Board of Directors
For Cause shall forthwith immediately upon notice of such termination cease to
have any right to exercise any Option, and the Option shall terminate and the
shares covered by such Option shall revert to the Plan. For purposes of the
Plan, termination "For Cause" shall be deemed to include (and is not limited to)
dishonesty with respect to the Company or any Affiliate, insubordination,
substantial malfeasance or non-feasance of duty, unauthorized disclosure of
confidential information, breach by an Option holder of any provision of any
employment, nondisclosure, non-competition or similar agreement between the
Option holder and the Company or any Affiliate, and conduct substantially
prejudicial to the business of the Company or an Affiliate. The determination of
the Committee as to the existence of cause shall be conclusive. Any definition
in an agreement between an Option holder and the Company or an Affiliate, which
contains a conflicting definition of For Cause and which is in effect at the
time of such termination, shall supersede the definition in the Plan with
respect to the Option holder.

      An Option holder to whom an Option has been granted under the Plan who is
absent from work with the Company or with an Affiliate because of temporary
disability, or who is on a


                                  Page 6 of 14


permitted leave of absence for any purpose, shall not, during the period of any
such absence, be deemed by virtue of such absence alone, to have terminated his
employment with the Company or with an Affiliate except as the Committee may
otherwise expressly provide in the Option Certificate.

      H. Total and Permanent Disability: If an Option holder ceases to be an
Employee or Director of the Company or of an Affiliate by reason of total and
permanent disability, as determined by the Committee, any Option held by him or
her on the date of disability shall be exercisable as to all or any part of the
shares subject to the Option, all of which shares shall be fully vested as of
the date of such disability. A disabled Option holder may exercise such Option
only within a period of one (1) year after the date as of which the Committee
determines that he or she became disabled or within such different period as may
be determined by the Committee and set forth in the Option Certificate, or, if
earlier, within the originally prescribed term of the Option. If any Option is
not exercised following the Option holder's total and permanent disability
within the time specified, the Option shall terminate and the shares covered by
such Option shall revert to the Plan.

      I. Death: If an Option holder dies while the he is an Employee or Director
of the Company or of an Affiliate, any Option held by him at the date of death
shall be exercisable as to all or any part of the shares subject to the Option,
all of which shares shall be fully vested as of the date of the Option holder's
death. A deceased Option holder's legal representatives or one who acquires the
Option by will or by the laws of descent and distribution may exercise such
Option only within a period of one (1) year after the date of death or within
such different period as may be determined by the Committee and set forth in the
Option Certificate, or, if earlier, within the originally prescribed term of the
Option. If any Option is not exercised following the Option holder's death
within the time specified, the Option shall terminate and the shares covered by
such Option shall revert to the Plan.

      J. Retirement: Unless otherwise set forth in an Option Certificate,
immediately upon an Option holder's Retirement, such individual's then unvested
Options, including those held by a permitted transferee of such individual,
shall automatically accelerate and become fully vested for fifty percent (50%)
of the number of shares covered by such unvested Options and for an additional
ten percent (10%) of the number of shares covered by such unvested Options for
every year of employment by the Company or any of its Affiliates beyond ten (10)
years, up to the remaining number of unvested Options. Upon Retirement, a
retired Option holder (or permitted transferee of such individual) may exercise
any then outstanding Options solely to the extent the right to purchase shares
has accrued or has been accelerated only within a period of three (3) years
after the date of Retirement or within such different period as may be
determined by the Committee and set forth in the Option Certificate, or, if
earlier, within the originally prescribed term of the Option. If any Option is
not exercised following the Option holder's Retirement within the time
specified, the Option shall terminate and the shares covered by such Option
shall revert to the Plan. For purposes of the Plan, the term "Retirement" as to
any Employee or Director of the Company or any of its Affiliates shall mean such
person's leaving the employment of the Company and its Affiliates after reaching
age 55 with ten (10) years of service with the Company or its Affiliates, but
not including pursuant to any termination For


                                  Page 7 of 14


Cause or pursuant to any termination for insufficient performance, as determined
by the Company.

      The provisions of this Section VI.J shall be retroactive and shall apply
to all outstanding Options granted under the Plan, regardless of the date of
grant.

      K. Exercise of Option and Issue of Shares: Options shall be exercised by
giving written notice to the Company or its designee, together with provision
for payment of the Option price in accordance with Section VI.F. Such written
notice shall be signed by the person exercising the Option, shall state the
number of shares of the Common Stock with respect to which the Option is being
exercised, and shall contain any warranty required by Article VII of the Plan.
The issuance of the shares of the Common Stock upon exercise of the Option may
be delayed by the Company if any law or regulation requires the Company to take
any action with respect to the shares prior to the issuance thereof. Without
limiting the generality of the foregoing, nothing contained herein shall be
deemed to require the Company to issue any shares of the Common Stock if
prohibited by law or applicable regulation.

      The shares of the Common Stock shall, upon issuance, be paid-up,
non-assessable shares.

      L. Assignability and Transferability of Option: By its terms, an Option
granted to an Option holder shall not be transferable by such Option holder
other than (i) by will or by the laws of descent and distribution, or (ii)
pursuant to a qualified domestic relations order, as defined by the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
or (iii) as otherwise determined by the Committee. The designation of a
beneficiary of an Option by an Option holder shall not be deemed a transfer
prohibited by this Section. Except as provided in the preceding sentence, an
Option shall be exercisable, during an Option holder's lifetime, only by the
Option holder (or by his or her legal representative) and shall not be assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation, or other disposition of
any Option or of any rights granted thereunder contrary to the provisions of
this Section, or the levy of any attachment or similar process upon an Option or
other such rights, shall be null and void.

      M. Other Provisions: The Option Certificates shall be subject to such
other terms and conditions, including, without limitation, restrictions upon the
exercise of the Option, as the Committee shall deem advisable.

      N. Non-Employee Director Options: Each Director of the Company who is not
an Employee of the Company or any of its Affiliates and who is appointed or
elected to the Board of Directors of the Company on or after February 7, 2003,
upon first being appointed or elected to the Board shall be automatically
granted an Option to purchase 20,000 shares of Common Stock(each, an "Initial
Grant")

      Each Director of the Company who is not an Employee of the Company or any
of its Affiliates shall be automatically granted an Option to purchase an
additional 10,000 shares of Common Stock (each a "Subsequent Grant"); provided
that on the date of grant such person is


                                  Page 8 of 14


still a member of the Board of Directors of the Company. The date of grant of
each Subsequent Grant to any Director appointed or elected to the Board of
Directors of the Company on or after February 7, 2003 shall be the anniversary
date of such Director's initial appointment or election to the Board. The date
of grant of each Subsequent Grant to any Director appointed or elected to the
Board of Directors of the Company prior to February 7, 2003 shall be the
anniversary date of such Director's most recent prior Option grant under the
Plan.

      The Initial Grant shall be exercisable as to 8,000 of the shares subject
thereto upon completion of one full year of service on the Board of Directors of
the Company after the date of grant, and as to an additional 6,000 shares upon
completion of the second full year of such service, and as to the remaining
6,000 shares upon completion of the third full year of such service. Each
Subsequent Grant shall be exercisable as to 4,000 of the shares subject thereto
upon completion of one full year of service on the Board of Directors of the
Company after the date of grant, and as to an additional 3,000 shares upon
completion of the second full year of such service, and as to the remaining
3,000 shares upon completion of the third full year of such service.

      Each Option granted under this Section VI.N shall have an exercise price
equal to the fair market value per share of Common Stock on the date of grant,
as determined under Section VI.A. above, and a term of ten (10) years, unless
earlier terminated pursuant to the other provisions of the Plan or the terms of
the grant. Section VI.G, which cancels the Options of any Option holder
determined by the Committee to have been terminated For Cause, shall not apply
to the awards under this Section VI.N.

      O. Tax Withholding: In the event that any federal, state, or local income
taxes, employment taxes, Federal Insurance Contributions Act withholdings or
other amounts are required by applicable law or governmental regulation to be
withheld from the Option holder's salary in connection with the exercise of an
Option, the Option holder shall advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Option holder, the amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Common Stock, is authorized by the Committee (and permitted
by law), provided, however, that with respect to persons subject to Section 16
of the Exchange Act, any such withholding arrangement involving use of shares
shall be in compliance with any applicable provisions of Rule 16b-3 promulgated
under Section 16 of the Exchange Act. If the Committee allows withholding
through use of shares of the Common Stock, it shall be only to the statutory
minimum amount. For purposes hereof, the fair market value of the shares
withheld for purposes of payroll withholding shall be determined in the manner
provided in Section VI.A. as of the date of exercise. If the fair market value
of the shares withheld is less than the amount of payroll withholdings required,
the Option holder may be required to advance the difference in cash to the
Company or the Affiliate employer.

      P. Reload Options: The Committee may authorize reload Options ("Reload
Options") to purchase for cash or shares a number of shares of the Common Stock.
The number of Reload Options shall equal (i) the number of shares of the Common
Stock used to exercise the underlying Options and (ii) to the extent authorized
by the Committee, the number of shares of the Common Stock used to satisfy any
tax withholding requirement incident to the exercise


                                  Page 9 of 14


of the underlying Options. The grant of a Reload Option will become effective
upon the exercise of underlying Options through the use of shares of the Common
Stock held by the option holder for at least 6 months. Reload Options must be
evidenced in Option Certificates or agreements. The Option price per share of
the Common Stock deliverable upon the exercise of a Reload Option shall be the
Fair Market Value on the date the grant of the Reload Option becomes effective.
The term of each Reload Option shall be equal to the remaining option term of
the underlying Option. No additional Reload Options shall be granted to Option
holders when Options and/or Reload Options are exercised pursuant to the terms
of the Plan following termination of the Option holder's employment or on
account of death or total and permanent disability. All other provisions of the
Plan with respect to Options shall apply equally to Reload Options.

      Q. Rights as a Shareholder: No Option holder shall have rights as a
shareholder with respect to any shares of the Common Stock covered by such
Option except as to such shares as have been registered in the Company's share
register in the name of such person upon the due exercise of the Option.

      R. Effect of Corporate Transaction: In the event of a Corporate
Transaction, the Committee shall, prior to the effective date of the Corporate
Transaction, as to each outstanding Option under the Plan either (i) make
appropriate provisions for the Options to be assumed by the successor
corporation or its parent or be replaced with a comparable options to purchase
shares of the capital stock of the successor corporation or its parent; or (ii)
upon written notice to the Option holders provide that all Options must be
exercised and the Plan will terminate (all Options having been made fully
exercisable as set forth below in this Section VI.R); or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the then aggregate
Fair Market Value of the shares subject to such Options (all Options having been
made fully exercisable as set forth below in this Section VI.R) over the
aggregate Option price thereof. The determination of comparability under this
Section shall be made by the Committee and its determination shall be final,
binding and conclusive.

      Each outstanding Option under the Plan which is assumed in connection with
a Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would have been issued,
in consummation of such Corporate Transaction, to an actual holder of the same
number of shares of the Common Stock as are subject to such Option immediately
prior to such Corporate Transaction. Appropriate adjustments shall also be made
to the Option price payable per share, provided the aggregate Option price
payable for such securities shall remain the same. In addition, the class and
number of securities available for issuance under the Plan on both an aggregate
and per participant basis shall be appropriately adjusted to reflect the effect
of the Corporate Transaction upon the Company's capital structure.

      If at any time within two (2) years of the effective date of a Corporate
Transaction there is an Involuntary Employment Action with respect to any
Designated Employee, each then outstanding Option assumed or replaced under this
Section and held by such Designated Employee (or a permitted transferee of such
person) shall, upon the occurrence of such Involuntary Employment Action,
automatically accelerate so that each such Option shall


                                 Page 10 of 14


immediately become exercisable for the total number of shares of Common Stock at
the time subject to such Option, as assumed or replaced, and may be exercised
for all or any portion of those shares to the extent not previously exercised.
Upon the occurrence of an Involuntary Employment Action with respect to a
Designated Employee, any outstanding Options held by such Designated Employee
(and his or her permitted transferees) shall be exercisable within one (1) year
of the Involuntary Employment Action or, if earlier, within the originally
prescribed term of the Option. An "Involuntary Employment Action" as to an
Designated Employee shall mean the involuntary termination of the Designated
Employee's employment with the Company or an Affiliate other than For Cause, or
the termination by the Designated Employee of his employment with the Company
and its Affiliates upon the occurrence, without the Option holder's express
written consent, of any of the following circumstances unless such circumstances
are corrected (provided such circumstances are capable of correction): (i) any
adverse and material alteration and diminution in the Option holder's position,
title or responsibilities (other than a mere change in title or reporting
relationship) as they existed immediately prior to the Corporate Transaction or
as the same may be increased from time to time thereafter, (ii) a reduction of
the Option holder's annual base salary or targeted bonus opportunity, in each
case as in effect on the date prior to the Corporate Transaction or as the same
may be increased from time to time thereafter, or (iii) relocation of the
offices at which the Option holder is employed which increases the Option
holder's daily commute by more than 100 miles on a round trip basis.

      In the event the Company terminates the Plan or elects to cash out the
Options in accordance with clauses (ii) and (iii) of the first paragraph of this
Section VI.R, then the exercisability of each Option outstanding under the Plan
shall be automatically accelerated so that each such Option shall immediately
prior to such Corporate Transaction, become exercisable for the full number of
shares of the Common Stock purchasable under such Option to the extent not
previously exercised and may be exercised prior to such Corporate Transaction
for all or any portion of such shares. The Committee shall, in its discretion,
determine the timing and mechanics required to implement the foregoing sentence.

      S. Acceleration Upon Corporate Change in Control: In the event of a
Corporate Change in Control then the exercisability of each Option outstanding
under the Plan shall be automatically accelerated so that each such Option shall
immediately prior to such Corporate Change in Control, become exercisable for
the full number of shares of the Common Stock purchasable under such Option to
the extent not previously exercised and may be exercised for all or any portion
of such shares consistent with Article VIII within the originally prescribed
term of the Option. The Committee shall, in its discretion, determine the timing
and mechanics required to implement the foregoing sentence. However, an
outstanding Option under the Plan shall not be accelerated under this Section if
and to the extent one or more limitations imposed by the Committee at the time
of grant preclude such acceleration upon a Corporate Change in Control.

      T. The provisions of Sections VI.R and VI.S shall be retroactive and shall
apply to all Options granted under the Plan, regardless of the date of grant.

      U. The grant of Options under the Plan shall in no way affect the right of
the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or


                                 Page 11 of 14


to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

VII. PURCHASE FOR INVESTMENT

      If and to the extent that the issuance of shares pursuant to the exercise
of Options is deemed by the Company to be subject to the Securities Act, or to
the securities law of any other jurisdiction, the Company shall be under no
obligation to issue shares covered by such exercise unless the person or persons
who exercises or who exercise such Option shall make such warranty or take such
action as may be required by any applicable securities law of any applicable
jurisdiction and shall, in the case of the applicability of the Securities Act,
in the absence of an effective registration under the Securities Act with
respect to such shares, warrant to the Company, at the time of such exercise,
that such person is or that they are acquiring the shares to be issued to such
person or to them, pursuant to such exercise of the Option, for investment and
not with a view to, or for sale in connection with, the distribution of any such
shares; and in such events the person or persons acquiring such shares shall be
bound by the provisions of a legend endorsed upon any share certificates
expressing the requirements of any applicable non-United States securities law,
or, in cases deemed governed by the Securities Act, substantially the following
legend, which shall be endorsed upon the certificate or certificates evidencing
the shares issued by the Company pursuant to such exercise:

            "The shares have not been registered under the securities laws of
            any country, including the United States Securities Act of 1933, as
            amended, and the Company may refuse to permit the sale or transfer
            of all or any of the shares until (1) the Company has received an
            opinion of counsel satisfactory to the Company that any such
            transfer is exempt from registration under all applicable securities
            laws or (2) in the case of sales or transfers to which the United
            States Securities Act of 1933, as amended, is applicable, unless a
            registration statement with respect to such shares shall be
            effective under such Act, as amended."

Without limiting the generality of the foregoing, the Company may delay issuance
of the shares until completion of any action or obtaining of any consent which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).

VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

      In the event that outstanding shares of the Common Stock are changed into
or exchanged for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, change in par value, stock
split-up, combination of shares or dividend payable in capital stock, or the
like except in a Corporate Transaction for which such adjustments are set forth
in Section VI.R above, appropriate adjustment shall be made in the number and
kind of shares for the purchase of which Options may be granted under the Plan,
including Options to be granted pursuant to Section VI.N above, and, in
addition, appropriate adjustment shall be made in the number and kind of shares
and in the Option price per share subject to outstanding Options so that each
Option holder shall be in a position equivalent to the position the Option


                                 Page 12 of 14


holder would have been in had the Option holder exercised the Options
immediately prior to the applicable event.

IX. DISSOLUTION OR LIQUIDATION OF THE COMPANY

      Upon the dissolution or liquidation of the Company other than in
connection with transactions to which the preceding Article VIII is applicable,
all Options granted hereunder shall terminate and become null and void;
provided, however, that if the rights hereunder of an Option holder or one who
acquired an Option by will or by the laws of descent and distribution have not
otherwise terminated and expired, the Option holder or such person shall have
the right immediately prior to such dissolution or liquidation to exercise any
Option granted hereunder to the extent that the right to purchase shares
thereunder has accrued as of the date of exercise immediately prior to such
dissolution or liquidation.

X. TERMINATION OF THE PLAN

      Unless the Committee shall decide to reduce or, subject to shareholder
approval, if required under Article XI, to extend the duration of the Plan, the
Plan shall terminate on December 31, 2011. Termination of the Plan shall not
affect any Options granted or any Option Certificates or agreements executed
prior to the effective date of termination.

XI. AMENDMENT OF THE PLAN

      The Plan may be amended by the Committee or the Board of Directors of the
Company; provided, however, that if the scope of any amendment is such as to
require shareholder approval then such amendment shall require approval by the
shareholders. Any amendment shall not affect any Options theretofore granted and
any Option Certificates or agreements theretofore executed by the Company and
any Option holder unless such amendment shall expressly so provide. No amendment
shall adversely affect any Option holder with respect to an outstanding Option
without the written consent of such Option holder. With the consent of the
Option holder affected, the Committee may amend any outstanding Option
Certificate or agreement in a manner not inconsistent with the Plan, including,
without limitation, to accelerate the date of exercise of any installment of any
Option.

XII. EMPLOYMENT RELATIONSHIP

      Nothing herein contained shall be deemed to prevent the Company or an
Affiliate from terminating the employment of any Employee, nor to prevent any
Employee from terminating his employment with the Company or an Affiliate.

XIII. EFFECTIVE DATE

      The Plan first became effective on January 2, 1985.

XIV GOVERNING LAW

      The Plan shall be construed and enforced in accordance with the law of The


                                 Page 13 of 14


Commonwealth of Massachusetts.

                                 Page 14 of 14

EX-10.22

                                                                   Exhibit 10.22

                                  BIOGEN, INC.
                     1987 SCIENTIFIC BOARD STOCK OPTION PLAN
               (As amended and restated through February 7, 2003,
                       effective as of February 7, 2003)

I. PURPOSE OF THE PLAN

      The Plan is intended to encourage ownership of shares of the Common Stock
by members of the Scientific Board of the Company and to provide an additional
incentive to those Scientific Board members to promote the success of the
Company and its Affiliates.

II. DEFINITIONS

      1. "Affiliate" means (a) a corporation in respect of which the Company
owns directly or indirectly fifty percent (50%) or more of the voting shares
thereof or which is otherwise controlled by the Company; or (b) to the extent
not inconsistent with Section 424 of the Code, an unincorporated trade or
business controlled by the Company which has elected, for federal income tax
purposes, to be either (i) classified as an association taxable as a corporation
or (ii) disregarded as an entity separate from its owner (as provided in Section
301.7701-3 of the federal income tax regulations). For purposes of this
definition, the Company shall be deemed to control another entity if the Company
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such entity, whether through ownership of voting
securities, by contract or otherwise.

      2. "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

      3. "Committee" means the Stock and Option Plan Administration Committee of
the Board of Directors of the Company or, if such committee ceases to exist, the
Board of Directors of the Company or a committee thereof to which responsibility
for administering the Plan shall have been delegated.

      4. "Common Stock" means the common stock of the Company, par value $0.01
per share.

      5. "Company" means Biogen, Inc., a Massachusetts corporation.

      6. "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended from time to time.

      7. "Fair Market Value" shall have the meaning set forth in Section VI.A.

      8. "Member" means a member of the Scientific Board of the Company.

      9. "Option" means a stock option granted under the Plan.

      10. "Option Certificate" means a certificate delivered to an Option holder
by the


                                  Page 1 of 7


Company pursuant to the Plan, in such form as the Committee shall approve, which
sets forth the terms and conditions of an Option.

      11. "Plan" means this 1987 Scientific Board Stock Option Plan, as amended
and restated from time to time.

      12. "Securities Act" means the United States Securities Act of 1933, as
amended from time to time.

III SHARES SUBJECT TO THE PLAN

      The aggregate number of shares as to which Options may be granted from
time to time shall be 3,020,000 shares of the Common Stock.

      If any Option ceases to be "outstanding", in whole or in part, other than
by reason of the exercise of such Option, the shares which were subject to such
Option shall be available for the granting of other Options. Any Option shall be
treated as "outstanding" until such Option is exercised in full, terminates
under the provisions of the Plan or expires by reason of lapse of time.

      The aggregate number of shares as to which Options may be granted shall be
subject to change only by means of an amendment adopted in accordance with
Article XI, subject to the provisions of Article VIII.

IV. ADMINISTRATION OF THE PLAN

      The Plan shall be administered by the Committee. The membership of the
Committee shall be determined, and shall be subject to change without cause and
without notice from time to time, by the Board of Directors of the Company.

      The Committee is authorized to interpret the provisions of the Plan or of
any Option and to make all rules and determinations necessary or advisable for
the administration of the Plan. The interpretation and construction by the
Committee of any provision of the Plan or of any Option granted under it shall
be final. The Committee's determinations under the Plan do not need to be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, Options under the Plan (whether or not such persons are
similarly situated). Subject to the provisions of the Plan, Options may be
granted upon such terms and conditions as the Committee may prescribe.

V. ELIGIBILITY FOR PARTICIPATION

      The Committee shall determine which Members shall be eligible to
participate in the Plan. Without limited the generality of the foregoing,
Options may be awarded for reasons of performance, merit, bonus or upon new
Members joining the Scientific Board of the Company.

      The Committee may grant to one or more such Members one or more Options,
and shall


                                  Page 2 of 7


designate the number of shares to be optioned under each Option so granted;
provided, however, that no Options shall be granted after December 31, 2002.

      VI. TERMS AND CONDITIONS OF OPTIONS

      No Option issued pursuant to the Plan shall be an incentive stock option
under Section 422 of the Code. No purported grant of any Option shall be
effective until such Option shall have been approved by the Committee. The
Committee may provide that Options be granted subject to such conditions as the
Committee may deem appropriate, including without limitation, subsequent
approval by the shareholders of the Company of the Plan or any amendments
thereto. Each Option shall be subject to at least the following terms and
conditions:

      A. Option Price: Each Option Certificate shall state the Option price per
share of the Common Stock covered by such Option grant. Except as otherwise
determined by the Committee, the Option price per share for Options granted
under the Plan shall be equal to the fair market value per share of Common Stock
(the "Fair Market Value") on the date of grant of the Option; provided, however,
that in no event shall the Option price be less than the par value per share of
the Common Stock. Fair Market Value shall be calculated as follows: (i) if the
Common Stock is listed on a national securities exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market and sale prices are regularly
reported for the Common Stock, then the Fair Market Value shall be the
arithmetic mean between the "high" and "low" sale prices for the Common Stock
reported on the applicable composite tape or other comparable reporting system
on the date of grant, or if the date of grant is not a trading day, on the most
recent trading day immediately prior to the date of grant; or (ii) if sale
prices are not regularly reported for the Common Stock as described in clause
(i) above but bid and asked prices for the Common Stock are regularly reported,
then the Fair Market Value shall be the arithmetic mean between the closing or
last bid and asked prices for the Common Stock on the date of grant or, if the
date of grant is not a trading day, on the most recent trading day immediately
prior to the date of grant; or (iii) if sale prices are not regularly reported
for the Common Stock as described in clause (i) or (ii) above, then the Fair
Market Value shall be such value as the Committee in good faith determines.

      B. Number of Shares: Each Option Certificate shall state the number of
shares of the Common Stock to which it pertains.

      C. Term of Option: Each Option Certificate shall state the term of the
Option which shall be ten (10) years from the date of the grant thereof or at
such earlier or later time as the Committee shall expressly state in the Option
Certificate.

      D. Date of Exercise: Each Option Certificate shall state the date or dates
on which the Option becomes exercisable, and may provide that the Option rights
accrue or become exercisable in installments over a period of months or years,
or upon the attainment of stated goals or events or through other circumstances
or programs approved by the Committee. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option.


                                  Page 3 of 7


      E. Cancellation and Repurchase Rights: An Option Certificate may stipulate
that an Option which becomes exercisable shall be subject to cancellation or
that shares purchased upon the exercise of such Option shall be subject to
repurchase rights in favor of the Company. In such event the Committee shall
determine the date or dates, or event or events, upon which such cancellation or
repurchase rights shall become effective or shall lapse, as the case may be and
those provisions shall be set forth in the Option Certificate.

      F. Medium of Payment: The option price shall be payable upon the exercise
of the Option. It shall be payable (a) in United States dollars in cash or by
check, (b) if permitted by the Committee, in shares of the Common Stock held by
the Option holder for at least six months having a fair market value (determined
in the manner provided in Section VI.A as of the date of exercise) equal to the
cash exercise price of the Option, (c) at the discretion of the Committee, by
delivery of the Option holder's personal note, for full, partial or no recourse,
bearing interest payable not less than annually at market rate on the date of
exercise and no less than 100% of the applicable Federal rate, as defined in
Section 1274(d) of the Code, with or without the pledge of shares of the Common
Stock as collateral, (d) at the discretion of the Committee, in accordance with
a cashless exercise program established with a securities brokerage firm, or (e)
at the discretion of the Committee, by any combination of (a), (b), (c) and (d)
above.

      G. Exercise of Option and Issue of Shares: Options shall be exercised by
giving written notice to the Company or its designee, together with provision
for payment of the Option price in accordance with Section VI.F. Such written
notice shall be signed by the person exercising the Option, shall state the
number of shares of the Common Stock with respect to which the Option is being
exercised, and shall contain any warranty required by Article VII of the Plan.
The issuance of the shares of the Common Stock upon exercise of the Option may
be delayed by the Company if any law or regulation may be delayed by the Company
if any law or regulation requires the Company to take any action with respect to
the shares prior to the issuance thereof. Without limiting the generality of the
foregoing, nothing contained herein shall be deemed to require the Company to
issue any shares of the Common Stock if prohibited by law or applicable
regulation.

      The shares of the Common Stock shall, upon issuance, be paid-up,
non-assessable shares.

      H. Assignability and Transferability of Option: By its terms, an Option
granted to an Option holder shall not be transferable by such Option holder
other than (i) by will or by the laws of descent and distribution, or (ii)
pursuant to a qualified domestic relations order, as defined by the Code or
Title 1 of the Employee Retirement Income Security Act or the rules thereunder,
or (iii) as otherwise determined by the Committee. The designation of a
beneficiary of an Option by an Option holder shall not be deemed a transfer
prohibited by this Section. Except as provided in the preceding sentence, an
Option shall be exercisable, during an Option holder's lifetime, only by the
Option holder (or his or her legal representative) and shall not be assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation, or other disposition of
any Option or of any rights granted thereunder contrary to the provisions of
this Section, or the levy of any attachment or similar process upon an Option or
other such rights, shall be null and void.


                                  Page 4 of 7


      I. Other Provisions: The Option Certificates shall be subject to such
other terms and conditions, including, without limitation, restrictions upon the
exercise of the Option, as the Committee shall deem advisable.

      J. Tax Withholding: In the event that any federal, state, or local income
taxes, employment taxes, Federal Insurance Contributions Act withholdings or
other amounts are required by applicable law or governmental regulation to be
withheld from the Option holder's salary in connection with the exercise of an
Option, the Option holder shall advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Option holder, the amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Common Stock, is authorized by the Committee (and permitted
by law); provided, however, that with respect to persons subject to Section 16
of the Exchange Act, any such withholding arrangement shall be in compliance
with any applicable provisions of Rule 16b-3 promulgated under Section 16 of the
Exchange Act. If the Committee allows withholding through use of shares of the
Common Stock, it shall be only to the statutory minimum amount. For purposes
hereof, the fair market value of the shares withheld for purposes of payroll
withholding shall be determined in the manner provided in Section VI.A as of the
date of exercise. If the fair market value of the shares withheld is less than
the amount of payroll withholdings required, the Option holder may be required
to advance the difference in cash to the Company or the Affiliate employer.

      K. Rights as a Shareholder: No Option holder shall have rights as a
shareholder with respect to any shares of the Common Stock covered by such
Option except as to such shares as have been registered in the Company's share
register in the name of such person upon the due exercise of the Option.

VII. PURCHASE FOR INVESTMENT

      If and to the extent that the issuance of shares pursuant to the exercise
of Options is deemed by the Company to be subject to the Securities Act, or to
the securities law of any other jurisdiction, the Company shall be under no
obligation to issue shares covered by such exercise unless the person or persons
who exercises or who exercise such Option shall make such warranty or take such
action as may be required by any applicable securities law of any applicable
jurisdiction and shall, in the case of the applicability of the Securities Act,
in the absence of an effective registration under the Securities Act with
respect to such shares, warrant to the Company, at the time of such exercise,
that such person is or that they are acquiring the shares to be issued to such
person or to them, pursuant to such exercise of the Option, for investment and
not with a view to, or for sale in connection with, the distribution of any such
shares; and in such events the person or persons acquiring such shares shall be
bound by the provisions of a legend endorsed upon any share certificates
expressing the requirements of any applicable non-United States securities law,
or, in cases deemed governed by the Securities Act, substantially the following
legend, which shall be endorsed upon the certificate or certificates evidencing
the shares issued by the Company pursuant to such exercise:

            "The securities represented by this certificate have not been
            registered


                                  Page 5 of 7


            under the securities laws of any country, including the United
            States Securities Act of 1933, as amended, and the Company may
            refuse to permit the sale or transfer of all or any of the shares
            until (1) the Company has received an opinion of counsel
            satisfactory to the Company that any such transfer is exempt from
            registration under all applicable securities laws or (2) in the case
            of sales or transfers to which the united Sates Securities Act of
            1933, as amended, is applicable, unless a registration statement
            with respect to such shares shall be effective under such Act, as
            amended."

Without limiting the generality of the foregoing, the Company may delay issuance
of the shares until completion of any action or obtaining of any consent which
the Company deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).

VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

      In the event that outstanding shares of the Common Stock are changed into
or exchanged for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any reorganization, merger,
consolidation, recapitalization, reclassification, change in par value, stock
split-up, combination of shares or dividend payable in capital stock, or the
like, appropriate adjustment shall be made in the number and kind of shares for
the purchase of which Options may be granted under the Plan, and, in addition,
appropriate adjustment shall be made in the number and kind of shares and in the
option price per share subject to outstanding Options so that each Option holder
shall be in a position equivalent to the position the Option holder would have
been in had the Option holder exercised the Option immediately prior to the
applicable event.

IX. DISSOLUTION OR LIQUIDATION OF THE COMPANY

      Upon the dissolution or liquidation of the Company other than in
connection with a transaction to which the preceding Article VIII is applicable,
all Options granted hereunder shall terminate and become null and void;
provided, however, that if the rights hereunder of an Option holder or one who
acquired an Option by will or by the laws of descent and distribution have not
otherwise terminated and expired, the Option holder or such person shall have
the right immediately prior to such dissolution or liquidation to exercise any
Option granted hereunder to the extent that the right to purchase shares
thereunder has accrued as of the date of exercise immediately prior to such
dissolution or liquidation.

X. TERMINATION OF THE PLAN

      Unless the Committee shall decide to reduce or, subject to shareholder
approval, if required under Article XI, to extend the duration of the Plan, the
Plan shall terminate on December 31, 2002. Termination of the Plan shall not
affect any Options granted or any Option Certificates or agreements executed
prior to the effective date of termination.

XI. AMENDMENT OF THE PLAN


                                   Page 6 of 7


      The Plan may be amended by the Committee or the Board of Directors of the
Company; provided, however, that if the scope of any amendment is such as to
require shareholder approval then such amendment shall require approval by the
shareholders. Any amendment shall not affect any Options theretofore granted and
any Option Certificates or agreements theretofore executed by the Company and
any Option holder unless such amendment shall expressly so provide. No amendment
shall adversely affect any Option holder with respect to an outstanding Option
without the written consent of such Option holder. With the consent of the
Option holder affected, the Committee may amend any outstanding Option
Certificate or agreement in a manner not inconsistent with the Plan, including,
without limitation, to accelerate the date of exercise of any installment of any
Option.

XII. EMPLOYMENT RELATIONSHIP

      Nothing herein contained shall be deemed to prevent the Company or an
Affiliate from terminating the employment or consultancy of any Member, nor to
present any Member from terminating his employment or consultancy with the
Company or an Affiliate.

XIII. EFFECTIVE DATE

      The Plan first became effective on March 6, 1987.

XIV. GOVERNING LAW

      The Plan shall be construed and enforced in accordance with the laws of
The Commonwealth of Massachusetts.

                                  Page 7 of 7

EX-10.44

                                                                   Exhibit 10.44

[BIOGEN LOGO]                                    Vice President, Human Resources
- --------------------------------------------------------------------------------
FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 - 617-679-2000 - FAX 617-679-2617


                                                       PERSONAL AND CONFIDENTIAL


                                 JUNE 11, 1999



Mr. Thomas J. Bucknum
381 Beacon Street
Boston, MA 02116

Dear Tom:

This confirms your discussion with Jim Vincent and me related to your new role
in the organization. Effective June 10, 1999, your new title is Vice President
and General Counsel with a base salary of $225,000 and a target bonus of 30%.
Additionally, you have been granted 25,000 stock options as of June 10, 1999
with a grant value of $2,710,938 (25,000 shares at $108.4375). As an officer of
the company, you will be required to participate in our program for executive
stock ownership. We believe it is very important that our key leaders have
personal stock ownership. I will outline the program to you.

Additionally, in your new role you are now eligible for the following:

1. VACATION - You are entitled to four (4) weeks vacation.

2. SUPPLEMENTAL SAVINGS PLAN: You are entitled to participate in the Voluntary
   Executive Supplemental Savings Plan. This plan allows you to defer from your
   current taxation up to 50% of your base salary and 100% of your 1999 bonus,
   if there is one. Rick Fisher can outline the details of the program if you
   are interested in participating.

3. LIFE INSURANCE: You will be provided Biogen's Executive Term Life Insurance
   coverage for a total of $1,000,000. This coverage is based on your
   successfully meeting the medical standards as stated in the Executive Term
   insurance policy.

4. TAX REVIEW/PREPARATION: You are entitled to the preparation and/or review,
   including review of estimated taxes of your annual Federal and State tax
   returns, which is currently administered through Price WaterhouseCoopers. The
   cost of this service is covered by Biogen.

5. INVOLUNTARY TERMINATION: If you are involuntarily terminated from employment
   with Biogen (other than for cause), Biogen will protect you by paying you a
   supplementary amount (the


[BIOGEN LOGO]

                                                 Vice President, Human Resources

Mr. Thomas J. Bucknum
June 11, 1999
Page 2


  "Supplementary Amount") equal to your then present base salary for a period
  (the "Extra Period") ending on the earlier of (i) the date twelve months
  from your termination and (ii) the date you start another job.  During such
  period, Biogen will also pay to continue your health benefits (i.e., health
  and dental plan coverage), provided such benefits are accorded employees
  generally and Biogen can obtain the relevant coverage.  If you need continued
  coverage to prevent a gap in health coverage between your Biogen coverage
  and that at your new job, Biogen will extend such coverage for up to 30 days
  (to the extent that the Extra Period is less than twelve months) after you
  start your new job.  The Supplementary Amount will be paid on the same
  schedule as your salary would have been paid.  You will not be an employee of
  Biogen during the time of such payments and will not accrue any benefits or
  other rights (such as, but not limited to, pension plan vesting or accrual,
  stock option vesting, vacation pay, etc.) during such period except health
  benefits as described above.  You agree to notify us when you accept a new
  job.


                                      Sincerely,

                                      /s/ Frank A. Burke, Jr.

                                      Frank A. Burke, Jr.
                                      Vice President, Human Resources

EX-10.45

                                                                   Exhibit 10.45

                                                 Vice President, Human Resources






                                 October 19, 2001



Thomas Bucknum
381 Beacon Street
Boston, MA 02116

Dear Tom:

I am pleased to confirm Jim Mullen's conversation appointing you to Executive
Vice President - General Counsel.

This appointment recognizes the increasing importance of your role and your
leadership capabilities.  As an Executive Vice President of Biogen, we know you
will continue to be a key contributor to Biogen's mission, vision, and values.

I am also pleased to note you are eligible for the following compensation and/or
benefits as outlined below.

TARGET BONUS:  Your incentive target is 50% of your base salary.

LONG TERM INCENTIVES:  Biogen has adopted a new approach to communicating and
granting stock options to employees.  You will be eligible for an annual merit
stock option grant, based on a design which emphasizes the future expected
value of the grant.  The details of how we will communicate and value options
will be outlined in December.

CHANGE OF CONTROL:  You have been designated as a "Designated Employee" for
purposes of Biogen's 1985 Non-Qualified Stock Option Plan.  If at any time
within two years following a Corporate Transaction (as defined in the stock
option plan) your employment with Biogen is terminated by Biogen other than for
cause, then each outstanding option held by you will automatically accelerate so
that the option immediately becomes fully exercisable and may be exercised for a
period of one year following the termination of your employment or, if earlier,
until the expiration of the option.  Please read the stock option plan for more
details about the rights of a Designated Employee in the event of a Corporate
Transaction and any applicable limitations.

VACATION:  You are entitled to an additional week of vacation each year.  This
week is over and above the company's normal vacation schedule (which is based
upon years of service).

SUPPLEMENTAL SAVINGS PLAN: You will be entitled to participate in the Voluntary
Executive Supplemental Savings Plan. This plan allows participants to defer
[pretax] base salary and future bonuses.  Enrollment in this plan takes place in
December each year. You will be provided additional information on the plan at
that time.




                                                 Vice President, Human Resources



LIFE INSURANCE:  You will have life insurance coverage that is the greater of
$1,000,000 or three times your annual salary and subject to the normal medical
standards of the life insurance policy.

SEVERANCE:  You will have a minimum severance benefit that is the greater of the
severance outlined in your letter dated June 11, 1999 or the severance outlined
in the Executive Severance document, which has been included with this letter.

EXECUTIVE STOCK OWNERSHIP:  You will be expected to acquire and maintain a
personal financial interest in Biogen.  Ownership is defined as stock held
outright, stock held in the 401(k) plan and stock held under the Employee Stock
Purchase Plan.  Vested but unexercised shares would also be counted toward
ownership guidelines.  You will be required to maintain a financial interest of
six times base salary.  You will have a five-year period from the date of your
appointment to Vice President to obtain this ownership level.

TAX PREPARATION:  You are eligible to have your federal and state income taxes
prepared by PricewaterhouseCoopers.

On behalf of Jim Mullen, please accept my sincere congratulations and best
wishes for future success with Biogen.


                                              Sincerely,




                                              /s/ Frank A. Burke, Jr.

                                              Frank A. Burke, Jr.
/bk
Attachment

EX-10.48

                                                                   EXHIBIT 10.48

                                    ANTEGREN

                DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT

                                     BETWEEN

               BIOGEN, INC. AND ELAN PHARMA INTERNATIONAL LIMITED

                                 AUGUST 15, 2000

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.



Exhibit A    Alpha 4 Integrin
Exhibit B    Financial Planning, Accounting and Reporting for the Elan/Biogen
             Antegren Development and Marketing
             Collaboration Agreement
Exhibit C    Development Plan
Exhibit D    Letter Agreement with Lonza
Exhibit E             ***
Exhibit F    Press Release

Schedule 1.4          Description of Antegren
Schedule 1.9          Biogen Patents
Schedule 1.28         Current Clinical Trials
Schedule 1.35         Elan In-Licenses
Schedule 1.37         Elan Patents
Schedule 4.6(c)       Elan's Pre-Effective Date Development Costs
Schedule 4.8          Third Party Research Agreements
Schedule 7.1(b)(i)    Elan's Commitments to Third Party Contract Manufacturers
Schedule 7.1(b)(ii)   Existing Inventory
Schedule 11.5(a)      Existing Oppositions/Interferences

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       -i-


                                    ANTEGREN

                DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT

      This Antegren Development and Marketing Collaboration Agreement (the
"Agreement") is entered into on this 15th day of August, 2000 by and between
BIOGEN, INC., a Massachusetts corporation, and its Affiliates ("Biogen") and
ELAN PHARMA INTERNATIONAL LIMITED, an Irish private limited company, and shall
be effective as of the HSR Clearance Date or, if no filing is to be made under
the HSR Act, then it shall be effective on the date set forth above (in either
case, the "Effective Date"). Biogen and Elan (as defined below) may each be
referred to herein individually as a "Party" and collectively as the "Parties".

                                    RECITALS

      1. Each Party has an interest in the preclinical and clinical development
of immunoglobulins and antibodies as means of inhibiting the activity of Alpha-4
Integrin (as defined below), a subunit of an alpha-beta heterodimeric
transmembrance glycoprotein implicated in the development of certain diseases,
including multiple sclerosis and inflammatory bowel disease.

      2. Elan has identified a therapeutic with potential value in treating
disease conditions associated with Alpha-4 Integrin, known as Antegren (as
defined below) which is currently in Phase II clinical trials.

      3. By combining their substantial experience and expertise, the Parties
wish, for the exclusive and mutual benefit of both, to work collaboratively to
expedite the development, regulatory approval, and commercialization of
Antegren.

      4. By working together, the Parties wish to reduce cost barriers to
research and development that each would face if acting individually, and to
enable each Party to build and support additional sales, marketing and
promotional expertise that may eventually expand their respective capabilities
with respect to other products.

      5. The Parties believe that a series of collaborations will lower their
costs, expedite the drug approval and delivery process, establish an effective
and efficient manufacturing and distribution system for Antegren, and be the
most efficient and cost effective way of promoting the therapeutic while
expanding each Party's presence in pharmaceuticals markets.

      6. Nothing in the Agreement is intended to limit the right or ability of
each Party independently to conduct research on other products, including other
therapeutics that may be identified for multiple sclerosis and inflammatory
bowel disease, or to manufacture, distribute, market, or promote such other
products.



      7. Elan and Biogen each wish to grant to the other certain exclusive
licenses under each Party's respective intellectual property rights to permit
the other Party to participate in exclusive and mutually beneficial
collaborative development, marketing, co-promotion and sales efforts for
Antegren and to maintain an exclusive collaboration with respect to the Licensed
Products covered by this Agreement.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:

                                   ARTICLE 1.
                                  DEFINITIONS

      The following capitalized terms, whether used in the singular or the
plural, shall have the following meanings as used in this Agreement unless
otherwise specifically indicated:

            1.1 "AFFILIATE(S)" shall mean, with respect to any person or entity,
any other person or entity which controls, is controlled by or is under common
control with such person or entity. A person or entity shall be regarded as in
control of another entity if it owns or controls, directly or indirectly, (i) in
the case of corporate entities at least fifty percent (50%) (or the maximum
ownership interest permitted by law) of the equity securities in the subject
entity entitled to vote in the election of directors and, (ii) in the case of an
entity that is not a corporation, at least fifty percent (50%) (or the maximum
ownership interest permitted by law) of the equity securities or other ownership
interests with the power to direct the management and policies of such subject
entity or entitled to elect the corresponding management authority, provided,
however, that the term "Affiliate" shall not include subsidiaries or other
entities in which a Party or its Affiliates owns a majority of the ordinary
voting power necessary to elect a majority of the board of directors or other
governing board, but is restricted from electing such majority by contract or
otherwise, until such time as such restrictions are no longer in effect.

            1.2 "ALPHA-4 INTEGRIN" shall mean any of those alpha-beta
heterodimeric transmembrane glycoproteins known as integrins where the alpha
subunit chain has the composition known as alpha-4, including, without
limitation, the composition of matter characterized on Exhibit A hereto.

            1.3 "ANNUAL WORKPLAN/BUDGET" shall mean the detailed schedule of
Development activities prepared by the Joint Project Team which sets out the
schedule, nature, and allocation of responsibilities of each Party for
Development work and the agreed upon budget for such activities. The Annual
Workplan/Budget shall be prepared by the Joint Project Team, subject to approval
by the JSC, as specified in Section 4.2.


                                       3


            1.4 "ANTEGREN" shall mean the Licensed Product which is the subject
of the Current Clinical Trials and which is more fully characterized on Schedule
1.4.

            1.5 "ANTEGREN TRADEMARK" shall mean U.S. Registration No. 2,063,937,
the international equivalence thereof or such other trademark, mark or source
designating mark and foreign equivalents as may be agreed to by the JCT and
approved by the JSC for use in connection with Antegren.

            1.6 "ANTICIPATED PHASE III START DATE" shall mean September 2001,
provided, however, that if the technology transfer agreement referenced in
Section 7.1(a) of this Agreement has not been executed by July 21, 2000, the
Anticipated Phase III Start Date shall be such later date as reflects each day
of delay until execution of that agreement.

            1.7 "Biogen Cost" shall mean Biogen's Estimated Per Unit COGs plus
Biogen's Estimated Per Unit Distribution Costs.

            1.8 "Biogen Know-how" shall mean any and all Know-how which is
within the Control of Biogen as of the Effective Date or during the Term of this
Agreement, and (a) is useful for a Party to perform its tasks under this
Agreement, the Development Plan, any associated Annual Workplan/Budget, the
Commercialization Plan, any associated Annual Commercialization Plan/Budget or
(b) is otherwise useful to Promote, market, use, Develop, Commercialize,
manufacture, sell or import Licensed Products in the Field.

            1.9 "Biogen Patents" shall mean any and all Patents that are
Controlled by Biogen as of the Effective Date or during the Term of this
Agreement and (i) that claim Know-how that is necessary or useful to research,
Develop, make, use or sell Licensed Products in the Field or (ii) that claim
Licensed Product or any uses of Licensed Product in the Field or (iii) which
otherwise would, but for this Agreement, be infringed by the Development,
manufacturing and/or Commercialization activities of Elan performed under this
Agreement. The term "Biogen Patents" shall also include Biogen's interest in any
Collaboration Invention Patent Rights and in any Patents owned jointly by the
Parties as provided hereunder. "Biogen Patents" known to be existing as of the
date hereof are listed in Schedule 1.9.

            1.10 "Biogen Percentage" shall mean the percentage specified as the
Biogen Percentage under Section 6.1, as adjusted pursuant to Sections 4.7. The
initial Biogen Percentage shall be *** .

            1.11 "Blocking Third Party Intellectual Property" shall mean, in the
Territory, on a country-by-country basis, a valid patent or patent application
in such country owned or otherwise controlled by a Third Party, in the absence
of a license to which, the Development, manufacture and/or Commercialization of
Antegren or, as

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       4


applicable, other Licensed Product would infringe such patent or a patent that
issues from such patent application.

            1.12 Bulk Supplies" shall mean bulk supplies of Licensed Product in
a suitable form, as specified under this Agreement or under any manufacturing
agreement between the Parties, ready for fill and finish.

            1.13 Calendar Quarter" shall mean the respective periods of three
consecutive calendar months ending on March 31, June 30, September 30 or
December 31, for so long as this Agreement is in effect.

            1.14 "Change of Control" shall mean any of the following: (a) the
sale or disposition of all or substantially all of the assets of a Party or its
direct or indirect parent corporation to a Third Party, (b) the acquisition by a
Third Party which constitutes one person, as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), together with any such person's "affiliates" or "associates", as such
terms are defined in the Exchange Act, other than an employee benefit plan (or
related trust) sponsored or maintained by a Party or any of its Affiliates, of
more than 50% of the outstanding shares of voting capital stock of a Party or
its direct or indirect parent corporation, or (c) the merger or consolidation of
a Party or its direct or indirect parent corporation with or into another
corporation, other than, in the case of this clause (c), an acquisition or a
merger or consolidation of a Party or its direct or indirect parent corporation
in which holders of shares of the voting capital stock of the Party or its
direct or indirect parent corporation, as the case may be, immediately prior to
the acquisition, merger or consolidation will have at least fifty percent (50%)
of the ownership of voting capital stock of the acquiring Third Party or the
surviving corporation in such merger or consolidation, as the case may be,
immediately after the merger or consolidation.

            1.15 "Clinical Supplies" shall mean supplies of Licensed Product in
suitable form, whether manufactured by Lonza or by Biogen, as specified under
this Agreement or under any manufacturing agreement between the Parties,
manufactured in compliance with GMP, if required given the intended use, and
ready to be used for the conduct of pre-clinical and/or human clinical trials of
a Licensed Product in the Field by the Parties pursuant to the Development Plan
and Annual Workplan/Budget.

            1.16 "Clinical Trial Application" shall mean an effective Notice of
a Claimed Investigational New Drug Exemption, as defined in Title 21 of the Code
of Federal Regulations, on file with the FDA before the commencement of clinical
trials of Licensed Products in humans, or any comparable filing with any
relevant regulatory agencies or other governmental entities in any country in
the Territory.

            1.17 "Collaboration Invention" shall mean all Inventions Controlled
by either Party, either alone or jointly with the other Party, which Inventions
are made (meaning that they are conceived during the Term and experimentation
has been initiated during the Term) by either Party's employees, agents or
subcontractors in the performance of such Party's obligations under this
Agreement, regardless of whether such


                                       5


Collaboration Inventions are made solely by such Party's employees, agents or
subcontractors or jointly with the employees, agents or subcontractors of the
other Party.

            1.18 "Collaboration Invention Patent Rights" shall mean Patents
which are Controlled by either Party and which claim Collaboration Inventions.

            1.19 "Combination Product" shall mean a product containing both the
Licensed Product and one or more other active ingredients in addition to the
Licensed Product where the other active ingredients have independent
prophylactic or therapeutic effect when used alone to treat the disease or
indication for which the Combination Product is labeled, whether the Licensed
Product and the other active ingredients are together in a physical mixture or
packaged and priced together as a single product.

            1.20 "Combination Product Amount" shall mean the following: in the
event a Licensed Product is sold in the form of a Combination Product, Gross
Sales or, as applicable, Royalty-Bearing Sales for such Combination Product for
purposes of this Agreement will be determined by multiplying actual Gross Sales
or, as applicable, Royalty-Bearing Sales of such Combination Product by *** ,
where A is the invoice price of the Licensed Product, if sold separately, and B
is the invoice price of any other active component or components in the
combination, if sold separately, in each case in the same country and in the
same dosage as in the Combination Product. If, on a country-by-country basis,
the other active component or components in the combination are not sold
separately in such country, Gross Sales or, as applicable, Royalty-Bearing
Sales, shall be calculated by multiplying actual Gross Sales, or as, applicable,
Royalty-Bearing Sales, of such Combination Product by *** where A is the invoice
price of the Licensed Product if sold separately, and C is the invoice price of
the Combination Product, in each case in the same country and in the same dosage
as in the Combination Product. If, on a country-by-country basis, the Licensed
Product component of the Combination Product is not sold separately in such
country, but the other active component or components are sold separately, Gross
Sales or, as applicable, Royalty-Bearing Sales, shall be calculated by
multiplying actual Gross Sales or, as applicable, Royalty-Bearing Sales, of such
Combination Product by *** where B is the invoice price of the other active
component or components, if sold separately, and C is the invoice price of the
Combination Product, in each case in the same country and in the same dosage as
in the Combination Product. If, on a country-by-country basis, neither the
Licensed Product nor the other active component or components of the Combination
Product is sold separately in such country, Gross Sales, or, as applicable,
Royalty Bearing Sales, for such Combination Product shall be *** .

            1.21 "Commercialization" shall mean any and all activities
constituting importing, marketing, distributing, offering for sale and selling a
Licensed Product in the Field and shall include but not be limited to Promotion
as well as activities required to

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       6


fulfill ongoing regulatory obligations, including adverse event reporting. When
used as a verb, "Commercialize" shall mean to engage in Commercialization.

            1.22 "Commercially Reasonable and Diligent Efforts" shall mean the
level of effort and resources normally used by a Party for a product or compound
owned by it or to which it has rights, which is of similar market potential and
at a similar stage in its development or product life, taking into account,
without limitation, with respect to Licensed Product issues of safety and
efficacy, product profile, the proprietary position of Licensed Product, the
then current competitive environment for the Licensed Product and the likely
timing of the Licensed Product's entry into the market, the regulatory
environment and status of Licensed Product, and other relevant scientific,
technical and commercial factors. Without limiting the foregoing, Commercially
Reasonable and Diligent Efforts as it applies to the Development of Licensed
Products hereunder shall mean adherence to the activities and time lines (to the
extent adherence to such activities and time lines is controllable by the Party
responsible for performing such activities) set forth in the then most current
version of the Development Plan and its associated Annual Workplan/Budget,
subject to delays caused by issues of safety and efficacy and other technical
and scientific issues that may arise or by any other factor outside of the
reasonable control of the responsible Party. Notwithstanding the foregoing, to
the extent that the performance of a Party's responsibilities hereunder is
adversely affected by the other Party's failure to perform its responsibilities
hereunder, such Party shall not be deemed to have failed to use its Commercially
Reasonable and Diligent Efforts in performing such responsibilities.

            1.23 "Commercially Significant Indication" shall mean, with respect
to each Licensed Product, the use of the Licensed Product for the treatment,
diagnosis or prevention of a specific disease or medical condition in humans
where, with respect solely to such specific disease or medical condition, there
is a valid technical rationale for use of Licensed Product in such indication
and the peak sales of Licensed Product alone or as part of a Combination Product
(using a Combination Product Amount-type adjustment), as evidenced by
appropriate market research, are expected to be equal to or greater than *** per
annum in the United States. *** APPROXIMATELY 8 LINES OMITTED ***

            1.24 "Commercial Supplies" shall mean supplies of Licensed Product
in suitable final packaged form, as specified under any manufacturing agreement
between the Parties, manufactured in compliance with GMP, and ready to be
offered for commercial sale for use in the Field in the Territory by Biogen
and/or Elan, and/or their Affiliates, or permitted licensees or sublicensees.

            1.25 "Control" shall mean the possession by a Party of the ability
to grant access to, the right to use, or a license or sublicense, in each case
as provided for in this Agreement, without violating the terms of any agreement
or other arrangement with any Third Party existing at the time such Party would
be required hereunder to grant the other

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       7


Party such access or license or sublicense. "Controlled" shall mean the past
tense of Control.

            1.26 "Co-Promotion" shall mean to Promote jointly a Licensed Product
through Biogen, Elan, their Affiliates, and their respective sales forces, under
a single trademark in the applicable country in the Territory.

            1.27 "Cost of Goods Manufactured For Sale" shall have the meaning
set forth in Exhibit B.

            1.28 "Current Clinical Trials" shall mean the clinical trials
underway as of the Effective Date, as more fully described in Schedule 1.28.

            1.29 "Development" shall mean all activities performed by or on
behalf of either Party pursuant to the Development Plan and each Annual
Workplan/Budget with respect to a Licensed Product in the Field and in the
Territory from March 1, 2000 until Regulatory Approval of a Licensed Product is
obtained for the indication under study. "Development" shall include, without
limitation, all activities related to preclinical testing, test method
development and stability testing, toxicology, formulation, process development,
manufacturing scale-up, qualification and validation, quality assurance/quality
control, clinical studies, regulatory affairs, statistical analysis and report
writing, market research and development and all other pre-approval activities,
each to the extent performed pursuant to the Development Plan and an Annual
Workplan/Budget. When used as a verb, "Develop" shall mean to engage in
Development.

            1.30 "Development Costs" shall have the meaning defined in Exhibit
B.

            1.31 "Development Plan" shall mean the comprehensive plan for (i)
the Development of Antegren or, as applicable, any other Licensed Product,
including, but not limited to activities designed to generate the preclinical,
process development/manufacturing scale-up, clinical and regulatory information
required for filing Drug Approval Applications in the Territory and (ii) the
preparation and submission of Drug Approval Applications. An initial Development
Plan is attached hereto as Exhibit C and incorporated herein, but may be
modified pursuant to Section 4.2, and thereafter will be updated at least
annually by the Joint Project Team, as approved by the JSC, as specified in
Section 4.2. Subject to Section 4.7, the Development budget included as part of
an Annual Workplan/Budget for a particular calendar year shall, within the
limitations provided for in Section 4.6(d), constitute the maximum costs to be
incurred thereunder during such calendar year for Development work, unless such
budget is modified by the Joint Project Team, as approved by the JSC, in
accordance with the terms of this Agreement.

            1.32 "Distribution Costs" shall have the meaning defined in Exhibit
B.

            1.33 "Drug Approval Application" shall mean an application to a
Regulatory Authority for Regulatory Approval of Licensed Product.


                                       8


            1.34 "Elan" shall mean Elan Pharma International Limited, an Irish
private limited company, and those Affiliates which Elan Pharma International
Limited designates to carry out its rights and obligations under this Agreement.

            1.35 "Elan In-Licenses" shall mean the licenses listed on Schedule
1.35, each one an "Elan In-License".

            1.36 "Elan Know-how" shall mean any and all Know-how which is within
the Control of Elan or any of its Affiliates as of the Effective Date or during
the Term of this Agreement, and (a) is useful for a Party to perform its tasks
under this Agreement, the Development Plan, any associated Annual
Workplan/Budget, the Commercialization Plan, any associated Annual
Commercialization Plan/Budget or (b) is otherwise useful to Promote, market,
use, Develop, Commercialize, manufacture, sell or import Licensed Products in
the Field.

            1.37 "Elan Patents" shall mean any and all Patents that are
Controlled by Elan or any of its Affiliates as of the Effective Date or during
the Term of this Agreement and (i) that claim Know-how that is necessary or
useful to research, Develop, make, use or sell Licensed Products in the Field or
(ii) that claim Licensed Product or any uses of Licensed Product in the Field or
(iii) which otherwise would, but for this Agreement, be infringed by the
Development, manufacturing and/or Commercialization activities of Biogen
performed under this Agreement. The term "Elan Patents" shall also include
Elan's interest in any Collaboration Invention Patent Rights and in any Patents
owned jointly by the Parties as provided hereunder. "Elan Patents" known to be
existing as of the date hereof are listed in Schedule 1.37.

            1.38 "Elan Percentage" shall mean the percentage specified as the
Elan Percentage under Section 6.1, as adjusted pursuant to Sections 4.7. The
initial Elan Percentage shall be *** .

            1.39 "Enhancing Third Party Intellectual Property" shall mean, in
the Territory, on a country-by-country basis, a valid patent or patent
application in such country owned or otherwise Controlled by a Third Party, that
covers an invention, which if utilized by the Parties under this Agreement would
facilitate the Development, manufacture or Commercialization of Antegren, or, as
applicable, other Licensed Product and/or could materially enhance the
commercial value of any Licensed Product. For purposes of clarity, Enhancing
Third Party Intellectual Property shall not include Blocking Third Party
Intellectual Property.

            1.40 "Estimated Net Selling Price" as applicable to sales of
Commercial Supplies by Biogen to Elan in any quarter shall mean an amount equal
to total Net Sales for the preceding Calendar Quarter divided by the number of
units of Licensed Product sold by Elan, its Affiliates and permitted
sublicensees during such preceding Calendar Quarter, subject to adjustment, as
determined by the JCT, to reflect any known trends

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       9


with respect to the Calendar Quarter for which the calculation is being made. If
at the time Estimated Net Selling Price is being calculated, Licensed Product
has not yet been launched or has not been on the market for a full quarter, the
JCT shall determine Estimated Net Selling Price based on any total Net Sales and
number of units sold data then available or, if none, a good faith estimate of
anticipated total Net Sales and number of units forecasted to be sold for the
quarter in which launch is anticipated. If the JCT determines to adjust the
frequency of re-calculation of Transfer Price under Section 7.1(e) to other than
a quarterly basis, the references to quarterly amounts in this definition shall
be changed to reflect the period determined by the JCT to be used for the
calculation of Transfer Price.

            1.41 "Estimated Per Unit COGs" as applicable to sales of Commercial
Supplies by Biogen to Elan in any quarter shall mean an amount equal to Biogen's
Cost of Goods Manufactured For Sale for the number of units sold by Elan, its
Affiliates and permitted sublicensees during the preceding Calendar Quarter
divided by the number of units sold during such previous Calendar Quarter,
subject to any adjustment, as determined by the JCT, to reflect any known trends
with respect to the Calendar Quarter for which the calculation is being made. If
at the time the Estimated Per Unit COGs calculation is being made, Licensed
Product has not yet been launched or has not been on the market for a full
quarter, the JCT shall determine Estimated Per Unit COGs based on any Cost of
Goods Manufactured For Sale data then available. If the JCT determines to adjust
the frequency of re-calculation of Transfer Price under Section 7.1(e) to other
than a quarterly basis, the references to quarterly amounts in this definition
shall be changed to reflect the period determined by the JCT to be used for the
calculation of Transfer Price.

            1.42 "Estimated Per Unit Distribution Costs" for a Party as
applicable to sales of Commercial Supplies by Biogen to Elan in any quarter
shall mean an amount equal to such Party's allocable Distribution Costs for the
preceding Calendar Quarter divided by the number of units of Licensed Product
sold by Elan, its Affiliates and permitted sublicensees during such preceding
Calendar Quarter, subject to adjustment, as determined by the JCT, to reflect
any known trends with respect to the Calendar Quarter for which the calculation
is being made. If at the time the Estimated Per Unit Distribution Costs
calculation is being made, Licensed Product has not yet been launched or has not
been on the market for a full quarter, the JCT shall determine Estimated Per
Unit Distribution Costs based on any Distribution Costs and number of units sold
data then available or, if none, a good faith estimate of anticipated
Distribution Costs and number of units forecasted to be sold for the calendar
quarter in which launch is anticipated. If the JCT determines to adjust the
frequency of re-calculation of Transfer Price under Section 7.1(e) to other than
a quarterly basis, the references to quarterly amounts in this definition shall
be changed to reflect the period determined by the JCT to be used for the
calculation of Transfer Price.

            1.43 "Estimated Selling Proceeds" shall mean the Estimated Net
Selling Price less Elan's Estimated Per Unit Distribution Costs.

            1.44 "EU" shall mean the European Union and its member nations as
existing at the relevant point in time.


                                       10


            1.45 "FDA" shall mean the United States Food and Drug Administration
and any successor agency.

            1.46 "FD&C Act" shall mean the U.S. Food, Drug and Cosmetic Act, 21
C.F.R.ss.210 et seq. and the regulations promulgated thereunder, as the same may
be amended from time to time.

            1.47 "Field" shall mean the diagnosis, treatment or prevention of
any medical or disease condition in humans, including, without limitation,
multiple sclerosis or inflammatory bowel disease.

            1.48 "First Commercial Sale" shall mean, in each country in the
Territory, the first sale by Biogen, Elan, or their Affiliates or permitted
sublicensees of a Licensed Product to a Third Party after the required
Regulatory Approval to sell such Licensed Product in that country has been
granted by the relevant Regulatory Authority. A Licensed Product sale shall be
deemed to occur on the earlier of (a) the date the Licensed Product is shipped,
or (b) the date of the invoice to the purchaser of the Licensed Product.

            1.49 "FTE" shall mean a total of forty-seven (47) weeks or 1880
hours per year of work on the Development, manufacturing or Commercialization of
a Licensed Product carried out by employees of a Party having the appropriate
relevant expertise to conduct such activities.

            1.50 "FTE Rate" shall mean the applicable rate per FTE to be applied
by the Parties under this Agreement as set forth in Exhibit B.

            1.51 "GCP" shall mean "Good Clinical Practice" or "GCP". Good
Clinical Practice or GCP shall mean the then current standards for clinical
trials for pharmaceuticals, as set forth in the FD&C Act and applicable
regulations promulgated thereunder, as amended from time to time, and such
standards of good clinical practice as are required by the Regulatory
Authorities of the EU and other organizations and governmental agencies in
countries in which the Licensed Products are intended to be sold, to the extent
such standards are not less stringent than United States GCP, provided that a
Party shall not be held to any standards of good clinical practice that are
different than those standards required by the United States and the EU unless
such standards have been specifically identified and approved for implementation
by the Joint Project Team.

            1.52 "GLP" shall mean the then current standards for laboratory
activities for pharmaceuticals, as set forth in the FD&C Act and applicable
regulations promulgated thereunder, as amended from time to time, and such
standards of good laboratory practice as are required by the Regulatory
Authorities of the EU.

            1.53 "GMP" or "cGMP" shall mean the regulatory requirements for
current good manufacturing practices promulgated by the FDA under the FD&C Act
and under the Public Health Service Act, Biological Products, 21 C.F.R. ss.ss.
600-610 ("PHS Act"), and the regulations promulgated thereunder, as the same may
be amended from time to time, and such standards of good manufacturing practice
as are required by the


                                       11


Regulatory Authorities of the EU and other organizations and governmental
agencies in countries in which the Licensed Products are intended to be
manufactured or sold, to the extent such standards are not less stringent than
United States GMP, provided that a Party shall not be held to any standards
required by countries outside the United States and EU unless such standards
have been identified and approved for implementation by the Joint Project Team.

            1.54 "Gross Sales" shall have the meaning defined in Exhibit B.

            1.55 "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.

            1.56 "HSR Clearance Date" shall mean the earliest date on which the
Parties have actual notice that all applicable waiting periods under the HSR Act
with respect to the transactions contemplated hereunder have expired or have
been terminated.

            1.57 "Invention" shall mean any discovery or other finding that
directly relates to a Licensed Product, the Development of any Licensed Product,
any method of making a Licensed Product or any method of using a Licensed
Product or any uses of Licensed Product in the Field.

            1.58 "Joint Commercialization Team" or "JCT" shall mean that body
established pursuant to Section 3.3 below.

            1.59 "Joint Patent Committee" or "JPC" shall mean that subcommittee
of the Joint Project Team established pursuant to Section 3.4 below.

            1.60 "Joint Project Team" or "JPT" shall mean that body established
pursuant to Section 3.2 below.

            1.61 "Joint Steering Committee" or "JSC" shall mean that committee
established pursuant to Section 3.1 below.

            1.62 "Know-how" shall mean all data, Inventions, methods,
proprietary information, processes, trade secrets, techniques and technology of
a Party (including Confidential Information as defined in Article 10 below),
whether patentable or not but which are not generally known, which directly
relate to Licensed Products or to the manufacture, testing or use of Licensed
Product and are Controlled by such Party as of the Effective Date or hereafter
during the Term of this Agreement, including, but not limited to, discoveries,
formulae, materials, including biological materials, practices, methods,
knowledge, know-how, processes, experience, test data (including
pharmacological, toxicological and clinical information and test data),
analytical and quality control data, marketing, pricing, distribution, cost and
sales data or descriptions. "Know-how" may be made prior to the Effective Date
or during the Term, solely by employees of Elan, solely by employees of Biogen,
jointly by employees of Elan and Biogen, or by Elan or Biogen employees jointly
with a Third Party.


                                       12


            1.63 "Licensed Product" shall mean any formulation (as determined
from time to time in accordance with this Agreement) containing as an active
constituent *** APPROXIMATELY 9 LINES OMITTED *** The term Licensed Product
shall, as applicable, include Antegren. A Licensed Product approved for several
different indications shall be considered a single Licensed Product.

            1.64 "Licensed Product Promotional Materials" shall mean all Sales
Representative training materials and all written, printed, graphic, electronic,
audio or video matter related to the marketing or Promotion of a Licensed
Product, including, but not limited to, journal advertisements, sales visual
aids, direct mail, direct-to-consumer advertising, internet postings, broadcast
advertisements, and sales reminder aids (e.g., scratch pads, pens and other such
items) intended for use or used by a Party in connection with any Promotion.

            1.65 "Lonza" shall mean Lonza Biologics plc.

            1.66 "Major Market Country" shall mean any of the *** .

            1.67 "Marketing Costs" shall have the meaning defined in Exhibit B.

            1.68 "Net Sales" shall have the meaning defined in Exhibit B.

            1.69 "Patent(s)" shall mean any and all patents, patent applications
and any patents issuing therefrom, worldwide together with any extensions,
registrations, confirmations, supplemental protection certificates and other
like forms of patent term extensions, reissues, continuations, divisions,
continuations-in-part, reexaminations, substitutions or renewals thereof.

            1.70 "Patent Costs" shall have the meaning defined in Exhibit B.

            1.71 "Percentage" as to Elan shall mean the Elan Percentage and as
to Biogen shall mean the Biogen Percentage.

            1.72 "Phase I Clinical Trial" shall mean studies in humans to obtain
initial data regarding the safety of Licensed Product.

            1.73 "Phase II Clinical Trial" shall mean studies in humans of the
safety, dose range and efficacy of a Licensed Product which are conducted after
Phase I Clinical Trial of such Licensed Product.

            1.74 "Phase III Clinical Trial" shall mean one or more controlled
studies in humans of the efficacy and safety of a Licensed Product, which is
prospectively designed to demonstrate statistically whether the Licensed Product
is safe and effective for use in a particular indication, in a manner intended
to be sufficient to obtain

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       13


Regulatory Approval to market that Licensed Product and which the Joint Project
Team designates as a Phase III Clinical Trial.

            1.75 "Phase IV Clinical Trial" shall mean any clinical trial in an
indication to be conducted after a Regulatory Approval in such indication which
was mandated by the applicable Regulatory Authority as a condition of such
Regulatory Approval.

            1.76 "Post-Approval Clinical Trial" shall mean any clinical trial in
an indication, other than a Phase III Clinical Trial or Phase IV Clinical Trial,
to be conducted after a Regulatory Approval for such indication.

            1.77 "Pre-Marketing Expenses" shall have the meaning defined in
Exhibit B.

            1.78 "Product Trademark" shall have the meaning set forth in Section
5.3(c).

            1.79 "Promotion" shall mean those activities, including, without
limitation, detailing normally undertaken by a pharmaceutical company's sales
force to implement marketing plans and strategies aimed at encouraging the
appropriate use of a particular Licensed Product in a specific indication. When
used as a verb, "Promote" shall mean to engage in such activities.

            1.80 "Regulatory Approval" shall mean any approvals (including
pricing and reimbursement approvals), licenses, registrations or authorizations
of any federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for the marketing and sale of a Licensed Product
in a regulatory jurisdiction.

            1.81 "Regulatory Authority" shall mean any national (e.g., the FDA),
supra-national (e.g., the European Commission, the Council of the European
Union, or the European Agency for the Evaluation of Medicinal Products
("EMEA")), regional, state or local regulatory agency, department, bureau,
commission, council or other governmental entity in any jurisdiction of the
world involved in the granting of Regulatory Approval for Antegren or, as
applicable, other Licensed Product.

            1.82 Reimbursable Commercial Costs" shall mean Premarketing
Expenses, Marketing Costs, Sales Costs, Other Out-of-Pocket Costs and Ongoing
Development Expense.

            1.83 "Royalty-Bearing Sales" shall mean, with respect to a License
Agreement (as defined in Section 14.2(d)), the gross amounts charged for sales
of Licensed Products by a Party, its Affiliates (which, solely for purposes of
this definition and Section 14.3 and any License Agreement, shall,
notwithstanding the proviso in the definition of Affiliates under Section 1.1,
include any subsidiaries or other entities in which the Party or its Affiliates
owns a majority of the ordinary voting power necessary to elect a majority of
the board of directors or other governing board, whether or not such Party or
Affiliate is restricted from electing such majority by contract or otherwise)


                                       14


and/or its sublicensees, as appropriate, to Third Parties, less the sum of (a)
and (b) where (a) is a provision for (i) reasonable trade, cash and quantity
discounts (other than price discounts granted at time of invoice and which are
already reflected in the determination of the amount charged), (ii) credits or
allowances actually given or made for rejection or return of, previously sold
products or for rebates or retroactive price reductions (including Medicaid,
Medicare, government, commercial and similar types of rebates), (iii) taxes,
duties or other governmental charges levied on or measured by the billing amount
(excluding income and franchise taxes), as adjusted for rebates and refunds,
(iv) charges actually incurred for freight and insurance directly related to the
distribution of the Licensed Product (excluding amounts reimbursed by Third
Party customers), (v) reasonable credits or allowances actually given or made
for wastage replacement and (vi) reasonable allowances for bad debt; and (b) is
a periodic adjustment of the provision determined in (a) to reflect amounts
actually incurred for (i), (ii), (iii), (iv), (v) and (vi). Royalty-Bearing
Sales for Combination Products shall be based on the Combination Product Amount.
A "sale" of a Licensed Product is deemed to occur upon the earlier to occur of
the date the Licensed Product is shipped or the date of the invoice to the
purchaser of the Licensed Product.

            1.84 "Sales Costs" shall have the meaning set forth in Exhibit B.

            1.85 "Sales Representative" shall mean an employee of either Party
or its Affiliates or permitted sublicensees or, as applicable, employee of a
contract sales organization: (a) who is responsible for contacting customers and
others who can buy or influence the buying decision with respect to the
applicable Licensed Product in the applicable country in the Territory, and (b)
whose success at such activities is a significant factor in the ongoing
employment of the individual.

            1.86 "Sample" shall mean a unit of a Licensed Product that is not
intended to be sold and is intended to promote the sale of such Licensed
Product. When used as a verb, "Sample" shall mean to provide Samples to health
care providers.

            1.87 "Territory" shall mean every country, territory, possession or
other political subdivision of the world.

            1.88 "Third Party" shall mean any entity other than Elan or Biogen
or their Affiliates.

            1.89 "Third Party License" shall mean any agreement with a Third
Party for a license under Blocking Third Party Intellectual Property or
Enhancing Third Party Intellectual Property entered into by a Party during the
Term of this Agreement pursuant to Sections 8.3 or 11.9.

            1.90 "Third Party License Fees" shall mean license fees, royalties
and other amounts paid to any Third Party under a Third Party License or an Elan
In-License after the Effective Date.


                                       15


            1.91 "Transfer Price" *** .

            1.92 "United States" or "U.S." shall mean the United States of
America, its territories and possessions, and the Commonwealth of Puerto Rico.

            1.93 Additional Definitions. Each of the following definitions are
found in the body of this Agreement as indicated:



                                                            Section
                                                            -------
                                                         
     "ACQUIRED PARTY"                                       14.7(a)
     "AMA"                                                  5.4(e)
     "AMA GUIDELINES"                                       5.4(e)
     "ANNUAL COMMERCIALIZATION PLAN/BUDGET"                 5.1(c)
     "CLINICAL MANUFACTURING AGREEMENT"                     7.1(c)
     "CLINICAL RESUPPLY CAMPAIGN"                           Exhibit C
     "COLLABORATION AGREEMENT"                              4.8
     "COMMERCIAL MANUFACTURING AND SUPPLY AGREEMENT"        7.1(e)
     "COMMERCIALIZATION PLAN"                               5.1(c)
     "COMMERCIALIZATION TEAM LEADER"                        3.3
     "CONFIDENTIAL INFORMATION"                             10.1
     "CONTRACT SALES ORGANIZATION" OR "CSO"                 5.1(d)
     "COST OF CAPITAL CHARGE"                               Exhibit B
     "DESIGNATED PARTY"                                     5.1(b)
     "DEVELOPMENT COST PROJECT ACCOUNT"                     4.6(b)
     "DISTRIBUTION ACTIVITIES"                              5.6
     "DISTRIBUTING PARTY"                                   5.6
     "DIVESTED ASSETS"                                      14.8
     "DIVESTING PARTY"                                      14.8
     "EXCLUDED INDICATION"                                  4.7(a)
     "FUNCTIONAL CURRENCY"                                  Exhibit B
     "INCLUDED INITIAL PERIOD COSTS"                        4.6(c)
     "INITIAL PERIOD"                                       4.6(c)
     "LICENSE AGREEMENT"                                    14.2(d)
     "LICENSING PARTY"                                      14.2(d)
     "LOSSES"                                               15.1(a)
     "MATERIAL TRANSFER AGREEMENT"                          4.8
     "NOMINATED PRICE"                                      14.7(b)
     "NON-ACQUIRED PARTY"                                   14.7(a)
     "ONGOING DEVELOPMENT EXPENSES"                         Exhibit B
     "OTHER OUT-OF-POCKET COSTS"                            Exhibit B
     "OUTSIDE THE SCOPE INVENTIONS                          11.1(b)
     "PHRMA"                                                5.4(e)
     "PHRMA CODE"                                           5.4(e)


              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       16




                                                            Section
                                                            -------
                                                         
     "PROJECT TEAM LEADER"                                  3.2
     "RECONCILIATION STATEMENT"                             Exhibit B
     "SALES RETURNS AND ALLOWANCES"                         Exhibit B
     "SPLIT ADJUSTMENT OR SPLIT ADJUSTED BASIS"             14.1(b)(i)
     "TERM"                                                 14.1(a)
     "THIRD PARTY RESEARCH AGREEMENTS"                      4.8
     "VALUATION"                                            14.7(c)
     "VALUATION PRICE"                                      14.7(c)


                                   ARTICLE 2.
                           SCOPE OF THE COLLABORATION

            2.1 Collaboration Goals. Pursuant and subject to the terms of this
Agreement, within the Field and the Territory, the Parties agree to: (a) engage
in Development activities with the goal of obtaining Regulatory Approval for
Antegren or, as applicable, other Licensed Product, as soon as reasonably
practicable, in one or more Commercially Significant Indications in each Major
Market Country where it makes commercial sense to do so given the size of the
potential market and the safety and efficacy profile of Licensed Product and (b)
engage in Commercialization of Antegren, or, as applicable, other Licensed
Product, with the goal of optimizing the profit available to each Party. For
purposes of clarity, it is understood by the Parties that the JCT may decide
that it does not make commercial sense for the Parties to Develop or
Commercialize Licensed Product in a particular Major Market Country in a given
indication. Each Party agrees to use Commercially Reasonable and Diligent
Efforts in performing its tasks and responsibilities and in conducting all
activities ascribed or assigned to it under this Agreement, the then current
Development Plan, any Annual Work Plan/Budget, the then current
Commercialization Plan and any Annual Commercialization Plan/Budget. Each Party
shall cooperate with and provide reasonable support to the other Party in
performing its activities with respect to the Development and Commercialization
work contemplated hereunder. Each Party agrees, during the Term, to Develop,
manufacture, Commercialize and Promote Licensed Products only under the terms of
this Agreement. The Parties' intent is to Develop, Commercialize, manufacture
and Promote Antegren or, as applicable, other Licensed Product, as expeditiously
as reasonably practicable with the resources and responsibilities allocated
between the Parties on the basis of each Party's respective capabilities and
availability of adequate capacities, either internally or through such
subcontractors as are customarily used by a Party. Unless otherwise specified in
this Agreement, the guiding principles to be followed by the JSC, the Joint
Project Team and the JCT are as follows: achieve synergy and avoid duplication
of resources; maximize the profitability of Antegren or, as applicable, other
Licensed Product, over its life; and utilize, to the extent practicable, the
then-prevailing infrastructure and expertise of each Party with respect to
specific Development activities and any specific indication and utilize, on a
country-by-country basis, to the extent practicable, the then-prevailing
commercial infrastructure, expertise and track record of each Party in promoting
sales of disease modifying agents in the applicable disease area and for other
Commercialization activities. The Parties shall


                                       17


apply a standard of reasonableness and fairness to each Party and, subject to
the specific terms of this Agreement, shall strive to balance the legitimate
interests and concerns of both Parties, with the goal of realizing the economic
potential of Licensed Product and allowing both Parties to benefit from the
realization of such potential and share in the profitability of Licensed
Product.

            2.2 Exclusive Relationship. Except as expressly set forth in this
Agreement, it is understood and agreed by the Parties that, during the Term, the
Parties shall work exclusively with each other to research, Develop, manufacture
and Commercialize Licensed Products in the Field solely in accordance with the
terms of this Agreement. During the Term of this Agreement, for so long as
Antegren or, as applicable, other Licensed Product, is being researched,
Developed, manufactured and/or Commercialized under this Agreement, neither
Party shall, alone or in collaboration with or through the grant of any rights
to any Third Party, research, Develop, make, import, export, distribute, offer
for sale, or otherwise Commercialize or Develop Antegren or, as applicable,
other Licensed Product, for use as a therapeutic, diagnostic or prophylactic,
except as otherwise permitted under this Agreement. Notwithstanding anything in
this Agreement to the contrary, either Party shall be free to work alone or with
Third Parties to research, develop, manufacture and/or commercialize any product
that is not a Licensed Product in or outside the Field, including any
composition of matter, therapeutic approach or means of treatment based upon
inhibition of Alpha-4 Integrin which is not a Licensed Product. Prior to
entering into a collaboration with a Third Party after the date hereof to
research, develop, manufacture and/or commercialize any composition of matter,
therapeutic approach or means of treatment based upon inhibition of Alpha-4
Integrin with a protein product which is not a Licensed Product, Elan shall
first offer to Biogen the opportunity to include such composition of matter,
therapeutic approach or means of treatment in the mutual and exclusive
collaboration set forth in this Agreement.

                                   ARTICLE 3.
                         MANAGEMENT OF THE COLLABORATION

            3.1 Joint Steering Committee.

                  (a) Establishment of Joint Steering Committee. Within thirty
(30) days of the Effective Date, the Parties will establish a Joint Steering
Committee, or JSC, to oversee and manage the Development and Commercialization
activities contemplated by this Agreement and to be implemented by the Joint
Project Team and Joint Commercialization Team. The JSC will be composed of three
(3) representatives of each Party who shall be appointed (and may be replaced at
any time) by such Party on written notice to the other Party in accordance with
this Agreement. At least two (2) of such representatives from Elan and Biogen,
respectively, shall be a vice-president or more senior officer of such Party and
at least one (1) other of such representatives shall be an individual of
suitable authority and seniority who has significant experience or expertise in
biopharmaceutical drug research, development, commercialization or marketing.
Any member of the JSC may designate a substitute of equal experience and
seniority to attend and perform the functions of that member at any meeting of
the JSC.


                                       18


The JSC will meet at least four times each year during the Term of this
Agreement, or at any other frequency agreed by the JSC.

                  (b) Joint Steering Committee Responsibilities. In addition to
its general responsibilities to oversee and coordinate the Development of
Licensed Products according to the Development Plan and each Annual
Workplan/Budget, to oversee and coordinate the Commercialization of Licensed
Products in the Territory according to the Commercialization Plan and each
Annual Commercialization Plan/Budget and to ensure a regular flow of information
between the Parties, the JSC shall, subject to the terms of this Agreement:

            (I) direct the overall strategy, timing, goals and direction of the
      Development activities specified hereunder and provide direction to the
      Joint Project Team as provided herein;

            (II) review and approve global regulatory and clinical strategies;

            (III) approve the Development Plan and each Annual Workplan/Budget,
      including the division of responsibilities of each Party, and the annual
      budgets and multiyear expense forecasts formulated by the Joint Project
      Team and any material modifications or material amendments to or
      substantial departures from any of the foregoing;

            (IV) review and approve activities related to manufacturing and/or
      the supply of Clinical Supplies or Commercial Supplies, other than
      activities related specifically to Biogen's day-to-day manufacturing
      operations or to Biogen's facilities;

            (V) determine whether completion of a certain activity has, or has
      not, met the criteria for payment of milestones hereunder;

            (VI) determine whether or not the Parties should undertake to
      Develop a Licensed Product other than Antegren and whether or not the
      Parties should proceed with or continue Development in a particular
      indication, subject to Section 4.7;

            (VII) serve as the first forum for attempted settlement of disputes
      or disagreements that are unresolved by the Joint Project Team or Joint
      Commercialization Team and any subteams or subcommittees of such committee
      or of the JSC, unless otherwise indicated in this Agreement;

            (VIII) subject to Article 5, approve a Commercialization Plan and
      each Annual Commercialization Plan/Budget, including but not limited to
      the allocation of responsibilities between the Parties, or as applicable,
      one or more Third Parties, in each country covered thereunder, annual
      marketing and sales budgets, the price range, managed care contract
      strategies, and Phase IV clinical support (including scope and strategic
      direction) as well as any material


                                       19


      modifications or material amendments to or any substantial departures from
      any of the foregoing;

            (IX) review estimates of sales and expenses on a country by country
      and Licensed Product by Licensed Product basis;

            (X) review and approve the determinations of the Joint Project Team
      with respect to the calculations of the presence or absence of a
      Commercially Significant Indication;

            (XI) review and approve patent strategy and, to the extent
      applicable, litigation strategy; and

            (XII) perform such other functions as are allocated to it under the
      other provisions of this Agreement or as appropriate to further the
      purposes of this Agreement as determined by the Parties.

                  (c) Joint Steering Committee Chairpersons; Procedures;
Decisions. The JSC shall have a single Chairperson with customary duties and a
Secretary who is not a member of the JSC. The Secretary shall send notices and
the agendas for all regular JSC meetings. Elan shall designate the initial
Chairperson and Biogen shall designate the initial Secretary. The following
year, Biogen shall designate the Chairperson and Elan shall designate the
Secretary, and thereafter the Parties shall alternate with one Party designating
the Chairperson for a year and the other Party appointing the Secretary for that
year. With respect to the approval or ratification of the decisions or
recommendations of the Joint Project Team or the JCT or approval of the
Development Plan, the Commercialization Plan, each Annual Workplan/Budget and
each Annual Commercialization Plan/Budget or any amendments or modifications
thereto, unless at least one representative of the JSC requests that the matter
be placed to a vote, all such decisions or recommendations presented to the JSC
shall be considered approved or ratified as presented if no objection is made by
any member of the JSC at that time, provided that it is clear to the members of
the JSC that the action being sought from the JSC is approval or ratification.
The location of regularly scheduled JSC meetings shall alternate between the
offices of the Parties (which in the case of Elan shall mean its offices in
South San Francisco), unless otherwise agreed. Meetings may be held
telephonically and shall be effective only if at least one (1) representative of
each Party is in attendance or participating in the meeting. Decisions of the
JSC shall be made by unanimous vote. The senior most attending or participating
representative of each Party on the JSC shall have the right to vote on behalf
of any members of the JSC from such Party not attending or participating in the
meeting. The Secretary shall attend all meetings and record in the minutes in
sufficient detail the discussion and decisions of the JSC. Such minutes shall be
circulated to the Parties promptly following the meeting for review, comment and
distribution.

                  (d) Authority. The Parties agree that, in voting on matters as
described in this Article 3, it shall be conclusively presumed that each voting
member of the JSC has the authority and approval of such member's respective
senior management


                                       20


in casting his or her vote and that decisions of the JSC made in accordance with
this Article 3 shall be binding upon each of the Parties; provided, however,
that the JSC shall not have the authority to amend or modify this Agreement.

                  (e) JSC Reports. Before each meeting of the JSC, either the
Parties, the JPT or the JCT, or any subcommittee, as applicable, will provide
the members of the JSC with written copies of all materials they intend to
present at the JSC meeting. The JSC may also request at any time specific data
or information related to Development or Commercialization activities or that a
written report be prepared in advance of any meeting summarizing certain
material data and information arising out of the conduct of the Development or
Commercial activities and the Party or appropriate committee or team to whom
such request is made shall promptly provide to the other Party or JSC such
report, data or information.

                  (f) Appointment of Subteams or Subcommittees. The JSC shall be
empowered to create such subteams or subcommittees of itself as it may deem
appropriate or necessary. Each such subteam or subcommittee shall report to the
JSC, who shall have authority to approve or reject recommendations or actions
proposed thereby subject to the terms of this Agreement.

                  (g) Dispute Resolution. Issues coming before the JSC that
require action, approval or resolution and for which the JSC is unable to reach
agreement on a mutually acceptable action, approval or resolution shall be
resolved by the Parties under the terms of Article 16 below.

            3.2 Joint Project Team.

                  (a) Establishment of Joint Project Team. Within thirty (30)
days of the Effective Date, the Parties will establish a single Joint Project
Team to coordinate and implement all activities with respect to the Development
of Licensed Products in the Field and in the Territory, including, without
limitation, the Development of Antegren, within the budgets approved under each
associated Annual Workplan/Budget, including pre-clinical research, clinical
research, manufacturing, the strategy for and content of Drug Approval
Applications, and post-approval studies. The Joint Project Team shall consist of
such number of representatives of each Party as are reasonably necessary to
accomplish the goals of the Joint Project Team hereunder. Where possible, the
Joint Project Team shall be composed of an equal number of representatives from
each Party. Such representatives will include individuals with expertise and
responsibilities in the areas of activity testing, toxicology, preclinical
development, clinical development, process sciences, manufacturing, regulatory
affairs, drug safety, product development, quality, marketing and intellectual
property, as appropriate to the stage of Development of Antegren or, as
applicable, other Licensed Products. One such representative from each Party
shall be designated as that Party's "Project Team Leader" to act as the primary
Joint Project Team contact for that Party. Together, the Project Team Leaders
will be jointly responsible for managing the Joint Project Team. Each Project
Team Leader will be responsible for ensuring that his/her Party's Joint Project
Team members carry out the activities assigned them under the Development Plan
and each Annual Workplan/Budget.


                                       21


Either Party may replace any or all of its representatives at any time upon
written notice to the other Party. Any member of the Joint Project Team may
designate a substitute to attend and perform the functions of that member at any
meeting of the Joint Project Team. The Joint Project Team shall be empowered to
create such subteams or subcommittees as it may deem appropriate or necessary.
Each such subteam or subcommittee, including the Joint Patent Committee, subject
to Section 3.4, shall report to the Joint Project Team, which shall have
authority to approve or reject recommendations or actions proposed thereby,
subject to the terms of this Agreement. The Joint Project Team will meet,
telephonically or otherwise, at least once each month, or more frequently, as
agreed by the Joint Project Team.

                  (b) Joint Project Team Responsibilities. The Joint Project
Team shall be responsible, with the oversight and approval of the JSC, for
formulating and executing the specific details of the Parties' Development
collaboration, including, without limitation, preparing for and executing the
Development activities contemplated hereunder. The Joint Project Team shall
prepare the Development Plan and each associated Annual Work Plan/Budget in
accordance with Section 4.2. Except as set forth in Section 4.7, the Joint
Project Team shall also have the responsibility of selecting the criteria for
Development of Antegren or, as applicable, other Licensed Product; making
decisions regarding the design and implementation of all research programs;
selecting and designing clinical trials for all proposed indications; developing
a publication and scientific symposia strategy and a calendar of key scientific
and clinical meetings; conducting market research and development activities
prior to formation of Joint Commercialization Team; devising the content of and
filing strategy for all Clinical Trial Applications and Drug Approval
Applications; through the representatives on the Joint Project Team with
regulatory expertise, coordinating interactions with Regulatory Authorities and,
along with the Joint Commercialization Team, developing and implementing
standard operating procedures for adverse event reporting and compliance with
other regulatory requirements in the Territory, consistent with Article 13;
through the Joint Patent Committee, coordinating patent and trademark-related
activities, subject to Section 3.4; and implementing other activities necessary
to the successful completion of the collaboration and for exchanging information
and facilitating cooperation and coordination between the Parties as they
exercise their respective rights and meet their respective obligations under
this Agreement. In addition to such other reports as required by the JSC, the
Joint Project Team shall submit to the JSC its written determinations of all
Commercially Significant Indications for Antegren or, as applicable, other
Licensed Product, as such determinations are made, and a determination of its
recommendations as to the priority among such indications and the priority among
the countries within the Territory in which the Joint Project Team expects to
seek Regulatory Approval of Antegren, or, as required, other Licensed Product.
The Joint Project Team will be responsible for all other activities assigned to
it by the JSC.

                  (c) Joint Project Team Decision-making. Decisions of the Joint
Project Team shall be made by unanimous vote of the Project Team Leaders. If the
Joint Project Team is unable to resolve a dispute regarding any issue, such
dispute shall be resolved in accordance with Article 16.


                                       22


                  (d) Ceasing of Joint Project Team Operations. The Joint
Project Team will cease operations and have no further function hereunder on the
date on which the Parties are no longer engaging in Development of any Licensed
Product(s) in the Territory.

                  (e) Annual Production Requirements. The Joint Project Team
shall be responsible for submitting annual Antegren or, as applicable, other
Licensed Product, production requirement reports as part of each Annual
Workplan/Budget. Such report shall include a non-binding forecast of
requirements for Clinical Supplies and placebo for the Territory for the then
current year and the following two (2) years, and any other related information
which the Joint Project Team determines to include.

                  (f) Accounting/Financial Reporting. Each Party will appoint a
representative with expertise in the areas of accounting, cost allocation,
budgeting and financial reporting to the Joint Project Team. Such
representatives shall provide services to and consult with the Joint Project
Team in order to address the financial, budgetary and accounting issues which
arise in connection with the Development Plan, each Annual Workplan/Budget and
the Financial Planning, Accounting and Reporting Procedures attached hereto as
Exhibit B, and updates thereto. Each representative may designate a substitute
to perform such functions, or may be replaced at any time by the represented
Party by providing notice thereof to the other Party.

            3.3 Joint Commercialization Team.

                  (A) FORMATION OF THE JCT. At the earlier of either one (1)
year prior to the expected first commercial sale or Antegren or, as applicable,
other Licensed Product or ninety (90) days after the start of any Phase III
Clinical Trial for Antegren or, as applicable, other Licensed Product, a Joint
Commercialization Team, or JCT, will be formed, comprised of an equal number of
representatives of each Party, the total number of which will be between three
(3) and five (5). Each member of the JCT will be an individual with experience
in the commercialization and marketing of pharmaceutical products. The Project
Team Leader of the Joint Project Team for each Party may also be one of the
representatives for such Party on the JCT. One representative from each Party on
the JCT shall be designated as that Party's "Commercialization Team Leader" to
act as the primary JCT contact for that Party. Together, the Commercialization
Team Leaders will be jointly responsible for managing the JCT. Each
Commercialization Team Leader will be responsible for insuring that his/her
Party's JCT members carry out the activities assigned them under the
Commercialization Plan and each Annual Commercialization Plan/Budget. Either
Party may replace any or all of its representatives on the JCT at any time upon
written notice to the other Party. Any member of the JCT may designate a
substitute to attend and perform the functions of that member at any meeting of
the JCT. The JCT will meet, telephonically or otherwise, at least once each
month, or more frequently, as agreed by the JCT.

                  (b) Responsibilities of JCT. The JCT shall, during the
Development of Antegren or, as applicable, other Licensed Product, coordinate
with the Joint Project Team those activities deemed necessary for a successful
Commercialization


                                       23


of Licensed Product in the Territory upon Regulatory Approval. The JCT shall be
responsible for preparing the Commercialization Plan and each Annual
Commercialization Plan/Budget in accordance with Section 5.1, for overseeing and
implementing the activities contemplated thereunder and under Article 5 and for
coordinating with the Joint Project Team in developing and implementing standard
operating procedures for adverse event reporting and compliance with regulatory
requirements in the Territory, consistent with Article 13.

                  (c) JCT Decision-making. Decisions of the Joint
Commercialization Team shall be made by unanimous vote of the Commercialization
Team Leaders. If the Joint Commercialization Team is unable to resolve a dispute
regarding any issue, such dispute shall be resolved in accordance with Article
16.

                  (d) Annual Production Requirements. The Joint
Commercialization Team shall be responsible for submitting annual Antegren or,
as applicable, other Licensed Product, commercial production requirement reports
as part of each Annual Commercialization Plan/Budget. Such report shall include
a non-binding forecast of requirements for Commercial Supplies for the Territory
for the then current year and the following two (2) years, and any other related
information which the JCT determines to include.

                  (e) Accounting/Financial Reporting. Each Party will appoint a
representative with expertise in the areas of accounting, cost allocation,
budgeting and financial reporting to the Joint Commercialization Team. Such
representatives shall provide services to and consult with the Joint
Commercialization Team in order to address the financial, budgetary and
accounting issues which arise in connection with the Commercialization Plan,
each Annual Commercialization Plan/Budget and the Financial Planning, Accounting
and Reporting Procedures attached hereto as Exhibit B, and updates thereto. Each
representative may designate a substitute to perform such functions, or may be
replaced at any time by the represented Party by providing notice thereof to the
other Party.

                  3.4 Joint Patent Committee. Within thirty (30) days after the
Effective Date, Biogen and Elan shall establish a "Joint Patent Committee" or
"JPC", as a subcommittee of the Joint Project Team, to oversee and direct the
continued prosecution of Elan Patents and Biogen Patents and the preparation and
filing of Collaboration Invention Patent Rights, subject to the terms of Article
11. The JPC shall be comprised of one (1) senior patent attorney from each Party
as appointed by such Party. A Party may replace its representative from time to
time upon written notice to the other Party. The JPC shall exist until the
termination of this Agreement, provided that at such time as the Joint Project
Team no longer exists, the JPC shall become a subcommittee of the Joint
Commercialization Team. All decisions of the JPC shall be unanimous, and in the
event that a decision cannot be reached by the JPC, the matter shall be referred
to the Joint Project Team. In the event that the Joint Project Team is unable to
reach a decision with respect to any such matter, then such matter shall be
resolved in accordance with Article 16.


                                       24


            3.5 Meetings of Chief Executive Officers. The Chief Executive
Officers (CEOs) of Biogen and Elan Corporation, plc, or their designated
direct-reporting representative, shall meet two (2) times per year during the
term of this Agreement, unless otherwise agreed upon in writing by the Parties.
In such meetings, the CEOs shall review the progress of the collaboration and
shall discuss any current issues of the collaboration with the intent of
proposing resolutions for such issues. Meetings, including without limitation,
special meetings called pursuant to Section 16.1 shall alternate between the
offices of the Parties, unless otherwise agreed by the CEOs or their respective
representatives, or may be held telephonically or by videoconference.

                                   ARTICLE 4.
                                  DEVELOPMENT

            4.1 Development Efforts. Through the Joint Project Team, Elan and
Biogen each agree to collaborate exclusively and diligently with each other in
the Development of Antegren or, as applicable, other Licensed Products in the
Field and to use Commercially Reasonable and Diligent Efforts to Develop and
bring Antegren or, as applicable, other Licensed Product, to market in the Field
in Commercially Significant Indications as deemed appropriate by the Joint
Project Team. The Parties agree to cooperate with each other in carrying out the
Development Plan and each Annual Workplan/Budget. Development activities will,
to the extent practicable, utilize the then-prevailing development
infrastructure and expertise of each Party in a given activity or with respect
to a specific Commercially Significant Indication. All activities to be
undertaken in the performance of the Development Plan and each Annual
Workplan/Budget shall be carried out by employees of the Parties and/or their
respective Affiliates, provided, however, that if either Party is able to
reasonably demonstrate, and the Joint Project Team agrees, that it would be in
the best interests of both Parties for the responsible Party to contract with
one (1) or more Third Parties to perform certain tasks under the Development
Plan, then, the Party responsible for such task may enter into a contract with a
Third Party to perform such task, which such Third Party and contract shall be
subject to the prior written approval of the Joint Project Team. In determining
whether to utilize the services of any Third Party in conducting activities
under the Development Plan, the Parties shall consider, inter alia, what would
be the most efficient and cost-effective means for accomplishing the proposed
activity, any relevant intellectual property issues that may impede a Third
Party's ability to perform the proposed activity or that may warrant limiting
the performance of the proposed activity to one of the Parties, and other
relevant factors. The responsibility for performing clinical studies will be
assigned to Biogen, Elan and/or approved Third Party contractors selected by the
Joint Project Team in accordance with this Section 4.1.

            4.2 Development Plan and Responsibilities

                  (a) Initial Development Plan. The Parties have attached as
part of Exhibit C hereto an initial Development Plan, the goals of which are:
(i) the Development (including further clinical testing) of Antegren as required
to obtain Regulatory Approval for one or more Commercially Significant
Indications in each Major Market Country (other than Japan which shall be
addressed in subsequent updates)


                                       25


as promptly as commercially and technically practicable, or as otherwise deemed
appropriate by the Joint Project Team; (ii) the acquisition of Regulatory
Approval for Antegren in a manner sufficient to allow the commercial promotion,
marketing and sale of Antegren in those countries of the Territory where it
makes commercial sense to do so given the size of the potential market and other
relevant factors; (iii) the identification, selection and Development of
additional Licensed Products if appropriate and (iv) the formation and transfer
to Biogen of the information and capabilities necessary to manufacture and
supply Clinical Supplies and Commercial Supplies of Antegren, or, as applicable,
other Licensed Product, for such Development and Commercialization, including,
but not limited to, the initial transfer of manufacturing Know-how by Elan and
Lonza to Biogen in accordance with Section 7.1 and the timeline for such
transfer set forth in the Development Plan.

                  (b) Initial Annual Workplan/Budget. The Joint Project Team
shall, within sixty (60) days of the execution date, prepare a draft of an
Annual Workplan/Budget for 2000, specifying in detail the Development activities
to be performed during the year, designation of which Party is responsible for
each task, staffing levels (which levels shall be reasonably necessary for the
attainment of the Development goals, as applicable), any approved use of Third
Party contractors required to carry out such activities, a budget setting forth
the estimated expenditures required to carry out such activities and a timeline
for completion of such activities. Should the Joint Project Team determine that
a specific activity would be best undertaken by a Third Party contractor, the
Joint Project Team shall indicate which Party shall manage such Third Party
contractor. The final Annual Workplan/Budget for 2000 shall be approved by the
JSC by the end of August 2000.

            (c) Yearly Updates and Subsequent Annual Workplans/Budget. The Joint
Project Team shall, on an annual basis, update the Development Plan to reflect
any changes necessary given the progress and the results of the Development work
as of such date or any change in strategy, timelines, or long range plans going
forward. In addition, prior to the start of each year, the Joint Project Team
shall prepare an Annual Workplan/Budget which shall specify in detail the
Development activities to be performed during such year, designation of which
Party is responsible for each task, staffing levels (which levels shall be
reasonably necessary for the attainment of the Development goals, as
applicable), any approved use of Third Party contractors required to carry out
such activities, a budget setting forth the estimated expenditures required to
carry out such activities, a timeline for completion of such activities and
annual production requirements, as specified in Section 3.2(e). Should the Joint
Project Team determine that a specific activity would best be undertaken by a
Third Party contractor, the Joint Project Team shall indicate which Party shall
manage such Third Party contractor. Each update to the Development Plan and
adoption of each Annual Workplan/Budget under this paragraph and any
modifications and updates under paragraph (d) below shall automatically be
deemed to constitute an amendment to Exhibit C upon JSC approval and
ratification of the meeting minutes related thereto, and shall not constitute an
obligation of either Party until such approval and ratification. The schedule
for yearly updates to the Development Plan and the drafting and approval of each
Annual Workplan/Budget commencing with the Year 2001, is as follows:


                                       26




                         EVENT                                       TIMING
                         -----                                       ------
                                                                  
     Yearly Development Plan update by the Joint                     May 15
           Project Team

     Draft of Annual Workplan/Budget for each                        September 15 of prior year
           year together with any necessary updates
           to the Development Plan prepared by
           Joint Project Team

     Approval of Development Plan update and                         Meeting of JSC next following
           Annual Workplan/Budget by JSC                             date when the plans are available


                  (d) Interim and Annual Workplan/Budget Modifications and
Updates. The Joint Project Team shall review each Annual Workplan/Budget on a
quarterly basis during the course of each year to review actual activities and
expenditures compared to plan and to determine if any changes are necessary
given the progress and the results of the Development work as of such date.
Other interim modifications to each Annual Workplan/Budget during the course of
the year may also be adopted by the Joint Project Team, as necessary, but shall
be subject to the approval of the JSC if material. All changes to any Annual
Workplan/Budget shall be subject to review and approval of the JSC where such
modifications exceed the authority delegated to the Joint Project Team by the
JSC or under this Agreement.

                  (e) Responsibilities. Consistent with its responsibilities
under this Agreement, the Development Plan and each Annual Workplan/Budget, each
Party agrees to use Commercially Reasonable and Diligent Efforts to:

            (I) transfer to the other Party all Know-how in such Party's
      possession that the Joint Project Team deems useful for the Development of
      Antegren or, as applicable, other Licensed Products, including but not
      limited to preclinical data, assays and associated materials, protocols
      and procedures, provided that, notwithstanding anything in this Agreement
      to the contrary, the initial transfer of Know-how from Elan to Biogen
      shall include, but shall not be limited to, all manufacturing Know-how, as
      specified in Section 7.1, reasonable quantities of Antegren for research,
      Development and manufacturing scale-up work, all existing preclinical
      data, regulatory filings, and all existing clinical trial protocols and
      data, to the extent such Know-how is not already in Biogen's possession;

            (II) in accordance with the Development Plan and any associated
      Annual Workplan/Budget, conduct or, as applicable, assist the other Party
      to conduct, all relevant studies, including human clinical studies for
      Antegren or, as applicable, other Licensed Products; and

            (III) in accordance with the Development Plan and any associated
      Annual Workplan/Budget and Section 4.4, make or, as applicable, assist the
      other Party in making, all filings with and supporting all communications
      with the


                                       27


      relevant regulatory agencies or other governmental entities necessary to
      conduct such studies or to seek Regulatory Approvals for Antegren, or as
      required, other Licensed Products.

            4.3 Clinical Trials. The Parties will conduct clinical trials for
Licensed Products in accordance with the Development Plan and each Annual
Workplan/Budget. Except to the extent otherwise required by relevant regulatory
agencies or other governmental entities, there shall be one Clinical Trial
Application in each country for all clinical trials for each distinct Licensed
Product. All clinical data and reports related to clinical trials for Licensed
Products shall be jointly owned by the Parties, and each Party shall have full
use, for any purpose consistent with this Agreement, of all such data and
reports related to clinical trials for Licensed Products. All data, database
information and reports from such clinical trials for Licensed Products shall be
centralized and held at a location to be chosen by the Joint Project Team, with
a duplicate set available to each Party for deposit at a site of its own
selection.

            4.4 Clinical Trial Applications, Drug Approval Applications, Package
Labels and Inserts.

                  (a) The Joint Project Team shall determine which Party shall
be responsible for filing all Clinical Trial Applications. Notwithstanding the
foregoing, Elan shall continue to hold the existing INDs with respect to
Antegren, provided that, within twelve (12) months after the Effective Date the
Joint Project Team shall reconsider the assignment of responsibility for the
existing INDs based on the allocation of related clinical responsibilities.
Unless the JSC determines that it would be more efficient for one Party to file
and hold Drug Approval Applications and Regulatory Approvals worldwide, Elan
shall, with the oversight of the Joint Project Team, be responsible for filing
Drug Approval Applications and seeking Regulatory Approvals for Licensed
Products worldwide except in North America and Japan, and Biogen shall, with the
oversight of the Joint Project Team, be responsible for filing Drug Approval
Applications and seeking Regulatory Approvals in North America. The JSC shall
allocate responsibility for filing and holding Drug Approval Applications and
Regulatory Approvals for Licensed Product in Japan, provided that such filing
shall be subject to the oversight of the Joint Project Team. Notwithstanding the
foregoing, in the event that the Joint Project Team determines to cease
development of Licensed Product in IBD but continues development in MS, Elan
shall assume responsibility for filing Drug Approval Applications and seeking
Regulatory Approvals for Licensed Product worldwide, subject to the oversight of
the Joint Project Team. The Party responsible for filing a Clinical Trial
Application or Drug Approval Application in a given jurisdiction (the "Filing
Party") shall also comply with all regulatory obligations in such jurisdiction
arising from any of the foregoing, subject to the terms of this Agreement. The
Filing Party shall use Commercially Reasonable and Diligent Efforts in
performing the activities contemplated under this Agreement, and shall perform
such activities with the oversight of the Joint Project Team and in accordance
with the Development Plan and each Annual Workplan/Budget. Prior to submitting
any Clinical Trial Application or Drug Approval Application, the Parties,
through the Joint Project Team, shall consult and cooperate in preparing such
filings, their content and scope. Each Party shall have the right to review


                                       28


and comment on all Clinical Trial Applications and Drug Approval Applications in
accordance with specific timelines or other arrangements agreed upon by the
Joint Project Team, and no such filing shall be made unless the Joint Project
Team has approved the form and content of the filing. Unless otherwise required
by relevant Regulatory Authorities, all regulatory documents shall be
centralized and held at a location to be chosen by the Joint Project Team, with
a duplicate set provided to each Party for deposit at a site of its own
selection. Unless otherwise specified by the Joint Project Team and subject to
the terms of this Agreement, the Filing Party shall own all regulatory
submissions, including all Clinical Trial Applications, Drug Approval
Applications and associated government licenses, approvals, and certificates for
Licensed Products in the Territory. Notwithstanding the foregoing, in any
jurisdiction, including the EU, in which, based on the written opinion of an
attorney of the Parties' mutual selection who is expert in the applicable laws
or regulations of the jurisdiction at issue or based on consultation with the
applicable Regulatory Authority, the Parties determine that formation of a joint
venture entity or entities to hold the applicable Drug Approval Applications or
other governmental licenses, approvals or certificates for Licensed Products is
the sole means by which the names of both Parties may appear on the label of a
Licensed Product and/or the applicable Licensed Product Promotional Materials,
the Parties, upon the written request of either Party, shall form and transfer
ownership of the applicable Drug Approval Applications or other governmental
licenses, approvals or certificates for Licensed Products to such joint venture
entity or entities. Prior to any transfer under this Section 4.4(a), the Parties
shall negotiate in good faith as to the necessity of the formation of such an
entity or entities and shall consider in preference thereto all commercially
reasonable alternatives. Each and every entity formed pursuant to this Section
4.4(a) shall be constituted in a form mutually acceptable to both Parties, shall
be jointly owned and controlled by the Parties and shall undertake no business
other than holding the applicable Drug Approval Applications or other
governmental licenses, approvals, or certificates for Licensed Products. The
Parties agree to take all commercially reasonably steps required to eliminate or
minimize the tax effects on either Party arising out of the formation of any
entity or entities pursuant to this Section 4.4(a).

                  (b) The Filing Party shall not transfer title or otherwise
attempt in any manner to dispose of any Clinical Trial Applications or Drug
Approval Applications or other government licenses, approvals or certificates
for Licensed Products in the Territory, or otherwise impair the other Party's
rights in such filings, or other government licenses, approvals or certificates.

                  (c) The Filing Party shall provide the other Party with a copy
of any material documents or reports to be filed with the FDA or any other
Regulatory Authority under this Agreement. The Joint Project Team shall approve
all such material documents or reports prior to filing. Other communications and
interactions of either Party with Regulatory Authorities related to Licensed
Product shall be subject to the terms of Section 4.5.

                  (d) The Parties will include on all package labels and inserts
for Licensed Products sold in the Territory the names and logos of both Elan and
Biogen with equal prominence, to the extent permitted by the applicable
Regulatory Authorities.


                                       29


To the extent the names and logos of both Elan and Biogen cannot, without
violating applicable law, be included with equal prominence on package labels
and inserts in a particular country under the current terms of this Agreement,
the Parties shall discuss in good faith possible modifications to the terms of
this Agreement that would allow the inclusion of both logos in compliance with
applicable law.

                  (e) The content and language of the proposed package insert,
and all changes thereto, including without limitation, all safety-related
package insert changes for Licensed Product shall be agreed upon by the Joint
Project Team prior to submission to the applicable Regulatory Authority.

            4.5 Regulatory Meetings and Communications.

                  (a) For each country in the Territory, unless the Joint
Project Team otherwise specifies, the Parties shall be jointly responsible for
conducting meetings and discussions related to Licensed Products with the
Regulatory Authorities in each country of the Territory. Each Party shall be
given the opportunity to have one or more of its representatives participate in
all substantive discussions and meetings with Regulatory Authorities which
relate to Licensed Products, including, but not limited to, with respect to any
Drug Approval Applications.

                  (b) The Joint Project Team, through its members with
regulatory and drug safety expertise, shall develop processes and procedures for
the conduct and reporting to the Parties of telephone communications and written
correspondence with Regulatory Authorities in the Territory related to Licensed
Product. To the extent either Party receives material written or oral
communication from the FDA or any other Regulatory Authority relating to
Licensed Products, the Party receiving such communication shall notify the other
Party and provide a copy of any written communication to the other Party as soon
as reasonably practicable.

                  (c) Within sixty (60) days after the Effective Date, the
Parties' respective regulatory affairs or other applicable departments,
including the members of the Joint Project Team with regulatory and drug safety
expertise, shall meet and agree upon processes and procedures to recommend to
the Joint Project Team for sharing information needed to support each Party's
respective regulatory responsibilities, including without limitation,
development of appropriate safety databases relating to Antegren, or, as
applicable, other Licensed Products. The processes and procedures adopted by the
Joint Project Team under this Section for sharing of information and adverse
event reporting shall be consistent with Article 13.

                  (d) The Parties shall cooperate in good faith with respect to
the conduct of any inspections by any Regulatory Authority of a Party's site and
facilities related to Licensed Products, and each Party shall at a minimum be
given the opportunity to attend the summary, or wrap up, meeting related to
Licensed Products with such Regulatory Authority at the conclusion of such site
inspection. Each Party shall consider the attendance of the other Party at any
such regulatory inspections, but shall not be obligated to accept the other
Party's attendance at such inspections if such attendance


                                       30


would result in the disclosure to the other Party of confidential information or
trade secrets unrelated to the Licensed Products.

            4.6 Development Costs.

                  (a) Payment of Development Costs. All Development Costs,
except those otherwise specifically excluded under this Section 4.6 and in
Section 4.7 of this Agreement, for activities conducted under this Agreement,
including without limitation all Development Costs related to physical product
development and manufacturing, preclinical studies and clinical studies, shall
be shared between Biogen and Elan as provided below and in accordance with the
Financial Planning, Accounting and Reporting Procedures attached hereto as
Exhibit B, so that Biogen bears *** of such costs and Elan bears *** of such
costs, provided that such costs were part of an Annual Workplan/Budget or were
otherwise approved by the JSC. There shall be a Reconciliation Statement,
prepared by the finance representatives of the Parties on the Joint Project Team
as set forth in Exhibit B, of such costs which are to be shared and which are
incurred during a reporting period by each Party, in accordance with Section
A.2.2 of Exhibit B, with a payment by one Party to the other, within thirty (30)
days of receipt of the Reconciliation Statement, to the extent necessary so that
each Party bears its appropriate percentage of such shared Development Costs.

                  (b) Development Cost Accounts. Subject to the limitations set
forth in this Section 4.6 and in Section 4.7, each Party shall charge all
Development Costs so incurred by it or its Affiliates on its books and records
to enable the tracking of expenses incurred in connection with the Development
Plan and each Annual Workplan/Budget (each, a "Development Cost Project
Account"). Within fourteen (14) business days after the end of each Calendar
Quarter, each Party shall submit to the other Party a written summary of all
expenses charged to its Development Cost Project Account during such Calendar
Quarter, which summary shall be accompanied by reasonable supporting
documentation for such expenses.

                  (c) Initial Period Costs. Notwithstanding anything in this
Agreement to the contrary, during the period commencing on March 1, 2000 and
ending on December 31, 2000 (the "Initial Period"), the Development Costs to be
shared by the Parties under Section 4.6 (a) shall include solely ***
APPROXIMATELY 7 LINES OMITTED ***, as set forth in the Annual Workplan/Budget
for 2000 (collectively "Included Initial Period Costs"). All other Development
Costs incurred during the Initial Period shall be borne by the Party incurring
such costs and shall be excluded from the Development Costs to be shared by the
Parties under Section 4.6(a). The Parties further agree that the Development
Costs charged by Elan to its Development Cost Project Account for out-of-pocket
costs related to goods and services provided or activities performed by Third
Parties for the period from March 1, 2000 until the date of this Agreement shall
not exceed the amounts set forth in Schedule 4.6(c).

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       31


                  (d) Expense Limitations. The expenses charged by either Party
to its Development Cost Project Account in accordance with this Agreement for
any year shall not be in an amount in excess of *** of the amount included for
the total expenditures in the then current Development Plan and Annual
Workplan/Budget, as appropriate, unless the Joint Project Team recommends and
the JSC approves such excess expenses. If actual costs of implementing an Annual
Work Plan/Budget or the Development Plan are expected to vary by more than ten
percent (10%) from the amounts budgeted for expenditure during the relevant
period, the Joint Project Team will revise, as applicable, the Annual
Workplan/Budget or Development Plan and submit it in writing, with an
explanation of the variance and the reasons therefore, for approval to the JSC.
If the JSC does not approve the variance, the amount by which the actual costs
exceed *** of the budgeted costs shall be borne by the Party that incurred the
costs.

                  (e) Third Party License Fees. Until such date as Antegren, or
as applicable, other Licensed Product, is Commercialized in the Territory the
Parties *** of any Third Party License Fees relating thereto. The Party paying
any Third Party License Fee shall invoice the other Party for its share of such
Third Party License Fee within sixty (60) days after the date of payment. The
Party receiving such invoice shall reimburse the other Party for its share of
such Third Party License Fees within forty-five (45) days after receiving the
invoice therefor. After the date when Antegren, or as applicable, other Licensed
Product, is Commercialized in the Territory, Third Party License Fees shall be
treated as "Other Out of Pocket Costs" under Exhibit B.

                  (f) Records and Audits. During the term of this Agreement,
each Party shall keep and maintain accurate and complete records showing the
expenses incurred by it in performing its activities under the Development Plan
and each Annual Workplan/Budget during the three (3) preceding calendar years,
which books and records shall be in sufficient detail such that Development
Costs can accurately be determined. Each Party shall have audit rights with
respect to such records of the other Party as set forth in paragraph A.6 of
Exhibit B.

            4.7 Development Opt-Out.

                  (a) Every Commercially Significant Indication shall be
considered as a potential indication for the Development of Licensed Products by
the Joint Project Team. In the event a Party desires to pursue a Commercially
Significant Indication, other than MS or IBD, for Development, the other Party
may, by providing a written notice to the Party desiring to proceed, cause any
Development Costs associated solely and exclusively with such Commercially
Significant Indication (an "Excluded Indication") to be exempted from the
provisions of Section 4.6 of this Agreement. For any Excluded Indication, the
Party desiring to proceed may continue, at its own cost and within its sole
control, to Develop such Excluded Indication. The Party proceeding with
Development in an Excluded Indication shall keep the Joint Project Team
reasonably informed of the plan for Development, the progress of Development
activities and the

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       32


results obtained from Development activities in the Excluded Indication. In
addition, notwithstanding anything in this Agreement to the contrary, the Party
proceeding with Development in an Excluded Indication shall consult with the
Joint Project Team and consider in good faith the input of the Joint Project
Team with respect to any decision or action related to Development of Licensed
Product in the Excluded Indication to the extent such decision or action may
have an impact on the Parties' ability to proceed with Development of Licensed
Product in another indication or on the Parties' ability to obtain Regulatory
Approval for Licensed Product in another indication or which may result in
material safety concerns or other issues being raised that might materially
adverse affect the value of Licensed Product in other indications.

                  (b) The Party desiring to proceed in an Excluded Indication
shall be responsible for preparing the Drug Approval Application for such
Excluded Indication, provided that the filing shall be subject to the approval
of the Joint Project Team under the terms of Section 4.4, and shall actually be
filed by the Party responsible for regulatory filings under Section 4.4(a).

                  (c) For each Excluded Indication Developed by a Party,
commencing upon the date of First Commercial Sale in a Major Market Country with
respect to the Excluded Indication, the other Party shall have its Percentage
reduced by *** from its then current level. Should a Party whose Percentage is
subject to reduction pursuant to this Section 4.7 Develop Licensed Product in a
different Excluded Indication, then, on a matching basis, the reduction shall
cease upon the date of First Commercial Sale in a Major Market Country in such
different Excluded Indication. Additionally, with respect to each Excluded
Indication, should a Party whose Percentage is subject to reduction pay, within
*** of the First Commercial Sale with respect to such Excluded Indication, to
the other Party an amount equal to *** of the total Development Costs related to
such Excluded Indication which but for Section 4.7(a) would have been charged to
the developing Party's Development Cost Account under Section 4.6, the reduction
specified hereunder as a result of such Excluded Indication shall thereafter
become *** . In no event shall the cumulative effect of this Section 4.7 be to
reduce a Party's Percentage by an amount more than *** . Where on Party's
Percentage is reduced pursuant to the operation of this Section 4.7(c), there
shall be a corresponding and equal increase in the other Party's Percentage.

            4.8 Third Party Research Agreements.

                  (a) Biogen acknowledges that, as of the Effective Date, Elan
has certain existing material transfer agreements and collaboration agreements
involving use of Licensed Product with academic investigators or governmental
research institutions ("Third Party Research Agreements"). The Third Party
Research Agreements involving transfer of Antegren executed during the last
three (3) years are as listed in Schedule 4.8. Each Party acknowledges that the
other Party is required to fulfill its respective commitments under such Third
Party Research Agreements. Such commitments may

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       33


include providing investigators with research quantities of Antegren or, as
applicable, other Licensed Product for research purposes. Each Party agrees
that, to the extent required by the applicable Third Party Research Agreement,
the other Party may continue its existing commitments under such Third Party
Research Agreements for up to one year from the Effective Date, or as agreed
upon by the Joint Project Team, so long as no such commitments hinder a Party's
ability to fulfill its responsibilities under the Development Plan or any Annual
Workplan/Budget. Consistent with the responsibilities set forth in this
Agreement, and with the consent of the appropriate Third Party, if required,
each Party agrees promptly to provide the other Party with all data, reports and
information related to the Licensed Product in the Field that such Party
receives under such Third Party Research Agreements. After the Effective Date,
the Parties shall, through the Joint Project Team, agree upon and coordinate
subsequent Third Party material transfer and collaboration agreements with
academic or governmental research institutions related to Development of
Licensed Product or involving the use of Licensed Product, and amendments or
extensions of the existing Third Party Research Agreements in a manner so as to
conserve the available quantities of the Parties' research materials and to
avoid compromise of the Parties' abilities to fulfill their responsibilities
under the Development Plan or any Annual Workplan/Budget and with a view toward
maintaining access to relevant intellectual property rights. Any such subsequent
Third Party agreements shall be in a form of a "Material Transfer Agreement"
and/or a "Collaboration Agreement" to be agreed upon by the Parties.

                  (b) In the event that any Third Party Research Agreement, or
any Material Transfer Agreement or Collaboration Agreement entered into after
the Effective Date results in an invention or know-how made, jointly or solely,
by a Third Party that relates to Licensed Products, the Joint Project Team shall
determine whether a license (exclusive or non-exclusive) should be obtained
under the rights of such Third Party to such invention or know-how in accordance
with Section 11.9. If the invention or know-how resulting from the Third Party
Research Agreement or Material Transfer Agreement or Collaboration Agreement has
applicability outside the scope of this Agreement, and both Parties desire to
have access to such invention or know-how for uses outside the scope of this
Agreement, the Parties shall ensure that they each have the opportunity to
separately license the rights to such invention or know-how.

            4.9 Transfer of Materials. During the collaboration hereunder, the
Parties anticipate that each Party will transfer certain of its proprietary
materials to the other Party. Each Party agrees that it will use such materials
of the other Party only for the purposes of the collaboration hereunder, and
will not transfer such materials to any Third Party without the consent of the
other Party except as expressly permitted under this Agreement. Each Party shall
have the right to use proprietary materials made or assembled by either Party
during and in furtherance of the collaboration hereunder, and which are directly
related to Licensed Product solely for the purposes of the collaboration
hereunder, including without limitation, the right to transfer such material to
Third Parties, with consent of the JPT, under the form of Material Transfer
Agreement or Collaboration Agreement agreed upon by the Parties pursuant to
Section 4.8(a) above or as otherwise specifically approved as part of an Annual
Workplan/Budget.


                                       34


            4.10 COMPLIANCE WITH GLP/GCP AND APPLICABLE LAWS. In performing
Development activities, each Party shall comply with all applicable laws,
regulations and professional standards. In particular, but without limiting the
foregoing, all of the Development activities, including all tasks specified by
the Development Plan and any associated Annual Workplan/Budget, shall be
performed in accordance with GLP or GCP, to the extent applicable. With respect
to any facility or site at which a Party conducts Development pursuant to this
Agreement, including, where commercially reasonable and within the control of
the other Party, Third Party facilities or sites, each Party shall have the
right, at its expense, upon reasonable written notice and during normal business
hours, to inspect such site and facility and any records relating thereto as is
reasonably necessary to verify the other Party's compliance with the terms of
this Agreement relating to GLP and GCP. Such inspection shall be subject to the
confidentiality provisions of this Agreement. Each Party agrees to, to the
maximum extent possible, to include in any agreement with a Third Party relating
to such facilities and sites a clause permitting the other Party to exercise its
rights under this Section 4.10.

                                   ARTICLE 5.
                       COMMERCIALIZATION IN THE TERRITORY

            5.1 Joint Commercialization Efforts .

                  (a) EFFORTS. Elan and Biogen each agree to: (a) collaborate
exclusively and diligently in the Commercialization of Antegren or, as
applicable, other Licensed Products in the Field and (b) use Commercially
Reasonable and Diligent Efforts to Commercialize Antegren or, as applicable,
other Licensed Product, promptly and in such a manner as to optimize the
profitability of Licensed Product for both Parties. Except as otherwise set
forth in this Article 5, all activities shall be undertaken by the Parties in
accordance with the Commercialization Plan and Annual Commercialization
Plan/Budget developed under Section 5.1(c) and all sales shall be made under a
single brand name and trademark, using professional sales representatives who
are employees of the Parties.

                  (b) APPOINTMENT OF DESIGNATED PARTY. Guided by the principles
set forth in Section 2.1, for each indication, the Joint Commercialization Team
shall appoint a Party as the "Designated Party" under this Agreement to play the
primary role in marketing and sales activities in such indication as described
in Sections 5.3 and 5.4. The formal designation of a Designated Party for an
indication shall occur no later than sixty (60) days after the start of the
Phase III Clinical Trial of Licensed Product in such indication. Notwithstanding
anything in this Agreement to the contrary, the following shall apply with
respect to the appointment of a Designated Party: (i) *** shall be the
Designated Party for IBD, (ii) *** shall be the Designated Party for MS, (iii)
the Party that bears the costs, as incurred, for Development of an Excluded
Indication shall be the Designated Party for such indication and (iv) unless the
JSC determines that it does not make sense to do so, the JCT shall appoint the
Parties as

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       35


Designated Party for those indications not covered by clauses (i), (ii) or (iii)
above on an alternating basis.

                  (c) COMMERCIALIZATION PLAN/ANNUAL COMMERCIALIZATION
PLAN/BUDGET. Within one hundred eighty (180) days after its creation, the JCT
shall prepare, and submit to the JSC for approval, a rolling multiyear (not less
than three (3) years) plan for Commercializing Antegren or, as applicable, any
other additional Licensed Product in the Territory (the "Commercialization
Plan"). Notwithstanding anything in this Agreement to the contrary, the
Designated Party for an indication shall be responsible for proposing the
sections of the Commercialization Plan related to such indication, provided that
the proposal is subject to the review and approval of the full JCT and,
ultimately, the approval of the JSC. The Commercialization Plan shall include a
comprehensive market development, marketing, sales, supply and distribution
strategy for each Licensed Product in the Territory. The Commercialization Plan
shall be updated by the JCT by May 15 of each year and submitted for approval by
the JSC at its meeting next following the date on which the updated plan is
available. Each updated Commercialization Plan shall address no less than the
three (3) upcoming years. Not later than sixty (60) days after the filing of the
first Drug Approval Application for a Licensed Product in the Territory, the JCT
shall prepare an annual commercialization plan and budget (the "Annual
Commercialization Plan/Budget"). Notwithstanding anything in this Agreement to
the contrary, the Designated Party for an indication shall be responsible for
proposing the sections of the Annual Commercialization Plan/Budget related to
such indication and all periodic updates thereto, provided that the proposal is
subject to the review and approval of the full JCT and, ultimately, the approval
of the JSC. The first such Annual Commercialization Plan/Budget shall cover the
remainder of the calendar year in which such Licensed Product is anticipated to
be approved plus the first full calendar year thereafter. On or before September
15 of each year thereafter, the JCT shall prepare an Annual Commercialization
Plan/Budget for the upcoming year, together with any necessary updates to the
Commercialization Plan, and shall submit such Annual Commercialization
Plan/Budget and such updates to the JSC for approval at the meeting of the JSC
next following the date when such plan is available. Each Annual
Commercialization Plan/Budget shall be based on the then current
Commercialization Plan and, taking into account the provisions of this Article 5
and the other terms of this Agreement, shall include a comprehensive market
development, marketing, customer support, sales, supply and distribution
strategy, a detailed plan for implementation of such strategy, designation of
which Party is responsible for each activity, including a description of which
audiences and distribution channels each Party shall devote its respective
Promotion efforts towards, the personnel and other resources to be devoted by
each Party to such efforts, the number and positioning of details and the type
and level of other sales force activities to be performed by each Party, as well
as market and sales forecasts and forecasts of related operating expenses for
the Licensed Product in each country of the Territory, annual production
requirements as set forth in Section 3.3(d) and budgets for all projected
Commercialization expenses. The JCT shall divide responsibilities, where
appropriate, with the intent that, in general, Sales Representatives from only
one Party will call on any individual customer. In preparing and updating the
Commercialization Plan and each Annual Commercialization Plan/Budget, the JCT
will take into consideration factors such as market conditions, regulatory
issues and


                                       36


competition as well as the other provisions of this Article 5 and the other
terms and conditions of this Agreement.

                  (d) CONTRACT SALES ORGANIZATION. Notwithstanding the
foregoing, if the Joint Commercialization Team recommends, and the JSC agrees,
that it would be in the best interest of both Parties for one or both of the
Parties to contract with one (1) or more Third Parties who, by agreement,
performs selling activities (a "Contract Sales Organization") to perform all or
part of such Party's sales efforts hereunder, then such Party may enter into a
contract with such Contract Sales Organization to perform such activities, which
such Contract Sales Organization and contract shall be subject to the prior
written approval of the JSC. The Parties may also agree to appoint one or more
Third Party distributors to assist in Commercialization efforts as specified in
Section 5.4(c).

            5.2 PRICING. On a periodic basis, as agreed upon by the JCT, both
Parties shall conduct studies relating to the optimal pricing and reimbursement
strategies on a country-by-country, or as applicable, regional basis. Such
studies shall be presented to the JCT and any recommendations by either Party
relating to pricing and reimbursement strategies shall be submitted to the JCT
in order to permit it to prepare the Commercialization Plan and each Annual
Commercialization Plan/Budget. Based on such information and recommendations,
the JCT shall establish a recommended price range, on a country by country
basis, including a pricing and discounting strategy. The price range will
contain an upper and lower price. The Parties may take various considerations
into account in establishing the upper and lower price. In setting the lower end
of the price range, factors to be considered by the Parties will include *** .
In setting the upper end of the price range, factors to be considered by the
Parties will include *** . Notwithstanding anything in this Agreement to the
contrary, *** APPROXIMATELY 5 LINES OMITTED ***, the Parties agree to negotiate
in good faith an alternative arrangement which would provide equivalent economic
benefit to *** . In the event *** becomes the Distributing Party in any country,
the Parties shall discuss in good faith modifications to the terms of this
Agreement *** .

            5.3 Marketing Responsibilities/Marketing Materials.

                  (a) Role of Designated Party in Marketing. The Designated
Party in any indication shall have the primary role, with the other Party's
participation, and subject to the approval of the JCT, in (i) preparing annual
marketing plans and overall marketing and promotional platforms and campaigns
for the market for such indication, including allocation for sales and marketing
personnel in such indication between the Parties; (ii) implementing marketing
activities (including those related to product launch) for Antegren or, as
applicable, other Licensed Product, with respect to such indication; (iii) the
design of Licensed Product Promotional Materials; and (iv) proposing patient
assistance programs. The non-Designated Party shall have the right,

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       37


through the JCT, to provide input to the Designated Party with respect to
marketing and product launch activities for Licensed Product in the designated
indication in the Territory, including, without limitation, input into the
design of Licensed Product Promotional Material in accordance with procedures
established by the JCT which shall include review and approval of such materials
by the applicable review or clearance committees of both the Designated Party
and the non-Designated Party. The role of the Designated Party in sales efforts
is described in Section 5.4.

                  (b) Pre-Marketing Expenses. On a country by country basis,
before Regulatory Approval in such country of the Territory, the Pre-Marketing
Expenses incurred by the Parties with respect to such Licensed Product in
anticipation of obtaining Regulatory Approval of such Licensed Product in such
country shall be *** by the Parties, consistent with plans and budgets
established in the Development Plan and associated Annual Workplan/Budget or the
Commercialization Plan or any Annual Commercialization Plan/Budget. As such
Pre-Marketing Expenses are incurred they shall be paid for by the Party
incurring such expenses, subject to reimbursement as set forth in Exhibit B.

                  (c) Product Trademarks. Antegren shall be sold in the
Territory under the Antegren Trademark as selected by the JCT with the advice
and counsel of the JPC. As applicable, all other Licensed Products shall be sold
in the Territory under trademarks selected by the JCT and approved by the JSC
with the advice and counsel of the JPC (the "Product Trademarks"). The term
"Product Trademarks" shall also include any servicemarks selected by the JCT for
use in connection with services related to Antegren, or, as applicable, other
Licensed Product. The JCT shall use its best efforts to select a worldwide
Product Trademark for each Licensed Product. In the event of a Third Party
challenge of the Parties right to commercialize Licensed Product under the
Antegren Trademark or selected Product Trademark, the JPC shall consider the
grounds for such challenge and recommend to the JCT a course of action in the
affected market based on an assessment of the legal merits of such Third Party
claim. The foregoing procedure shall also be followed in the event of an
objection to the Antegren Trademark or selected Product Trademark raised by a
Regulatory Authority that is reviewing a Drug Approval Application.

                  (d) Party Name on Licensed Product Promotional Materials. With
respect to Licensed Product Promotional Materials, to the extent such Licensed
Product Promotional Materials identify or otherwise make reference to either of
the Parties, Elan and Biogen shall both be presented and described with equal
prominence and emphasis as having joined and participated in the development and
joint commercialization of Antegren or, as applicable, other Licensed Product,
as permitted by the applicable laws and regulations of each country in which
such Licensed Product Promotional Materials are to be presented. The manner in
which the trademarks and business name of the Parties is to be presented on the
Licensed Product Promotional

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       38


Material shall be subject to prior review and approval of the JCT, with the
advice and counsel of the JPC.

            5.4 Sales Efforts in the Territory.

                  (a) Sales Representatives. The sales force of the Designated
Party for an indication shall be primarily responsible for Promoting and
marketing Licensed Product in such indication in the Territory. Notwithstanding
the foregoing, in its proposed Annual Commercialization Plan/Budget for an
indication, the Designated Party shall provide that no less than *** of those
total sales effort resources used in interactions with customers in each of the
U.S. and the EU which are to be furnished directly by the parties shall be
provided by the non-Designated Party to the extent that such Party has the
appropriate resources. The foregoing shall not apply if the JSC, in an
affirmative decision, determines that such allocation would create undue
operational inefficiencies. If the JSC does not make such an affirmative
decision or is deadlocked, the foregoing *** allocation shall apply. The
non-Designated Party shall have the right, through the JCT, to provide input to
the Designated Party with respect to sales efforts for Licensed Product in the
designated indication in the Territory. Where it makes commercial sense to do so
given the size of the potential market or based on other commercial factors,
upon the recommendation of the Designated Party for an indication, the JCT may
decide to allocate sole responsibility for Promotion and marketing activities in
some countries to one Party on a country by country basis. Sales Representatives
of both Parties shall only use Licensed Product Promotional Materials that have
been designed by the applicable Designated Party and approved by the JCT, unless
the JCT otherwise determines. In the event that the Licensed Product has failed
in either IBD or MS, but succeeds in the other indication and at such time
Licensed Product is not being developed for any other Commercially Significant
Indication, the JSC shall consider in good faith a request of the non-Designated
Party, if made eighteen (18) months prior to the anticipated date of launch of
the Licensed Product in the designated indication, to increase its allocation of
the total sales force effort under the preceding sentence from *** to *** . The
JSC shall grant such a request if it makes a specific determination that (i) the
increased participation by the non-Designated Party in the sales force effort in
the applicable indication will add value to the profitability of the Licensed
Product and (ii) that such added value outweighs any additional operational
costs and/or complexity arising out of such additional participation. If the JSC
does not make an affirmative decision to permit the non-Designated Party to
increase its sales force effort as provided for in the preceding two sentences
or is deadlocked, the *** allocation shall continue to apply, notwithstanding
anything in this Agreement to the contrary.

                  (b) Sales Representative Training. Each Party Promoting
Antegren or, as applicable, other Licensed Product, in any country in the
Territory shall supervise and maintain such competent and qualified Sales
Representatives as may be required to fulfill its Promotion responsibilities
under the Annual Commercialization

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       39


Plan/Budget. With respect to each country in the Territory, the Sales
Representatives of the Parties shall be jointly trained by the Parties, as
agreed upon by the JCT and approved by the JSC. Each Party shall periodically
provide additional training, in accordance with the training requirements and
training programs and using training materials approved by the JCT, to each of
its Sales Representatives engaging in Promotion activities hereunder.

                  (c) Use of Third Party Distributors. The JCT shall determine
in which countries, if any, the Parties shall appoint Third Party distributors.
The Distributing Party shall be responsible for entering into the agreement with
the Third Party distributor, provided that the distributor and the form of the
distribution agreement must be approved in advance by the JSC.

                  (d) Sales Forecasts. The Designated Party for an indication
shall be responsible for preparing monthly 24-month rolling sales forecasts and
manufacturing resource plans for such indication.

                  (e) Co-Promotion Compliance Responsibilities. Each Party
Promoting a Licensed Product in the U.S. shall in all material respects conform
its practices and procedures relating to such Promotion to the FD&C Act, the PHS
Act, the Pharmaceutical Research and Manufacturers of America ("PhRMA") Code of
Pharmaceutical Marketing Practices (the "PhRMA Code") and the American Medical
Association ("AMA") Guidelines on Gifts to Physicians from Industry (the "AMA
Guidelines"), as the same may be amended from time to time, and promptly notify
the other Party of and provide the other Party with a copy of any material
correspondence or other reports with respect to the Promotion of a Licensed
Product submitted to or received from the FDA, PhRMA or the AMA relating to the
FD&C Act, the PHS Act, the PhRMA Code, or the AMA Guidelines. Outside of the
U.S., the Parties shall in all material respects conform their practices and
procedures relating to such Promotion to the applicable laws, rules and
regulations of the applicable country in the Territory, and similarly provide
the other Party with a copy of comparable correspondence or other reports as
applicable in such country. Each Party shall cause each of its employees,
representatives and agents, including, without limitation, each of its Sales
Representatives, to do nothing which such Party knows or reasonably should know
would jeopardize the goodwill or reputation of either Party or Antegren, or, as
applicable, other Licensed Product.

                  (f) Labeling Claims. Each Party shall limit the claims of
safety and efficacy that such Party or its sales force makes for a Licensed
Product in the Territory to those that are consistent with the approved labeling
for such Licensed Product in such country of the Territory. Neither Party may
add, delete or modify claims of efficacy or safety in its Promotion of any
Licensed Product in the Territory nor make any other changes in Promotion
materials, Licensed Product Promotional Materials and literature approved by the
JCT unless the change is approved by the JCT. Each Party shall be fully
responsible for disseminating accurate information regarding any Licensed
Product to its Sales Representatives based on approved labeling and information
provided by the JCT.


                                       40


                  (g) Samples. No Sampling of Licensed Product shall occur
unless the JCT has approved a Sampling program. If the JCT determines that a
Sampling program is advisable, each Party's Sales Representatives shall follow
the procedures for Sampling agreed upon by the JCT and shall perform Sampling in
compliance with all applicable laws and regulations.

            5.5 CUSTOMER SERVICE. As part of its Commercialization Plan and each
Annual Commercialization Plan/Budget, the JCT shall develop a strategy and
procedures for customer support services, on a country by country basis,
including the integration of such services with marketing and sales activities
of both Parties, the logistics, order entry and invoicing activities of the
Distributing Party and the ongoing regulatory obligations and information
collection activities of the Parties as specified in this Agreement. The JCT
shall, based on the recommendation of the relevant Designated Party as to
customer support in a particular indication, allocate responsibility for
customer support services between the Parties in such a way as to balance the
goal of providing consistent, high quality support with the goal of utilizing,
to the extent practicable, the then-prevailing infrastructure and expertise of
each Party in a given activity or with respect to a specific indication.

            5.6 DISTRIBUTION ACTIVITIES. Notwithstanding anything in this
Agreement to the contrary, *** shall be the "Distributing Party" in each country
of the Territory unless the Joint Commercialization Team recommends, with the
approval of the JSC, that *** assume such responsibilities in a country. The
Distributing Party in a country shall be responsible for processing orders,
pick, pack and ship operations, order delivery, invoicing and collection
activities and any other distribution activities that are allocated to the
Distributing Party in the Commercialization Plan and an Annual
Commercialization/Budget (collectively, "Distribution Activities"). All
Distribution Activities shall be performed by the Distributing Party in
accordance with the Commercialization Plan and an Annual
Commercialization/Budget using employees and facilities of the Distributing
Party or using a Third Party or Third Parties approved by the JCT under a
contract approved by the JCT.

            5.7 RECALLS. Decisions with respect to recalls, withdrawals or
corrections of Licensed Product related to manufacturing or product quality
issues shall be handled in accordance with the Clinical Supply Agreement and the
Commercial Supply Agreement. The JSC shall have decision-making authority with
respect to issuing all other recall, market withdrawal or correction of any
Licensed Product in the Territory. The members of the JSC for each Party shall
delegate their authority under this Section to the appropriate executive
officers in their respective regulatory departments who shall develop
appropriate standard operating procedures with respect to recalls. To the extent
regulatory timeframes or public safety considerations require immediate action,
a telephone conference of the JSC's designees under this Section shall be called
within the required timeframe to consider the action and make a decision. Each
Party shall notify the other Party promptly (and in any event within twenty-four
(24) hours of receipt of

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       41


written notice) if any Licensed Product is alleged or proven to be the subject
of a recall, market withdrawal or correction in any country in the Territory.
Once a recall or withdrawal decision has been made under this Section, the
Distributing Party, under the direction of the JCT and the designees of the JSC,
shall be responsible for handling and implementing such recalls and market
withdrawals of any Licensed Product in the Territory, provided that such
activities be performed in accordance with standard operating procedures
approved by the JCT and the JSC. The other Party will make available to the
Distributing Party, upon request, all of the other Party's pertinent records
that the Distributing Party may reasonably request to assist it in effecting any
recall or market withdrawals. The Parties shall share equally all costs of a
recall or marketing withdrawal in the Territory in accordance with a budget for
such activities to be agreed upon by the JCT and approved by the JSC. A Party
shall have no obligation to reimburse or otherwise compensate the other Party
for any lost profits or income that may arise in connection with any such recall
or market withdrawal. Any investigation conducted in connection with a Licensed
Product recall shall be undertaken jointly by the Parties under the direction of
the JSC.

            5.8 Marketing Rights.

                  (a) Single Party Promotion. The Parties hereby agree that in
the event that only one Party plans to Promote a Licensed Product in any country
or countries in the Territory, then such Party may request good faith
negotiations with the other Party to obtain a potential royalty-bearing license
in such country or countries to replace the economic terms of this Agreement
therefor, where the royalty rate for such a license would place the
non-Promoting Party in the same economic position as expected by the economic
terms of this Agreement for sales of such Licensed Product in such country or
countries. Nothing herein, however, shall obligate either Party to enter into
such a license agreement in such event.

                  (b) Both Parties. The Parties hereby agree that in the event
that neither Party will Promote a Licensed Product in any country or countries
in the Territory, then the Parties shall promptly meet in an attempt to
determine whether to appoint a Third Party distributor under 5.4(c) or whether
the best approach is to license the marketing and sales rights for such Licensed
Product in such country or countries. If the Parties choose to license rights,
they either will mutually agree upon a royalty rate for such license that is
approximately equivalent to each Party's anticipated economic return hereunder
expected for sales of such Licensed Product in such country or countries, or
agree upon the mechanism for otherwise sharing the economic return from Licensed
Products as provided under this Agreement in such country or countries.


                                       42


                                   ARTICLE 6.
                          CONSIDERATION/COST ALLOCATION

            6.1 PERCENTAGE. Subject to the adjustments set forth in Section 4.7,
the Biogen Percentage shall be *** and the Elan Percentage shall be *** for Net
Sales of Licensed Products in the Territory under *** on an annual basis. When
Net Sales of Licensed Product are, on average, for four (4) Calendar Quarters,
in excess of *** per Calendar Quarter, then Elan, at its sole discretion, within
thirty (30) days of the end of that Calendar Quarter, may make a first single
payment (the "First Tier Payment") to Biogen of *** . If Elan remits the First
Tier Payment to Biogen, the Percentages applicable when Net Sales are in excess
of *** , but less than *** on an annual basis, will continue to be *** as the
Elan Percentage and *** as the Biogen Percentage, subject to the adjustments set
forth in Section 4.7. Should Elan elect not to make the First Tier Payment, the
Percentages applicable when Net Sales are in excess of *** on an annual basis
shall be adjusted such that the Biogen Percentage is *** and the Elan Percentage
is *** , subject to further adjustment as set forth in Section 4.7. If Elan has
remitted to Biogen the First Tier Payment and, thereafter, Net Sales of Antegren
or, as applicable, other Licensed Product, on average, for four (4) Calendar
Quarters, are in excess of *** per Calendar Quarter, then Elan, at its sole
discretion, within thirty (30) days of the end of that Calendar Quarter, may
make a second single payment (the "Second Tier Payment") to Biogen of *** . If
Elan remits the Second Tier Payment to Biogen, the Percentages applicable when
Net Sales are in excess of *** on an annual basis will continue to be *** as the
Biogen Percentage and *** as the Elan Percentage, subject to the adjustments set
forth in Section 4.7. Should Elan elect not to make the Second Tier Payment and
having made the First Tier Payment, the Percentages applicable when Net Sales
are in excess of *** on an annual basis shall be adjusted such that the Biogen
Percentage is *** and the Elan Percentage is *** , subject to further adjustment
as set forth in Section 4.7.

            6.2 REIMBURSABLE COMMERCIAL COST SHARING. The Parties shall split
Reimbursable Commercial Costs in accordance with the Parties' respective
Percentages, and in accordance with the procedures described in the Financial
Planning, Accounting and Reporting Procedures attached hereto as Exhibit B.
There shall be a Reconciliation Statement, prepared by the finance
representatives of the Parties on the JPT or Joint Commercialization Team as set
forth in Exhibit B, of such costs which are to be shared and which are incurred
during a reporting period by each Party, in accordance with Section A.2.2 of
Exhibit B, with a payment by one Party to the other, within thirty (30) days of
receipt of the Reconciliation Statement, to the extent necessary so that each
Party bears its appropriate Percentage of such shared Reimbursable Commercial
Costs.

            Elan shall be entitled to credits against its share of Reimbursable
Commercial Costs otherwise owed to Biogen under this Section in the amount of
*** and any additional amounts set forth below upon occurrence of the
corresponding triggering event. The credits may be applied only after First
Commercial Sale of

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       43


Licensed Product in MS, if any. Elan may not apply credits of more than *** in
any one (1) year.



                      Event                                      Credit Amount
                      -----                                      -------------
                                                              
Biogen's initiation of the Clinical Resupply Campaign               $ ***
following successful production at 200 liter scale

Biogen's conduct of the Clinical Resupply Campaign in               $ ***
accordance with the Development Plan and satisfactory
completion of comparability protocols such that there is
sufficient Clinical Supplies for Phase III Clinical Trials
in MS and Crohn's disease as currently contemplated such
that unrestricted enrollment in the trials could begin by
the Anticipated Phase III Start Date (even if such trials do
not actually begin by such date)


            6.3 UPFRONT FEE. On the Effective Date, Biogen shall pay Elan an
up-front fee of fifteen million dollars ($15,000,000) to reimburse Elan for
research and development expenditures previously incurred by Elan. The payment
set forth in this Section 6.3 shall not be refundable or creditable and shall
not be subject to or create future performance obligations on the part of either
Biogen or Elan. The terms of this up-front fee are separate and distinct from
the other terms of this Agreement.

            6.4 MILESTONE PAYMENTS TO ELAN. Biogen shall pay to Elan the
following milestone payments, each such payment being due and payable one time
only and within thirty (30) days after the occurrence of the corresponding
triggering event.



                             Event                    Payment To Elan By Biogen
                             -----                    -------------------------
                                                   
                             ***                            $     ***

            *** APPROXIMATELY 5 LINES OMITTED  ***          $     ***

            *** APPROXIMATELY 15 LINES OMITTED ***          $     ***


              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       44




                             Event                    Payment To Elan By Biogen
                             -----                    -------------------------
                                                   
            *** APPROXIMATELY 5 LINES OMITTED  ***          $     ***

            *** APPROXIMATELY 5 LINES OMITTED  ***          $     ***

            *** APPROXIMATELY 5 LINES OMITTED  ***          $     ***


Each of the milestone payments set forth in this Section 6.4 are payable only
once, and shall be not be refundable or creditable or subject to or create any
future performance obligations on the part of either Biogen or Elan. The terms
of the milestones are separate and distinct from the other terms of this
Agreement.

            6.5 RECORDS OF NET SALES AND COMMERCIALIZATION COSTS. Each Party
will maintain complete and accurate records which are relevant to costs,
expenses, sales and payments used to determine payments to be made under this
Agreement and such records shall be open during reasonable business hours for a
period of three (3) years from creation of individual records for examination at
the other Party's expense and not more often than once each year by an
independent certified public accountant selected by the other Party as described
in A.6 of Exhibit B. Any records or accounting information received from the
other Party shall be Confidential Information for purposes of Article 10.
Results of any such audit shall be provided to both Parties, subject to Article
10.

                                   ARTICLE 7.
                             MANUFACTURE AND SUPPLY

            7.1 Manufacture of Licensed Products.

                  (a) Technology Transfer. Elan will ensure that a letter
agreement regarding technology transfer agreement with Lonza, in the form
attached to this Agreement as Exhibit D, is in effect by the execution date of
this Agreement. Commencing on the Effective Date, Elan shall commence transfer
of manufacturing Know-how from Elan and Lonza to Biogen, and shall use
Commercially Reasonable and Diligent Efforts to ensure that such technology
transfer is completed within sixty (60) days of the Effective Date.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       45


                  (b) Existing Supplies and Commitments. Elan's sole current
manufacturing commitments are with the third party contract manufacturers as set
forth in Schedule 7.1(b)(i). The Parties will initially use Elan's existing
Clinical Supplies of Antegren and the quantities of Antegren currently scheduled
to be manufactured by Elan's contract manufacturer for preclinical, and, as
determined by the Joint Project Team, for clinical trial uses. Elan's existing
inventory of Clinical Supplies is described in Schedule 7.1(b)(ii). The JPT
shall determine whether to have Elan instruct Lonza to complete the manufacture
of six to nine batches of Antegren in 2000 and 2001, and Elan shall comply with
such instruction.

                  (c) Clinical Supplies. Biogen shall be responsible for
scale-up of the manufacturing process for Licensed Product at Biogen's facility,
and preparation for the production of Clinical Supplies. Commencing at such time
as the technology transfer and manufacturing scale-up processes at Biogen have
been completed and the FDA has granted any approvals and licenses required for
Licensed Product manufactured by Biogen to be used in clinical trials, Biogen
shall supply Clinical Supplies of Antegren for the completion of human clinical
trials in the Territory, subject to the terms of a "Clinical Manufacturing
Agreement" to be entered into by the Parties within sixty (60) days of the
Effective Date in a form to be mutually agreed upon by the Parties. Once
Clinical Supplies are available from Biogen, the Joint Project Team shall
determine from which source of Licensed Product preclinical and clinical needs
will be filled.

                  (d) Costs Associated with Clinical Supplies *** of Biogen's
Cost of Goods Manufactured For Sale for manufacture and supply of Clinical
Supplies incurred after the execution date shall be included as Development
Costs.

                  (e) Commercial Supplies. Biogen shall be responsible for
establishing a commercial manufacturing process, and supplying Commercial
Supplies of Antegren, or applicable, other Licensed Product at the scale and in
the amounts required to meet worldwide demand for Licensed Product subject to
oversight of the JSC with respect to plans and forecasts. Within ninety (90)
days after initiation of a Phase III Clinical Trial of Licensed Product, the
Parties will enter into a "Commercial Manufacturing and Supply Agreement" in a
form to be mutually agreed upon by the Parties. The executed Commercial Supply
Agreement shall contain terms and provisions identical or not less favorable
than the applicable provisions of this Agreement. The termination provisions in
the Commercial Supply Agreement shall be identical to those provisions related
to continuation of supply after termination contained in Article 14. The
purchase price to be paid by Elan for Commercial Supplies provided by Biogen
under the Commercial Manufacturing and Supply Agreement shall be the applicable
Transfer Price as defined under this Agreement, provided, however, that the
purchase price of any unit of Commercial Supplies to be distributed as Samples
shall be *** . The Transfer Price shall be calculated on a quarterly basis, or
on a such other basis as the JCT shall determine. The Transfer Price shall be
paid within thirty (30) days after such Commercial Supplies are delivered to
Elan or its designee.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       46


                  (f) Decision-making. Notwithstanding anything in this
Agreement to the contrary, Biogen shall have final decision-making authority
solely with respect to issues directly related to physical product development,
process development and day-to-day manufacturing of Licensed Product, provided
that such decisions are made in good faith and are consistent with the plans and
forecasts for Licensed Product approved by the JSC. For purposes of clarity, it
is understood by the Parties that strategic decisions related to physical
product development, process development, and manufacturing shall be made by the
JSC.

                  (g) Use of Third Party Suppliers. In the event that Biogen
desires to use a Third Party to perform any part of manufacturing of Commercial
Supplies, the JSC shall first consider whether Elan has the ability, capability
and desire to perform such manufacturing operations, and, if so and if the
Parties are able to agree on terms that are acceptable to both Parties, the
Parties shall amend this Agreement and the Commercial Manufacturing and Supply
Agreement to cover the manufacturing operations to be performed by Elan.

            7.2 PAYMENTS TO BIOGEN. Upon occurrence of the events specified
below, Elan shall make the corresponding payment to Biogen to reimburse Biogen
for manufacturing-related expenditures incurred by Biogen. The payments shall
not be refundable or creditable and shall not be subject to or create future
performance obligations on the part of either Biogen or Elan. The terms of these
payments are separate and distinct from the other terms of this Agreement.



                        Event                            Credit Amount
                        -----                            -------------
                                                      
      ***                                                  $      ***

      ***                                                  $      ***

      ***                                                  $      ***

      *** APPROXIMATELY 8 LINES OMITTED ***
                                                           $      ***


            7.3 ALTERNATIVE MANUFACTURING. To the extent relevant activities are
contained in the Development Plan and Annual Workplan/Budget, Elan shall have

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       47


primary responsibility for completing the evaluation of the economic viability
of manufacturing Licensed Product through the introduction of genetic material
into a goat. If recommended by the Joint Project Team and approved by the JSC,
as part of an Annual Workplan/Budget, Elan may enter into contracts with such
Third Parties as may be approved by the Joint Project Team in order to evaluate
the transgenic means of production referred to in this Section 7.3. Elan's costs
associated with this Section 7.3 shall, where included within an Annual
Workplan/Budget, be chargeable as Development Costs. If the JSC, upon the
recommendation of the Joint Project Team, decides to pursue the transgenic means
of production for Clinical Supplies or Commercial Supplies, the Parties shall
negotiate in good faith appropriate adjustments to this Agreement.

            7.4 COMPLIANCE WITH GMP. All of the manufacturing activities with
respect to Clinical Supplies intended for use in humans and Commercial Supplies
shall be performed in accordance with GMP. With respect to any facility or site
at which a Party conducts manufacturing pursuant this Agreement, including,
where commercially reasonable and within the control of the other Party, Third
Party facilities or sites, each Party shall have the right, at its expense, upon
reasonable written notice and during normal business hours, to inspect such site
and facility and any records relating thereto as is reasonably necessary to
verify the other Party's compliance with the terms of this Agreement relating to
GMP. Such inspection shall be subject to the confidentiality provisions of this
Agreement. Each Party agrees to, to the maximum extent possible, to include in
any agreement with a Third Party relating to its facilities and sites a clause
permitting the other Party to exercise its rights under this Section 7.4.

                                   ARTICLE 8.
                                    LICENSES

            8.1 LICENSE TO ELAN WITHIN THE FIELD IN THE TERRITORY. Subject to
the terms and conditions of this Agreement, including, without limitation,
Article 6, Biogen hereby grants to Elan a worldwide royalty-free license,
without the right, except as otherwise provided for herein, to sublicense, under
the Biogen Patents and Biogen Know-how in the Field to develop, make, have made,
use, market, sell, distribute, export, import, offer for sale, have sold, or
have distributed or imported Licensed Products in the Territory. The license
granted to Elan hereunder, in any country, shall be co-exclusive with Biogen.
Biogen agrees not to grant to any Third Party any license rights under Biogen
Patents and/or Biogen Know-how to develop, make, have made, use, sell, offer for
sale, have sold and/or import Licensed Products except as otherwise permitted
under this Agreement.

            8.2 LICENSE TO BIOGEN WITHIN THE FIELD IN THE TERRITORY. Subject to
the terms and conditions of this Agreement, including, without limitation
Article 6, Elan hereby grants to Biogen a worldwide royalty-free license,
without the right, except as otherwise provided for herein, to sublicense, under
the Elan Patents and Elan Know-how in the Field to develop, make, have made,
use, market, sell, distribute, export, import, offer for sale, have sold, or
distributed or imported Licensed Products in the Territory. The license granted
to Biogen hereunder, in any country, shall be co-exclusive with Elan. Elan
agrees not to grant to any Third Party any license rights under Elan Patents
and/or


                                       48


Elan Know-how to develop, make, have made, use, sell, offer for sale,
have sold and/or import Licensed Products except as otherwise permitted under
this Agreement.

            8.3 UNBLOCKING LICENSES. In the event that the Development
activities of a Party, or authorized Third Party, under this Agreement and/or
the manufacture and/or Commercialization of Licensed Products in the Territory
would, during the term of this Agreement, misappropriate any know-how and/or
infringe any patent rights Controlled by the other Party that are not covered by
the licenses and sublicenses granted to in Sections 8.1 and/or 8.2, each Party
hereby grants to the other Party, to the extent such Party is legally able to do
so, a worldwide, non-exclusive, non-royalty bearing license, under such know-how
and patent rights, to enable the licensed Party perform its obligations under
this Agreement and to manufacture and/or Commercialize Licensed Products in the
Territory in accordance with the licenses and sublicenses granted in Sections
8.1 and 8.2 of this Agreement.

            8.4 RIGHT TO GRANT LICENSES/SUBLICENSES. Subject to Section 10.2, if
pursuant to this Agreement, the JSC approves the utilization of one or more
Third Parties to perform certain tasks in the conduct of the Development Plan
and Annual Workplan/Budget, the Commercialization Plan, the Annual
Commercialization Plan/Budget, or the manufacture of Clinical Supplies or
Commercial Supplies, the Party entering into a contract with such Third Party
for the performance of such services, may, as part of such contract, grant to
such Third Party a nonexclusive, nontransferable license or sublicense, as
applicable, without the right to grant sublicenses, under the Elan Patents, Elan
Know-how, Biogen Patents or Biogen Know-how, as applicable, only to the extent
and only for so long as such license or sublicense is necessary for such Third
Party to perform such tasks. All such contracts and sublicenses entered into by
either Party with any such Third Party shall be subject to the prior written
approval of the JSC with the prior review of each Party's legal department,
which approval shall not be unreasonably withheld or delayed.

            8.5 *** SUBLICENSE. The Parties agree to comply with the obligations
set forth in the ***

            8.6 ELAN IN-LICENSES. Elan shall not terminate or amend the Elan
In-Licenses without the prior written consent of Biogen.

                                   ARTICLE 9.
                           TRADEMARKS AND SERVICEMARKS

            9.1 PRODUCT TRADEMARKS. Each Party agrees to sell Antegren solely in
connection with the Antegren Trademark chosen by the JCT with the advice and
counsel of the JPC pursuant to Section 5.3(c). All other Licensed Products shall
be sold in the Territory under the Product Trademarks chosen by the JCT, with
the advice and counsel of the JPC as described in Section 5.3(c) above. The
Distributing Party, in coordination

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       49


with, and subject to the review and approval of, the JCT and the JPC, shall be
responsible for the preparation, prosecution and maintenance of applications
related to the Antegren Trademark and Product Trademarks in each country in the
Territory in which it is the Distributing Party, which such Antegren Trademark
and Product Trademarks shall be owned by such Distributing Party, subject to the
terms of this Agreement. Each Distributing Party, subject to the terms of
Section 9.3, shall grant to the other Party a royalty-free, nontransferable,
non-assignable, fully paid up, license to use the Antegren Trademark and the
Product Trademarks as contemplated by this Agreement. The costs of the
preparation, prosecution and maintenance of such Product Trademark applications
and Product Trademarks shall be included in Other Out of Pocket Costs pursuant
to Exhibit B to the extent such costs are included in the Development
Budget/Plan or the Commercialization Plan.

            9.2 PARTY TRADEMARKS ON LICENSED PRODUCT PROMOTIONAL MATERIALS. All
Licensed Product Promotional Materials used by either Party in Promoting in the
Territory shall contain (a) the Biogen trademarks, corporate name and logo as
may be provided by Biogen to Elan from time to time and (b) the Elan trademarks,
corporate name and logo as may be provided by Elan to Biogen from time to time,
in positions of equivalent prominence and emphasis, subject to Sections 5.3(d)
and 9.4.

            9.3 Trademark Licenses.

                  (a) In order to enable each Party to perform its obligations
as set forth in Section 9.2 above, Biogen hereby grants to Elan a
non-assignable, non-exclusive, royalty-free right and license to use the BIOGEN
trademark as specified by Biogen and as modified by Biogen from time to time
(the "BIOGEN trademark"), and Elan hereby grants to Biogen a non-assignable,
non-exclusive, royalty-free right and license to use the ELAN trademark as
specified by Elan and as modified by Elan from time to time (the "ELAN
trademark") in the Territory solely in connection with the Licensed Product
Promotional Materials and labeling for Licensed Products.

                  (b) Elan hereby grants to Biogen a royalty-free, fully paid
up, co-exclusive license to use the Antegren Trademark in the Territory for the
Development, Promotion, and manufacturing and Commercialization activities
provided for in this Agreement and each Party shall grant to each other a
royalty-free, fully paid up, co-exclusive license to use the Product Trademarks
in the Territory for the Development, Promotion, and Commercialization and
manufacturing activities provided for in this Agreement.

                  (c) The trademark licenses granted under this Section 9.3
shall be sublicensable to the extent and pursuant to the express terms and
conditions permitted under Section 8.4 above. Unless otherwise agreed, each such
sublicensee shall be subject to all of the obligations of the licensing or
sublicensing Party. Furthermore, the licenses set forth in this Section 9.3
shall expire as to any terminating Party under Section 14.2 or breaching Party
in the event of termination under Section 14.4 or non-purchasing Party under
Section 14.1(b), 14.7, or 14.8, and any license rights under Section 9.3(b)
shall become exclusive to the non-terminating or non-breaching Party or the
purchasing Party,


                                       50


as the case may be, immediately upon termination of this Agreement; provided,
however, each Party (to the extent permitted under this Agreement to sell
Licensed Products after termination) shall thereafter have a reasonable period,
not to exceed *** following such termination, within which to use the existing
inventory of such Licensed Product Promotional Materials and labeling containing
any trademarks of the other Party. Upon a termination pursuant to Section 14.2
or 14.4 below or a purchase under Sections 14.1(b), 14.7 or 14.8 below, the
non-terminating Party or non-breaching Party or the purchasing Party,
respectively, shall thereafter be relieved of its obligations to display the
other Party's trademarks on such Licensed Product Promotional Materials and
labeling printed following such termination or purchase and, upon the exhaustion
of any existing inventory of Licensed Product promotional materials and labeling
following such termination, the license granted to the non-terminating Party or
non-breaching Party or the purchasing Party, as the case may be, under Section
9.3(a) shall terminate.

            9.4 TRADEMARK USE REQUIREMENTS. Prior to the use thereof, each Party
shall provide to the other Party, through the Joint Project Team or the JCT or
their designees and the JPC, a prototype of any Licensed Product Promotional
Materials or labeling for Licensed Products which contain the other Party's
trademarks (including any Product Trademark) for the purposes of the other
Party's review of the manner in which its trademarks are used therein. The
reviewing Party shall notify the other Party within ten (10) business days after
delivery of such prototype, whether the reviewing Party approves or disapproves
of the manner of such use and, in the case of disapproval, the specific reasons
therefor and an acceptable alternative. In the event the reviewing Party fails
to so notify the other Party within such ten (10) business day period, the
reviewing Party shall be deemed to have approved of the manner of such use. In
the event the reviewing Party disapproves of the manner of such use and the
Parties are unable to reach agreement regarding the manner of such use, such
dispute shall be resolved by the Parties in accordance with Article 16 below.
Each Party shall permit one or more authorized representatives of the other
Party, on reasonable prior notice, at reasonable intervals, during normal
business hours and subject to normal safety and security procedures, to inspect
and examine from time to time, Licensed Product Promotional Materials and
labeling for Licensed Products and the records of such Party that are directly
related to use of the other Party's trademarks, or to use of such Licensed
Product Promotional Materials or labeling. Notwithstanding the above, the
Parties shall not have the right to so inspect Licensed Product Promotional
Materials and labeling for Licensed Products more often than once in any
calendar year, unless a Party is in breach of this Section 9.4, in which case
the other Party shall have the right to so inspect such materials and records
with respect to such breach.

            9.5 INFRINGEMENT OF TRADEMARKS. Each Party shall notify the JCT
promptly upon learning of any actual, alleged or threatened infringement of any
trademark, service mark or trade dress right applicable to a Licensed Product in
the Territory, or of any unfair trade practices, trade dress imitation, passing
off of counterfeit

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       51


goods, or like offenses in the Territory. Upon learning of such offenses from a
Party regarding such potential or actual violation, the JPC shall confer with
the Parties as to which Party and counsel should be assigned to defend the
applicable rights. Subject to the overview of the JPC, the Party defending the
Product Trademark or Antegren Trademark, as the case may be, shall take all
reasonable and appropriate steps to protect, defend and maintain the Product
Trademark and Antegren Trademark for use by the Parties in the Territory in
connection with Antegren or, as applicable, other Licensed Product. The Parties
shall cooperate in good faith with respect to all enforcement actions hereunder,
and each Party shall notify the other Party promptly of all substantive
developments with respect to such enforcement actions, including, but not
limited to, all material filings, court papers and other related documents. Each
Party shall consider the timely given, reasonable comments and advice of the
other Party with respect to the strategy employed and submissions made relative
to any such enforcement actions, and any disagreements shall be brought to the
attention of the JSC for resolution.

            9.6 COSTS OF DEFENSE OF TRADEMARKS. All of the costs, expenses and
legal fees in bringing, maintaining and prosecuting any action approved by the
JPC to protect or defend the Antegren Trademark or, as applicable, Product
Trademark in the Territory, and any recovery, shall be included in the Other Out
of Pocket Costs pursuant to Exhibit B.

                                    ARTICLE 10.
                                 CONFIDENTIALITY

            10.1 CONFIDENTIALITY. Except to the extent expressly authorized by
this Agreement or otherwise agreed in writing, the Parties agree that, for the
Term of this Agreement and for five (5) years thereafter, the receiving Party
shall keep confidential and shall not publish or otherwise disclose or use for
any purpose other than as permitted under this Agreement any Know-how and other
information and materials furnished to it by the other Party pursuant to this
Agreement (collectively, "Confidential Information"), except to the extent that
it can be established by the receiving Party that such Confidential Information:

                  (a) was already known to the receiving Party, other than under
      an obligation of confidentiality, at the time of disclosure by the other
      Party;

                  (b) was generally available to the public or otherwise part of
      the public domain at the time of its disclosure to the receiving Party;

                  (c) became generally available to the public or otherwise part
      of the public domain after its disclosure and other than through any act
      or omission of the receiving Party in breach of this Agreement;

                  (d) was disclosed to the receiving Party, other than under an
      obligation of confidentiality, by a Third Party who had no obligation to
      the disclosing Party not to disclose such information to others; or


                                       52


                  (e) was subsequently developed by the receiving Party without
      use of the Confidential Information as demonstrated by competent written
      records.

            10.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential
Information of the other Party hereunder to the extent such disclosure is
reasonably necessary in filing or prosecuting patent applications, prosecuting
or defending litigation, making filings with Regulatory Authorities related to
Licensed Product, or complying with applicable governmental regulations,
provided that in making any such disclosure of the other Party's Confidential
Information it will, except where impracticable for necessary disclosures, for
example in the event of medical emergency, give reasonable advance notice to the
other Party of such disclosure requirement and, except to the extent
inappropriate in the case of patent applications, will use its reasonable
efforts to secure confidential treatment of such Confidential Information
required to be disclosed. In addition, each Party shall be entitled to disclose,
under a binder of confidentiality containing provisions substantially as
protective as those of this Article 10 to the extent reasonably practicable,
Confidential Information of the other Party to its Affiliates, consultants,
clinical investigators, potential sublicensees and other Third Parties only for
any purpose provided for in this Agreement. Nothing in this Article 10 shall
restrict any Party from using for any purpose any Information developed by it
during the course of the collaboration hereunder except as otherwise set forth
in Section 10.5 and 10.6 and except that results of Development work related to
Licensed Product, including but not limited to clinical trials of Licensed
Product shall not be disclosed to any Third Party unless pursuant to a
publication under Section 10.5, a press release under Section 10.6 or to
Affiliates, consultants, clinical investigators, potential sublicensees and
other Third Parties under an obligation to the disclosing Party to maintain the
confidentiality of such Information and provided such Information is furnished
for a purpose contemplated under this Agreement.

            10.3 SURVIVAL. This Article 10 shall survive the termination or
expiration of this Agreement for a period of five (5) years.

            10.4 TERMINATION OF PRIOR AGREEMENT. This Agreement supersedes the
Confidentiality Agreement between the Parties dated January 21, 1998, as
modified by side letters exchanged between the Parties on February 4, 2000, but
only insofar as such Confidentiality Agreement relates to the subject matter of
this Agreement. All Confidential Information (as defined in such Confidentiality
Agreement) exchanged between the Parties under such Confidentiality Agreement
relating to the subject matter of this Agreement shall be deemed Confidential
Information hereunder and shall be subject to the terms of this Article 10.

            10.5 PUBLICATIONS. The Joint Project Team will determine the overall
strategy for publication of results of clinical trials of Licensed Product and
publication in support of such Licensed Products in the Territory. Except as
required by law, each Party agrees that it shall not publish or present the
results of Development work related to Licensed Product, including but not
limited to, studies or clinical trials carried out by such Party as part of the
collaboration under this Agreement without the opportunity for


                                       53


prior review by the other Party and the approval of the Joint Project Team,
Joint Commercialization Team or the JSC, as the case may be. Each Party shall
provide to the other Party the opportunity to review any of the submitting
Party's proposed abstracts, manuscripts or presentations (including information
to be presented verbally) which relate to the Licensed Products or their use
(including any proposed Third Party publication submitted to the submitting
Party for review) at least thirty (30) days prior to their intended presentation
or submission for publication, and such submitting Party agrees, upon written
request from the other Party, not to submit such abstract or manuscript for
publication or to make such presentation until the other Party is given up to
forty-five (45) days from the date of such written request to seek appropriate
patent protection for any material in such publication or presentation which it
reasonably believes is patentable. Once such abstracts, manuscripts or
presentations have been reviewed by each Party and have been approved for
publication by the Joint Project Team, the Joint Commercialization Team, or the
JSC, as the case may be, the same abstracts, manuscripts or presentations do not
have to be provided again to the other Party for review for a later submission
for publication. Expedited reviews for abstracts or poster presentations may be
arranged if mutually agreeable to the Parties. Each Party also shall have the
right to require that its Confidential Information that may be disclosed in any
such proposed publication or presentation be deleted prior to such publication
or presentation. In the event that either Party submits any manuscript or other
publication relating to Antegren or other Licensed Product, it will consider and
acknowledge the contributions of the other Party, including, as appropriate,
co-authorship.

            10.6 PUBLICITY REVIEW. The Parties agree that the public
announcement of the execution of this Agreement shall be in the form of a draft
press release attached to this Agreement as Exhibit F, and thereafter each Party
shall be entitled to make or publish any public statement consistent with the
contents thereof. Thereafter, Elan and Biogen will jointly discuss and agree,
based on the principles of Section 10.5 and this Section 10.6, on any statement
to the public regarding this Agreement or any aspect or term of this Agreement
or any results of Development work subject in each case to disclosure otherwise
required by law or regulation as determined in good faith by each Party. The
principles to be observed by Elan and Biogen in such public disclosures will be:
accuracy, the requirements for confidentiality under Article 10, the advantage a
competitor of Elan or Biogen may gain from any public statements under this
Section 10.6, and the standards and customs in the biotechnology and
pharmaceutical industries for such disclosures by companies comparable to Elan
and Biogen. The terms of this Agreement may also be disclosed to (a) government
agencies where and to the extent required by law (and with appropriate requests
made for confidential treatment), including filings required to be made by law
with the Securities and Exchange Commission, the New York Stock Exchange, or any
national securities exchange, (b) a Party's accountants or lawyers, or (c) Third
Parties with the prior written consent of the other Party, which consent shall
not be unreasonably withheld, so long as such disclosure is made under a binder
of confidentiality (in the case of Third Parties), so long as highly sensitive
terms and conditions such as financial terms are extracted from the Agreement or
not disclosed upon the request of the other Party and the disclosing Party gives
reasonable advance notice of the disclosure and the circumstances requiring the
disclosure.


                                       54


                                  ARTICLE 11.
              OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

            11.1 Ownership of Intellectual Property.

                  (a) Collaboration Inventions. All Know-how and Collaboration
Inventions arising hereunder which constitute joint inventions by employees of
Elan and Biogen will be owned jointly by Elan and Biogen, and each Party shall
retain an undivided one-half interest in and to such Know-how and Collaboration
Inventions, including, without limitation, any patents resulting therefrom, with
full ownership rights in and to any field and including the right to license and
sublicense, subject to the provisions of Sections 8.1 and 8.2 above. The laws of
the U.S. with respect to joint ownership of inventions shall apply in all
jurisdictions giving force and effect to this Agreement. Each Party shall solely
own all Collaboration Inventions arising under, in furtherance of, and as a
direct result of, that Party's activities under this Agreement which are made
(meaning that they are conceived prior to or during the Term and experimentation
has been initiated in the course of the activities contemplated hereunder)
solely by its employees or jointly with a Third Party, subject to Sections 8.1,
8.2 and 8.3 above and, with respect to inventions for which patent applications
are filed, subject to the provisions of Section 11.4(c) below.

                  (b) Other Inventions. During the Term of this Agreement, and
during the course of, in furtherance of, and as a direct result of the
collaboration hereunder, inventions may be made (meaning that they are conceived
prior to or during the Term and experimentation has been initiated in the course
of the activities contemplated hereunder) by employees of either Party, solely
or jointly, which are not Collaboration Inventions as defined herein and do not
relate directly to any Licensed Product or use of Licensed Product in the Field
("Outside the Scope Invention"). Elan shall own all such Outside the Scope
Inventions made (meaning that they are conceived prior to or during the Term and
experimentation has been initiated in the course of the activities contemplated
hereunder) solely by its employees or jointly by its employee and a Third Party,
and Biogen shall own all such Outside the Scope Inventions made (meaning that
they are conceived prior to or during the Term and experimentation has been
initiated in the course of the activities contemplated hereunder) solely by its
employees or jointly by its employee and a Third Party, in each case such
Elan-owned and Biogen-owned Outside the Scope Inventions shall be subject to the
provisions of Sections 8.1, 8.2 and 8.3 above, to the extent applicable. All
such Outside the Scope Inventions made (meaning that they are conceived prior to
or during the Term and experimentation has been initiated in the course of the
activities contemplated hereunder) jointly by employees of Elan and Biogen will
be jointly owned by Elan and Biogen, subject to Sections 8.1, 8.2 and 8.3. Each
Party, at its sole discretion and responsibility, may file, prosecute and
maintain patent applications and patents covering its solely owned Outside the
Scope Inventions. For such Outside the Scope Inventions which are made jointly
by employees of Elan and Biogen, the Parties shall, though the JPC, jointly
decide on a patent application filing and prosecution strategy.


                                       55


                  (c) Inventorship Procedure. The JPC shall within a reasonable
time after the Effective Date establish a mutually agreeable procedure for
determining inventorship of Collaboration Inventions, provided that such
determination shall be made in accordance with applicable United States laws
relating to inventorship. All such determinations shall be documented to ensure
that any divisional or continuation patent applications reflect appropriate
inventorship and that inventions and patent rights are assigned to the
appropriate party.

            11.2 DISCLOSURE OF PATENTABLE INVENTIONS. In addition to the
disclosures required under Article 13 below, each Party shall provide to the
other Party any invention disclosure submitted in the normal course of its
business which discloses a Collaboration Invention. Such invention disclosures
shall be provided to the other Party within thirty (30) days after the Party
determines that an invention has been made. In the event patent applications are
not filed on such invention disclosures by either Party, such invention
disclosures shall be considered Know-how hereunder.

            11.3 PATENT DUE DILIGENCE. Promptly after the Effective Date, each
Party shall disclose to the other Party any patents or patent applications and
corresponding file histories Controlled by the disclosing Party, as well as any
Third Party patents or patent applications known to it, that claim or disclose
Licensed Products, methods for their use, or processes relating to the
manufacture thereof, and are relevant to the collaboration established
hereunder. Each Party agrees to bring to the attention of the other Party in a
timely manner any Third Party patent or patent application it discovers, or has
discovered, and which relates to, and may materially affect, the operations to
be conducted by or on behalf of the Parties under the collaboration. The cost of
any freedom to operate searches and analyses with respect to Licensed Products,
to the extent approved by the JPC, will be chargeable to the collaboration as
Other Out of Pocket Costs, and the Parties will agree on an allocation of
responsibilities between themselves regarding such searches and analyses.

            11.4 Patent Filings.

                  (a) Elan Patents. Decisions as to whether to file, prosecute
and maintain, and in which countries to do so along with other strategic
decisions relating thereto, shall be made by the Joint Patent Committee with
respect to those Elan Patents which relate specifically to Licensed Product or
the use of Licensed Product or the manufacture of Licensed Product, and by Elan
with respect to all other Elan Patents. For purposes of clarity, it is
understood that strategic decisions related to those Elan Patents that cover
additional matter beyond that which relates specifically to Licensed Product are
to be made by Elan. Elan shall use diligent efforts to prepare, file, prosecute
and maintain all of the Elan Patents which are licensed hereunder, using patent
counsel that is reasonably acceptable to Biogen. Solely with respect to any Elan
Patents which relate specifically to Licensed Products or the use or manufacture
of Licensed Product, Elan shall consult with the Joint Patent Committee on all
material decisions related to preparation, filing, prosecution and maintenance
of such Elan Patents, and shall use diligent efforts to implement the decisions
made by the Joint Patent Committee. Elan shall give Biogen an opportunity to
review and comment upon the text of the applications


                                       56


relating to any and all Elan Patents before filing, shall consult with Biogen
with respect to such application, and shall supply Biogen with a copy of the
applications as filed, together with notice of its filing date and serial number
whether such Elan Patents are filed prior to or after the Effective Date, as
well as full copies of the prosecution history for those Elan Patents filed
prior to the Effective Date. Elan shall keep Biogen advised of the status of the
actual and prospective patent filings relating to any Elan patents and shall
give Biogen an opportunity to review and comment on any material filing or
correspondence proposed to be sent to any patent office. Elan shall also notify
Biogen of the grant of any Elan Patents. Any disputes between the Parties
related to the preparation, filing, prosecution and maintenance of any Elan
Patents which relate specifically to Licensed Product or the use or manufacture
of Licensed Product shall be brought to the attention of the Joint Patent
Committee. Elan shall not cease the prosecution and/or maintenance of any Elan
Patents in any country or elect not to file a patent application unless Biogen
agrees to such action.

                  (b) Biogen Patents. Decisions as to whether to file, prosecute
and maintain, and in which countries to do so, along with other strategic
decisions relating thereto, shall be made by the Joint Patent Committee with
respect to those Biogen Patents which relate specifically to Licensed Product or
the use of Licensed Product or the manufacture of Licensed Product, and by
Biogen with respect to all other Biogen Patents. For purposes of clarity, it is
understood that strategic decisions related to those Biogen Patents that cover
additional matter beyond that which relates specifically to Licensed Product are
to be made by Biogen. Biogen shall use diligent efforts to prepare, file,
prosecute and maintain all of the Biogen Patents which are licensed hereunder,
using patent counsel that is reasonably acceptable to Elan. Solely with respect
to any Biogen Patents which relate specifically to Licensed Products or the use
or manufacture of Licensed Product, Biogen shall consult with the Joint Patent
Committee on all material decisions related to the preparation, filing,
prosecution and maintenance of such Biogen Patents, and shall use diligent
efforts to implement the decisions of the Joint Patent Committee. Biogen shall
give Elan an opportunity to review and comment upon the text of the applications
related to any and all Biogen Patents before filing, shall consult with Elan
with respect to such application, and shall supply Elan with a copy of the
applications as filed, together with notice of its filing date and serial number
whether such Biogen Patents are filed prior to or after the Effective Date, as
well as full copies of the prosecution history for those Biogen Patents filed
prior to the Effective Date. Biogen shall keep Elan advised of the status of the
actual and prospective patent filings related to any Biogen Patents and shall
give Elan an opportunity to review and comment on any material filing or
correspondence proposed to be sent to any patent office. Biogen shall also
notify Elan of the grant of any Biogen Patents. Any disputes between the Parties
related to the preparation, filing, prosecution and maintenance of any Biogen
Patents which relate specifically to Licensed Product or the use or manufacture
of Licensed Product shall be brought to the attention of the Joint Patent
Committee. Biogen shall not cease the prosecution and/or maintenance of any such
Biogen Patents in any country or elect not to file a patent application unless
Elan agrees to such action. Notwithstanding the foregoing, Biogen shall be under
no obligation to share with Elan, nor to cooperate with the JPC, on any Biogen
Patents that are being challenged by Elan in a court or administrative
proceeding.


                                       57


                  (c) Collaboration Inventions. Upon the identification of a
Collaboration Invention, the JPC shall (i) promptly discuss such Collaboration
Invention, (ii) promptly discuss the desirability of filing a United States
patent application covering such Collaboration Invention, as well as any foreign
counterparts, (iii) make the final decision with respect to any such filings as
soon as practicable, and (iv) designate the Party to be responsible for the
supervision of the preparation, filing and prosecution of such patent
application by outside patent counsel reasonably acceptable to the JPC which
such responsible Party shall, unless the Collaboration Invention is jointly
owned by the Parties, be the Party which owns such Collaboration Invention. Such
outside patent counsel shall be instructed to act in the best interests of both
Parties taking into consideration their relative interests under this Agreement.
The Party responsible for the preparation, filing, prosecution and maintenance
of Collaboration Invention Patent Rights shall consult with the Joint Patent
Committee on all material decisions related to the preparation, filing,
prosecution and maintenance of such Collaboration Invention Patent Rights, and
shall use diligent efforts to implement the decisions of the Joint Patent
Committee. The Party responsible for the preparation, filing and prosecution of
Collaboration Invention Patent Rights shall provide the other Party with a copy
of any patent application related to such Collaboration Invention Patent Rights
prior to filing such applications in any jurisdiction for review and comment by
the other Party, shall consult with the other Party with respect to such
application, and shall supply the other Party with notice of its filing date and
serial number. The Party responsible for each patent application shall keep the
other Party advised of the status of the actual and prospective patent filings,
including, without limitation, the grant of any Collaboration Invention Patent
Rights, and shall provide advance copies of any official filings or
correspondence related to the filing, prosecution and maintenance of such patent
filings for review and comment by the other Party. Any disputes between the
Parties related to the preparation, filing, prosecution and maintenance of
Collaboration Invention Patent Rights shall be brought to the attention of the
JPC for resolution. The Party responsible for a patent application shall not
cease the prosecution and/or maintenance of any such Collaboration Invention
Patent Rights in any country or elect not to file a patent application unless
the JPC agrees to such action. Subject to (i) the grant of licenses to Biogen
and Elan under Article 8, and (ii) the exclusivity provisions of Section 2.3,
each Party shall be free to exploit its Collaboration Invention Patent Rights
within the Territory without restriction. Anything in this Agreement to the
contrary notwithstanding, a Party may choose to file, prosecute and maintain
solely-owned Collaboration Inventions using its own internal patent attorneys.

                  (d) Patent Term Extensions. The Parties shall cooperate, if
necessary and appropriate, with each other in gaining patent term extensions,
including without limitation, supplementary protection certificates and any
other extensions that are now or become available in the future wherever
applicable to Patents covering Licensed Products. The Parties shall, if
necessary and appropriate, use reasonable efforts to agree upon a joint strategy
relating to patent term extensions, but, in the absence of mutual agreement with
respect to any extension issue, a patent shall be extended if either Party
elects to extend such patent. All filings for such extension shall be made by
the Party to whom the patent is assigned, provided, however, that in the event
that the Party to whom the patent is assigned elects not to file for an
extension, such Party shall (i) inform the


                                       58


other Party of its intention not to file and (ii) grant the other Party the
right to file for such extension.

                  (e) Patent Filing Costs. All costs and expenses incurred after
the Effective Date of filing, prosecuting, maintaining and extending those Elan
Patents or Biogen Patents which related specifically to Licensed Product or to
the manufacture or use of Licensed Product and all Collaboration Invention
Patent Rights shall be treated as Other Out of Pocket Costs and shall be shared
by the Parties as part of Reimbursable Commercial Costs in accordance with their
respective Percentages as set forth in Section 6.2. Notwithstanding the
foregoing, any expenses related to those Elan Patent Rights or Biogen Patent
Rights that are not specifically related to Licensed Products shall not be
shared by the Parties.

            11.5 Patent Interferences.

                  (a) Oppositions/Interferences Between The Parties. With
respect to those interferences/oppositions listed on Schedule 11.5(a) and in the
event that an interference is declared by the U.S. Patent and Trademark Office
or an opposition exists between one or more patents or patent applications owned
solely by Elan that are relevant to the collaboration, and one or more patents
or patent applications owned solely by Biogen that are relevant to the
collaboration, or any of the above and one or more patents or patent
applications owned jointly by the Parties pursuant to the collaboration, and
such declared interference or opposition does not involve any patents or patent
applications owned by a Third Party, then the Parties shall in good faith
establish within thirty (30) days hereof or of the declaration of such
interference or opposition or such other time as agreed upon a mutually
agreeable process to resolve such interference or oppositions in a reasonable
manner in conformance with all applicable legal standards, but which prejudices
neither Party nor diminishes the value of the Patents at issue therein, provided
that, notwithstanding anything in this Section to the contrary, Elan shall
withdraw its opposition to those claims of Biogen's EU use patent applicable to
Alpha 4 Integrin antibodies and shall not institute any other opposition to such
claims. Nothing in this Section 11.5(a) shall cause either Party to settle or
withdraw an interference or opposition other than as to a patent claim
specifically covering a Licensed Product, its manufacture or use.

                  (b) Oppositions/Interferences With Third Parties. Other than
as set forth in Section 11.5(a), all decisions relating to interferences or
oppositions with respect to Collaboration Invention Patent Rights, including,
without limitation, whether to initiate such interferences, whether to file
oppositions, appropriate settlement strategy, along with other strategic
decisions relating thereto, shall be made by the JPC. Each party shall control
and have sole discretion, after consultation with the other Party and
consideration in good faith of the other Party's comments, with respect to all
decisions relating to interferences and oppositions relating to all species of
intellectual property covered by this Agreement other than Collaboration
Invention Patent Rights.

                  (c) Oppositions/Interferences Costs. The Parties shall share
the costs of any opposition or interference proceedings relating solely to
Collaboration


                                       59


Invention Patent Rights. No other costs arising out of any interference or
opposition shall be shared between the Parties.

            11.6 INITIAL FILINGS IF MADE OUTSIDE OF THE U.S. The Parties agree
to use reasonable efforts to ensure that any patent filed outside of the U.S.
prior to a U.S. filing will be in a form sufficient to establish the date of
original filing as a priority date for the purposes of a subsequent U.S. filing.

            11.7 Enforcement Rights.

                  (a) Notification of Infringement. If either Party learns of
any infringement or threatened infringement by a Third Party of Elan Patents,
Biogen Patents or Collaboration Invention Patent Rights owned solely or jointly
by the other Party, such Party shall promptly notify the other Party and shall
provide such other Party with available evidence of such infringement.

                  (B) ENFORCEMENT.

            (I) BIOGEN PATENTS. Within a reasonable time prior to Biogen
      bringing any action or proceeding with respect to infringement of any of
      the Biogen Patents, including any Collaboration Invention Patent Rights
      owned solely by Biogen, the Parties shall consult with the JPC to
      determine the best way for the Parties to proceed. If Elan elects, prior
      to the commencement of any such action (or as otherwise agreed), to join
      Biogen in such action because of the significance of the action to the
      future commercialization prospects for Licensed Products, the costs of
      patent enforcement shall be included in Other Out of Pocket Costs, and
      recovery from any settlement or judgment shall be shared by the Parties in
      accordance with their respective Percentages. Alternatively, if Elan
      decides by the date of commencement of any such action not to join Biogen
      in such action, Biogen shall have the right, but not the obligation, to
      institute, prosecute and control, at its own expense, any action or
      proceeding with respect to infringement of any of the Biogen Patents, by
      counsel of its own choice, and Elan shall have the right, at its own
      expense, to be represented in any such action by counsel of its own
      choice. Any damages or other monetary awards recovered from settlement or
      judgment from an action to enforce a patent owned solely by Biogen for
      which Biogen paid its own expense under the preceding sentence shall be
      allocated first to reimburse the costs and expenses of Biogen, then to
      reimburse the costs and expenses, if any, of Elan, and any amounts
      remaining shall be paid to Biogen.

            (II) ELAN PATENTS. Within a reasonable time prior to Elan bringing
      any action or proceeding with respect to infringement of any of the Elan
      Patents, including any Collaboration Invention Patent Rights owned solely
      by Elan, the Parties shall consult with one another to determine the best
      way for the Parties to proceed. If Biogen elects, prior to the
      commencement of any such action (or as otherwise agreed), to join Elan in
      such action because of the significance of the action to the future
      commercialization prospects for Licensed Products, the costs of patent
      enforcement shall be included in Other Out of Pocket Costs and


                                       60


      recovery from any settlement or judgment shall be shared by the Parties in
      accordance with their respective Percentages. Alternatively, if Biogen
      decides by the date of commencement of any such action not to join Elan in
      such action, Elan shall have the right, but not the obligation, to
      institute, prosecute and control at its own expense any action or
      proceeding with respect to infringement of any of the Elan Patents, by
      counsel of its own choice, and Biogen shall have the right, at its own
      expense, to be represented in any such action by counsel of its own
      choice. Any damages or other monetary awards recovered from settlement or
      judgment from an action to enforce a patent owned solely by Elan for which
      Elan paid its own expense under the preceding sentence shall be allocated
      first to reimburse the costs and expenses of Elan, then to reimburse the
      costs and expenses, if any, of Biogen and any amounts remaining shall be
      paid to Elan.

            (III) JOINTLY-OWNED PATENTS. In the event of an infringement of a
      Patent jointly-owned by the Parties, the JSC, with the advice and counsel
      of the JPC, shall decide the best way for the Parties to proceed. If one
      Party brings any such action or proceeding, as approved by the JSC, the
      other Party agrees to be joined as a party plaintiff if necessary to
      prosecute the action or proceeding and to give the first Party reasonable
      assistance and authority to file and prosecute the suit. The costs of
      patent enforcement to enforce any such jointly-owned Patents shall be
      included in Other Out of Pocket Costs and recovery from any settlement or
      judgment shall be shared by the Parties in accordance with their
      respective Percentages.

                  (c) Settlement with a Third Party. The Party that solely
brings suit to enforce a given Elan Patent, Biogen Patent or Collaboration
Invention Patent Right shall also have the right to control settlement of such
claim; provided, however, that if one Party controls, no settlement shall be
entered into without the written consent of the other Party. If there is no
agreement between the Parties regarding such settlement, then the dispute will
be resolved pursuant to Article 16 below. If the dispute is not resolved
pursuant to Article 16, then the case may not be settled.

            11.8 Third Party Patents.

                  (a) Third Party Claims -- Course Of Action. If any of the
Development, Commercialization or manufacturing activities actually conducted or
to be conducted under this agreement become known to a Party hereto or are
alleged by a Third Party to infringe a Third Party's Patent, misappropriate a
Third Party's trade secret or violate a Third Party's trademark or other
intellectual property, the Party becoming aware of such allegation shall
promptly notify the other Party thereof, in writing, reasonably detailing the
claim.

                  (b) Negotiation With A Third Party. Under the circumstances
described in paragraph (a), the JSC shall determine which Party, if any, shall
negotiate with said Third Party for a suitable license or assignment and execute
such license or assignment, provided, however, that such Party shall enter into
no such agreement unless it has first obtained the other Party's written
approval of the terms of such agreement,


                                       61


including the amounts of any royalties or payments, which approval shall not be
unreasonably withheld. If such negotiation results in a consummated agreement
approved by both Parties, the executing Party shall make all payments to the
Third Party and such payments shall be deemed Third Party License Fees for
purposes of this Agreement and the paying Party shall be reimbursed for payment
of such fees in accordance with Section 4.6(e) or as part of Reimbursable
Commercial Costs under Section 6.2.

                  (c) Third Party Suit. If a Third Party sues a Party (the "Sued
Party") alleging that the Sued Party's or the Sued Party's sublicensees'
Development, manufacture or Commercialization activities hereunder infringe or
will infringe said Third Party's patent or misappropriate said Third Party's
trade secret or Third Party's trademark or other intellectual property, then
upon the Sued Party's request and in connection with the Sued Party's defense of
any such Third Party suit, the other Party shall provide reasonable assistance
to the Sued Party for such defense and shall join such suit if deemed a
necessary party. The Sued Party shall keep the other Party, if such other Party
has not joined in such suit, reasonably informed on a quarterly basis, in person
or by telephone, prior to and during the pendency of any such suit. The Sued
Party shall not admit the invalidity of any Patent nor settle any such suit,
without written consent of the other Party, which consent shall not be
unreasonably withheld. The Parties shall equally share in the reasonable
litigation expenses, including settlement costs, royalties paid in settlement of
any such suit, and the payment of any damages to the Third Party, other than
Third Party License Fees which shall be paid pursuant to Section 4.6(e) or as
part of Reimbursable Commercial Costs under Section 6.2.

            11.9 Third Party Licenses.

                  (a) In General. If either Party believes that there exists
Third Party intellectual property that constitutes Blocking Third Party
Intellectual Property or Enhancing Third Party Intellectual Property, as the
case may be, it shall notify the JPC. The JPC shall then determine whether or
not such Third Party intellectual property constitutes Blocking Third Party
Intellectual Property or Enhancing Third Party Intellectual Property, as the
case may be. If the determination of the JPC is affirmative, the Joint Project
Team or the Joint Commercialization team, as the case may be, shall determine
whether, on what terms (economic or otherwise), and by which Party (the
"Licensing Party") such Blocking Third Party Intellectual Property or Enhancing
Third Party Intellectual Property, as the case may be, shall be licensed for the
purposes of this Agreement. Prior to entering into a license agreement with
respect to such Blocking Third Party Intellectual Property or Enhancing Third
Party Intellectual Property, as the case may be, the Licensing Party shall
submit the proposed license agreement to the JSC for approval. If the JSC
approves the proposed license agreement, the Licensing Party shall enter into
such license agreement and shall pay the Third Party License Fees due
thereunder, subject to reimbursement in accordance with Section 4.6(e) or as
part of Reimbursable Commercial Costs under Section 6.2. Any agreement entered
into pursuant to this Section 11.9(a) and any Elan In-License or other
agreements between a Party and any Third Party existing as of the Effective Date
and relating to Elan Patents,


                                       62


Elan Know-how, Biogen Patents or Biogen Know-how, shall not be amended without
prior written consent of the JSC.

                  (b) Failure To Obtain License. If, within one hundred eighty
(180) days after a Licensing Party has been instructed by the Joint Project Team
or the Joint Commercialization Team, pursuant to Section 11.9(a), to attempt to
enter into a license agreement with respect to Blocking Third Party Intellectual
Property or Enhancing Third Party Intellectual Property, as the case may be, it
is determined by the JSC that no license is obtainable on commercially
reasonably terms despite a good faith attempt by such Licensing Party to obtain
such license, then (a) neither Party shall practice the Third Party intellectual
property that was the subject of the proposed license agreement and (b) in the
case of Blocking Third Party Intellectual Property only, neither Party shall
proceed with the Development, Manufacture and/or Commercialization of any
Licensed Product, as the case may be, to the extent doing so would infringe such
Blocking Third Party Intellectual Property.

                  (c) Failure To Reach Agreement. If the JPC is unable to reach
a determination under Section 11.9(a) with respect to whether Third Party
intellectual property constitutes Blocking Third Party Intellectual Property or
Enhancing Third Party Intellectual Property, as the case may be, then such issue
shall be presented to the JSC for determination. If the JSC is unable to resolve
such issue, or is unable to reach a determination under Section 11.9(a) or this
Section 11.9(c) with respect to any issue relating to a proposed license
agreement, then such issue shall be evaluated in accordance with the procedures
set forth in Article 16. If such issue cannot be resolved pursuant to Article
16, then (a) neither Party shall enter into a license agreement with respect to,
nor practice, the Third Party intellectual property that is the subject of the
unresolved dispute and (b) in the case of Blocking Third Party Intellectual
Property only, neither Party shall proceed with the Development, Manufacture
and/or Commercialization of a Licensed Product, as the case may be, to the
extent that at least one of the Parties believes such activities would infringe
such Blocking Third Party Intellectual Property.

                                  ARTICLE 12.
                         REPRESENTATIONS AND WARRANTIES

            12.1 REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby
represents and warrants as of the Effective Date as follows:

            (a) This Agreement is a legal and valid obligation binding upon such
      Party and enforceable in accordance with its terms. The execution,
      delivery and performance of the Agreement by such Party does not conflict
      with any agreement, instrument or understanding, oral or written, to which
      it is a party or by which it is bound, nor violate any law or regulation
      of any court, governmental body or administrative or other agency having
      jurisdiction over it.

            (b) Such Party has not, and during the Term of the Agreement will
      not, grant any rights to any Third Party which would conflict with the
      rights granted to the other Party hereunder.


                                       63


            (c) That such Party has the right to grant the licenses granted
      herein.

            (d) It has no knowledge of any communication from a Third Party
      alleging that the Development, manufacture or Commercialization of
      Licensed Products has violated or would violate any of the intellectual
      property rights owned or controlled by such Third Party.

            (e) All of its employees and officers have executed agreements
      requiring assignment to the Party of all inventions made during the course
      of and as a result of their association with such Party and obligating the
      individual to maintain as confidential the confidential information of
      such Party.

            (f) To its knowledge, none of the data or information given to the
      other Party regarding Antegren is untrue or inaccurate. To its knowledge,
      there is no other data or information necessary to make the data and
      information provided to the other Party regarding Antegren complete and
      not misleading.

            (g) To its knowledge, there are no third party patents that would be
      or might be infringed by the Development, manufacture, use or sale of
      Licensed Product other than those that have been brought to the attention
      of the other Party.

            12.2 ELAN REPRESENTATION REGARDING LONZA. Elan represents and
warrants that the copy of the Lonza Supply Agreement, as amended through
Amendment 17, supplied to Biogen is a true and accurate copy of the sole
agreement in effect between Elan and Lonza related to Licensed Product as of the
Effective Date, other than the letter agreement described in Section 7.1 and its
attachments.

                                  ARTICLE 13.
                 INFORMATION AND ADVERSE DRUG EVENTS AND REPORTS

            13.1 INFORMATION. Biogen and Elan will disclose and make available
to each other in a timely manner all preclinical, clinical, regulatory,
commercial and other information concerning Licensed Products and constituting
Know-how, including, without limitation, all Know-how relevant to the joint
promotion of Licensed Products, known by Biogen or Elan at any time during the
Term of this Agreement. Each Party will use Commercially Reasonable and Diligent
Efforts to disclose to the other Party all significant information directly
related to Licensed Products promptly after it is learned or its significance is
appreciated. Notwithstanding the foregoing, neither Party shall be obligated to
disclose to the other Party confidential information about its products other
than Licensed Product.

            13.2 COMPLAINTS. Each Party shall maintain a record of all
non-medical and medical product-related complaints it receives with respect to
any Licensed Product. Each Party shall notify the other Party of any complaint
received by it in sufficient detail and in accordance with the timeframes and
procedures for reporting established by the Joint Project Team and the Joint
Commercialization Team, and in any event in sufficient time to allow the Party
that holds the applicable regulatory filing to comply with any and


                                       64


all regulatory requirements imposed upon it in any country. The Party that holds
the applicable regulatory filing in a particular country shall investigate and
respond to all such complaints in such country with respect to any Licensed
Product as soon as reasonably practicable. All such responses shall be made in
accordance with the procedures established by the Joint Project Team and the
Joint Commercialization Team. The Party responsible for responding to such
complaint shall promptly provide the other Party a copy of any such response.

            13.3 ADVERSE DRUG EVENTS. Each Party will be responsible for the
safety surveillance and pharmacovigilance regulatory obligations with respect to
the Licensed Product in those territories where it is the sponsor of
non-clinical or clinical development, including but not limited to animal
toxicology or pharmacology studies, or where it is the license holder of the
Licensed Product's Regulatory Approval. Each Party shall provide to the
responsible Party under this Section with data on all adverse drug experience
reports related to Licensed Product in each case in accordance with procedures
established by the Joint Project Team or the Joint Commercialization Team or
pursuant to an adverse event reporting agreement entered into by the Parties.
Elan and Biogen agree to fulfill all their safety surveillance and
pharmacovigilance regulatory obligations with respect to the Licensed Product.
Where a joint venture entity is created by the Parties to be the license holder
of the Licensed Product's Regulatory Approval, the joint venture shall designate
one of the Parties to coordinate safety surveillance and pharmacovigilance
activities. The Parties agree that the groups responsible for the safety
surveillance and pharmacovigilance of the Licensed Product at each company shall
meet within sixty (60) days following the Effective Date to develop detailed
procedures regarding the format, timing, and content of the safety information
to be exchanged between the Parties, and shall meet periodically thereafter to
update the procedures.

                                  ARTICLE 14.
                              TERM AND TERMINATION

            14.1 Term and Purchase Terms Upon Expiration.

                  (a) TERM. This Agreement shall commence as of the Effective
Date. Unless sooner terminated as provided in this Article 14 and except as
provided in Sections 14.1(b) and 14.7 below, the remaining provisions of this
Agreement relating to activities in the Territory shall continue in effect until
*** after the date of the First Commercial Sale of a Licensed Product in a Major
Market Country (the "Term").

                  (B) PURCHASE TERMS UPON EXPIRATION.

            (I) Except as otherwise specified herein in the case of early
      termination of this Agreement, upon the expiration of the Term of this
      Agreement, either Party may propose that it purchase the other Party's
      interest in

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       65


      this Agreement *** . Notice of a Party's desire to purchase the other
      Party's interest shall be given to the non-purchasing Party at least
      eighteen (18) months prior to the end of the Term. *** APPROXIMATELY 16
      LINES OMITTED *** A closing on the purchase of the interest of one Party
      by the other Party shall take place upon expiration of the Term of this
      Agreement. If neither Party desires to purchase the other Party's
      interest, the Parties shall agree to extend this Agreement, including this
      provision, for a mutually agreed upon additional term.

            (II) In the event of a purchase under this Section (b) the following
      shall apply: (i) the non-purchasing Party shall have no further rights
      under the licenses provided to it under Article 8, (ii) the non-purchasing
      Party shall assign to the purchasing Party the non-purchasing Party's
      rights and obligations under any then existing licenses to Blocking Third
      Party Intellectual Property and Enhancing Third Party Intellectual Party
      for Licensed Products, (iii) the non-purchasing Party shall be deemed to
      have granted to the purchasing Party an exclusive worldwide license, with
      the right to grant sublicenses, under the non-purchasing Party's rights
      and interests in all Elan Patents and Elan Know-how (in the case of
      purchase by Biogen) or Biogen Patents and Biogen Know-how (in the case of
      purchase by Elan) solely to develop, use, make, have made, sell, have sold
      and import Licensed Products in the Field in the Territory. The
      non-purchasing Party shall retain all rights and interest in its own
      Patents and Know-how with respect to all products other than Licensed
      Products. In the event of a purchase under this paragraph (b), the
      non-purchasing Party shall, at the expense of the purchasing Party,
      transfer to the other Party ownership of any regulatory submissions
      (including, without limitation, all Clinical Trial Applications and Drug
      Approval Applications) and Regulatory Approvals then in its name for all
      Licensed Product, and shall notify the appropriate Regulatory Authorities
      and take any other action reasonably necessary to effect such transfer of
      ownership. If ownership of a regulatory submission or Regulatory Approval
      cannot be transferred to the purchasing Party in any country, the
      non-purchasing Party shall grant to the purchasing Party a permanent,
      exclusive and irrevocable right of access and reference to such regulatory
      submissions and Regulatory Approvals for Licensed Product in such country.
      If such right of access and reference is not sufficient to permit the
      purchasing Party to develop, make, market, use or sell Licensed Product,
      the non-purchasing Party shall provide the purchasing Party with the
      complete data package that the non-purchasing Party used in regulatory
      submissions in such country in order to allow the purchasing Party to
      receive Regulatory Approval in its own name. In the event of a purchase
      under this Section, the non-purchasing Party shall assign to the
      purchasing Party, at the expense of the purchasing Party, all of
      non-purchasing Party's right, title and interest in the Antegren Trademark
      and any Product Trademarks owned by non-purchasing Party, subject to the
      terms and conditions in Section 9.4 above.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       66


            14.2 Voluntary Termination by Either Party.

                  (a) So long as such Party is not in breach of its obligations
hereunder, either Party shall have the right to terminate this Agreement upon
providing at least sixty (60) days' prior written notice to the other Party. In
the event of termination under this Section 14.2, the following shall apply: (i)
the terminating Party shall have no further rights under the licenses provided
to it under Article 8, (ii) the terminating Party shall assign to the
non-terminating Party the terminating Party's rights and obligations under any
then existing licenses to Blocking Third Party Intellectual Property and
Enhancing Third Party Intellectual Party for Licensed Products, (iii) the
terminating Party shall be deemed to have granted to the non-terminating Party
an exclusive worldwide license, with the right to grant sublicenses, under the
terminating Party's rights and interests in all Elan Patents and Elan Know-how
(in the case of termination by Elan) or Biogen Patents and Biogen Know-how (in
the case of termination by Biogen) solely to develop, use, make, have made,
market, sell, have sold and import Licensed Products in the Field in the
Territory. The terminating Party shall retain all rights and interest in its own
Patents and Know-how with respect to all products other than Licensed Products.
A termination under this Section shall not relieve the terminating Party of any
of its obligations to share in the Development Costs scheduled to be paid
(meaning current obligations have been incurred and amounts are to be actually
paid in the period) prior to the effective date of such termination under the
then current Annual Workplan/Budget. In the event of termination under this
Section, the terminating Party shall, at its cost, transfer to the other Party
ownership of any regulatory submissions (including, without limitation, all
Clinical Trial Application's and Drug Approval Applications) and Regulatory
Approvals then in its name for all Licensed Product, and shall notify the
appropriate Regulatory Authorities and take any other action reasonably
necessary to effect such transfer of ownership. If ownership of a regulatory
submission or Regulatory Approval cannot be transferred to the non-terminating
Party in any country, the terminating Party shall grant to the non-terminating
Party a permanent, exclusive and irrevocable right of access and reference to
such regulatory submissions and Regulatory Approvals for Licensed Product in
such country. If such right of access and reference is not sufficient to permit
the non-terminating Party to file a Drug Approval Application and receive
Regulatory Approval or to develop, make, market, use or sell Licensed Product,
the terminating Party shall provide the non-terminating Party with the complete
data package that the terminating Party used in regulatory submissions in such
country in order to allow the non-terminating Party to file such Drug Approval
Applications and receive Regulatory Approval in its own name. In the event that
Biogen terminates this Agreement pursuant to this Section 14.2(a), Biogen shall
assign to Elan, without cost to Elan, all of Biogen's right, title and interest
in the Product Trademarks owned by Biogen, subject to the terms and conditions
in Section 9.4 above. In the event that Elan terminates this Agreement pursuant
to this Section 14.2(a), Elan shall assign to Biogen, without cost to Biogen,
all of Elan's right, title and interest in the Antegren Trademark and other
Product Trademarks owned by Elan, subject to the terms and conditions in Section
9.4 above.

                  (b) In the event of termination of this Agreement by Biogen
under this Section 14.2, the royalty payment obligations of Elan, shall be as
follows:


                                       67


            (III) If Biogen terminates this Agreement prior to the date of
      enrollment of the first patient in the first Phase III Clinical Trial for
      a chronic indication, Elan shall pay to Biogen a royalty of ***

            (IV) If Biogen terminates this Agreement on or after the date set
      forth in Section 14.2(b)(i) above, but before the date of the First
      Commercial Sale of a Licensed Product in a Major Market Country after a
      Regulatory Approval of the use of a Licensed Product in a chronic
      indication, Elan shall pay to Biogen a royalty of ***

            (V) If Biogen terminates this Agreement on or after the date of the
      First Commercial Sale of a Licensed Product in a Major Market Country
      after a Regulatory Approval of the use of a Licensed Product in a chronic
      indication, Elan shall pay to Biogen a royalty of ***

                  (c) In the event of termination of this Agreement by Elan
under this Section 14.2, the royalty payment obligations of Biogen, shall be as
follows:

            (I) If Elan terminates this Agreement prior to the date of
      enrollment of the first patient in the first Phase III Clinical Trial for
      a chronic indication, Biogen shall pay to Elan a royalty of ***

            (II) If Elan terminates this Agreement on or after the date set
      forth in Section 14.2(c)(i) above, but before the First Commercial Sale of
      a Licensed Product in a Major Market Country after a Regulatory Approval
      of the use of a Licensed Product in a chronic indication, Biogen shall pay
      to Elan a royalty of ***

            (III) If Elan terminates this Agreement on or after the date of the
      First Commercial Sale of a Licensed Product in a Major Market Country
      after a Regulatory Approval of the use of a Licensed Product in a chronic
      indication, Biogen shall pay to Elan ***

                  (d) Prior to the effective date of such termination by one
Party pursuant to this Section 14.3, the Parties shall enter into a definitive
license agreement ("License Agreement") granting to the non-terminating Party
(the "Licensing Party") an exclusive, worldwide, sublicensable license under all
the terminating Party's rights and interests in Elan Patents and Elan Know-how
(in the case of termination by Elan) and Biogen Patents and Biogen Know-how (in
the case of termination by Elan) to develop, make, have made, use, market,
distribute, import, offer for sale, sell and have sold Licensed Product in the
Field, in consideration of the non-terminating Party paying royalties on
Royalty-Bearing Sales of Licensed Product sold by the non-terminating Party and
its Affiliates and sublicensees, at the royalty rate applicable under Section
14.2(a) or 14.2(b) above. Such License Agreement shall contain all of the
provisions described in this Section 14.2, the terms described in

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
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                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


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Section 14.3 below, the definitions set forth in this Agreement above with
respect to Royalty-Bearing Sales and the other defined terms, and such other
terms and conditions that are customary for similar types of transactions.

                  (e) In the event that Biogen terminates this Agreement prior
to initiation of the first Phase III Clinical Trial of Licensed Product,
Biogen's sole obligation with respect to manufacture and supply of Licensed
Product under this Agreement and the Clinical Supply Agreement shall be *** In
the event of termination by either Party pursuant to this Section 14.2 after
initiation of the first Phase III Clinical Trial, in addition to the obligations
specified under paragraph (a) above, the terminating Party shall *** , in order
to allow the other Party to find an alternate source of supply. The sole and
exclusive amount to be paid by the non-terminating Party for supplies of
Licensed Product under the preceding sentence during the period after
termination shall be as follows:



     Period following termination                     Amount to be Paid
     ----------------------------                     -----------------
                                                   
     Up to        ***                                        ***
            ***       months                                 ***
            ***       to         ***                         ***
     months
            ***       to         ***                        ***
     months
            ***       to                                    ***
             ***       months


      In the event the terminating Party is obligated to continue to supply
Licensed Product under this Agreement, the other Party shall use Reasonable
Commercial and Diligent Efforts to identify one or more viable suppliers *** of
termination and to transfer manufacturing operations as soon as commercially
reasonable within the aforementioned *** time frame.

      In addition to the foregoing obligations, the terminating Party agrees to
(i) make its personnel and other resources reasonably available to the other
Party as necessary to effect an orderly transition of manufacturing, Development
and/or Commercialization responsibilities, with the fully-loaded cost of such
personnel and resources to be borne by the non-terminating Party after the
effective date of termination; (ii) for a reasonable period of time *** continue
to assist in a transition of responsibilities to the non-terminating party; and
(iii) transfer copies of all relevant information, files or data

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


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containing Know-how to the non-terminating party. Notwithstanding anything in
the foregoing to the contrary, if the terminating Party is the supplying Party,
the terminating Party will agree to perform technology transfer activities for a
period of up to *** following execution by the non-terminating Party of an
agreement with a new supplier, subject to the payment of costs as set forth in
the preceding sentence.

                  (f) Upon any termination under this Section 14.2, the Parties
shall have no further rights or obligations under this Agreement except as set
forth in this Section 14.2 and in Sections 14.3, 14.9 and 14.10.

            14.3 Termination License Agreement Provisions.

      The License Agreement to be entered into between the Parties pursuant to
Section 14.2 above or Sections 5.8 or 14.6 below shall contain the following
terms and conditions in addition to those customary in license agreements in the
biotechnology industry:

                  (a) Date of Sale. The sales of Licensed Products shall be
      deemed to occur on the earlier of: (i) the date the Licensed Product is
      shipped; or (ii) the date of the invoice to the purchaser of the Licensed
      Product.

                  (b) Royalties. Royalties shall be paid on Royalty-Bearing
      Sales of those Licensed Product sold by the licensee Party, its Affiliates
      and sublicensees in each calendar quarter and which (i) incorporate
      Know-how of the Party granting the license or (ii) the manufacture, use,
      offer for sale, sale or importation of which would, but for the licenses
      granted herein, infringe a valid claim of an issued patent within any
      Patents owned or controlled by the Party granting such royalty-bearing
      license hereunder.

                  (c) One Royalty. The obligation to pay royalties under the
      License Agreement shall be imposed only once with respect to the same unit
      of Licensed Product, at the highest royalty rate applicable, regardless of
      the number of patents and patent applications pertaining thereto.

                  (d) Royalty Payments. Royalty payments shall be made to the
      licensor Party or its designee quarterly within forty-five (45) days
      following the end of each calendar quarter for which royalties are due.
      Each royalty payment shall be accompanied by a report, described in
      subsection (j) below, summarizing the Royalty-Bearing Sales during the
      relevant calendar quarter. All royalty payments not made when due shall
      bear interest, calculated from the date such payment was due, at the rate
      of two percent (2%) over the prime rate of interest as published in the
      weekly Federal Reserve H.15 Bulletin, or any successor bulletin thereto.

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       70


                  (e) Term of Royalty Obligations. The licensee Party shall pay
      royalties to the licensor Party hereunder as to each Licensed Product in
      each country worldwide for the later of: (i) the expiration of the last to
      expire of any issued Patent owned or controlled by the licensor Party that
      covers such Licensed Product in such country or in the country of
      manufacture; or (ii) *** from the date of First Commercial Sale of such
      Licensed Product in such country following Regulatory Approval. Upon
      expiration of the royalty term for a Licensed Product in a country as
      described above, the licensee Party shall thereafter have an exclusive,
      paid-up irrevocable license to make, have made, use, market, sell, offer
      for sale, have sold and import such Licensed Product in that country.

                  (f) Mode of Payment. All payments due shall be made in U.S.
      dollars via wire transfer of immediately available funds, or by such other
      commercially reasonable means as may be designated by the licensor Party,
      and shall be made where directed by the licensor Party from time to time.
      Royalty payments due on Royalty-Bearing Sales in countries or
      jurisdictions outside the U.S. shall be made in U.S. dollars, after being
      converted by the licensee Party into U.S. dollars at the rate of exchange
      for such country's or jurisdiction's currency in U.S. dollars as listed in
      The Wall Street Journal on the last business day of the calendar quarter
      in which such sales were made.

                  (g) Taxes. If laws, rules or regulations require withholding
      of income taxes or other taxes imposed upon payments made to the licensor
      Party, the licensee Party shall make such withholding payments as required
      and subtract such withholding payments from the payments otherwise to be
      paid.

                  (h) Blocked Currency. In each country where the local currency
      is blocked and cannot be removed from the country, royalties shall
      continue to be accrued in such country and Royalty-Bearing Sales in such
      country shall continue to be reported, but such royalties will not be paid
      until they may be removed from the country or at licensor Party's request,
      shall be paid in the local currency into a local bank designated by the
      licensor Party for the account of the licensor Party. If such royalties
      are accrued, then at such time as the licensee Party is able to remove
      currency from such country it shall also remove and pay the royalties
      accrued on the licensor Party's behalf.

                  (i) Records. Any Party making royalty payments under the
      License Agreement, and its Affiliates and sublicensees, shall keep full,
      true and accurate books of account containing all particulars which may be
      necessary for the purpose of showing Royalty-Bearing Sales. Such books of
      account shall be kept at the principal place of business of such Party,
      its Affiliates or sublicensees, as the case may be. Such books and the
      supporting data shall be open at all reasonable times, for three (3)
      calendar years following the end of the calendar

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       71


      year to which they pertain, to the inspection of an independent public
      accountant selected by the reviewing Party and reasonably acceptable to
      the other Party for the purpose of verifying Royalty-Bearing Sales under
      the License Agreement, subject to the provisions of subsection (k) below.

                  (j) Reports. Along with the royalty payments due under the
      License Agreement, a Party making royalty payments hereunder shall deliver
      to the receiving Party a true and accurate report, which sets forth such
      particulars of the business conducted by the paying Party, its Affiliates
      and sublicensees during such preceding calendar quarter as are pertinent
      to an accounting for Royalty-Bearing Sales and deductible expenses. Such
      reports shall include at least the following: (i) the total gross sales of
      Licensed Products occurring during that calendar quarter, (ii) the
      allowable deductions therefrom, (iii) the total Royalty-Bearing Sales of
      Licensed Products occurring during that calendar quarter and (iv) the
      calculation of royalties, if any, due thereon pursuant to the License
      Agreement.

                  (k) Auditing. At the request and expense of a Party receiving
      payments under the License Agreement, the other Party (and its Affiliates
      and sublicensees) shall permit an independent certified public accountant
      selected by the reviewing Party and reasonably acceptable to the Party
      being reviewed, to examine, not more than once in any four (4) consecutive
      calendar quarters during the term of the License Agreement, but including
      one post-termination audit, such books of account and records under
      subsection (i) above as may be necessary to: (i) determine the correctness
      of any report or payment made under the License Agreement; or (ii) obtain
      information as to any payment or reimbursement due for any relevant period
      in the case of the paying Party's failure to report, pay or reimburse
      pursuant to the License Agreement. Any such accountant shall enter into a
      confidentiality agreement with both Parties substantially similar to the
      confidentiality provisions of this Agreement limiting the disclosure and
      use of such information to the purposes germane to this subsection (k).
      Such examination shall be made at reasonable times during regular business
      hours and upon at least twenty (20) business days' prior notice. If such
      accountant reasonably determines that the royalties payable under the
      License Agreement have been, for any calendar year in total, understated
      by the paying Party, such paying Party shall immediately pay all
      understated royalties, together with interest on such royalties from the
      date accrued at a rate of two percent (2%) over the prime rate of interest
      as published in the weekly Federal Reserve H.15 Bulletin, or any successor
      bulletin thereto, and shall pay the reasonable costs of the examination if
      such paying Party has understated such royalties by more than the greater
      of *** .

                  (l) Payments to or Reports by Affiliates and Sublicensees. Any
      payment required under any provision of the License Agreement to be made

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       72


      to either Party or any report required to be made by any Party shall be
      made to or by an Affiliate or sublicensee of that Party if designated by
      that Party as the appropriate recipient or reporting entity.

            14.4 Termination for Breach.

                  (a) Material Breach. If either Party materially breaches this
Agreement at any time, which breach is not cured within sixty (60) days of
written notice thereof from the non-breaching Party (or if such breach is not
susceptible of cure within such period, the breaching Party is not making
diligent good faith efforts to cure such breach), the non-breaching Party shall
have the right to terminate this Agreement. Upon such termination, the Parties
shall have no further rights or obligations under this Agreement except as set
forth in Sections 14.4(b), 14.5, 14.9 and 14.10 below. The Parties acknowledge
and agree that failure to exercise any right or option with respect to any
Licensed Product or to take any action expressly within the discretion of a
Party shall not be deemed to be material breach hereunder.

                  (b) Breaching Party Obligations. In the event of termination
by a Party due to material breach by the other Party, in addition to the
obligations specified in Section 14.6(a), the breaching Party shall: (i) remain
responsible for its share of Development Costs scheduled to be paid (meaning
current obligations have been incurred and amounts are to be actually paid in
the period) during the period ending *** following termination under the Annual
Workplan/Budget in effect on the effective date of termination, (ii) make its
personnel and other resources reasonably available to the other Party as
necessary to effect an orderly transition of Development and/or
Commercialization responsibilities, with the reasonable cost of such personnel
and resources to be borne by the non-breaching Party after the effective date of
termination; (iii) for a reasonable period of time *** , assist in the
transition of responsibilities to the non-breaching Party; and (iv) transfer all
relevant information, files or data to the non-breaching Party. Notwithstanding
anything in the foregoing to the contrary, if the breaching Party is the
supplying Party, the breaching Party will agree to perform technology transfer
activities for a period of up to *** following execution by the non-breaching
Party of an agreement with a new supplier, subject to the payment of costs as
set forth in the preceding sentence. In the event that Elan terminates this
Agreement as a result of breach by Biogen prior to initiation of the first Phase
III Clinical Trial of Licensed Product, Biogen's sole obligation with respect to
manufacture and supply of Licensed Product under this Agreement and the Clinical
Supply Agreement shall be to *** . In the event of termination by either Party
pursuant to this Section 14.4 after initiation of the first Phase III Clinical
Trial, in addition to the obligations specified under paragraph (a) above, the
breaching Party shall remain responsible for supplying the amounts of Antegren
or, as applicable, other Licensed Product, it was obligated to supply at the
time of such termination (consistent with then current forecasts) for a
reasonable period of time, *** in order to allow the other Party to find an
alternate source of supply. The sole and exclusive amount to be

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                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


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paid by the non-breaching Party for supplies of Licensed Product under the
preceding sentence during the period after termination shall be as follows:



     Period following termination                     Amount to be Paid
     ----------------------------                     -----------------
                                                   
     Up to     ***     months                                 ***
               ***     months                                 ***
               ***     months                                 ***


      In the event the breaching Party is obligated to continue to supply
Licensed Product under this Agreement, the other Party shall use Reasonable
Commercial and Diligent Efforts to identify one or more viable suppliers *** of
termination and to transfer manufacturing operations as soon as commercially
reasonable within the aforementioned *** time frame.

            14.5 Effect of Termination for Breach.

                  (a) If either Party terminates this Agreement pursuant to
Section 14.4 above the following shall apply: (i) the breaching Party shall have
no further rights under the licenses granted to it under Article 8; (ii) the
breaching Party shall assign to the non-breaching Party the breaching Party's
rights and obligations under any then existing licenses to Blocking Third Party
Intellectual Property and Enhancing Third Party Intellectual Property for
Licensed Products; and (iii) the breaching Party shall be deemed to have granted
to the non-breaching Party an exclusive, sublicensable, license in the Territory
under the Elan Patents and Elan Know-how (where Elan is the breaching Party) and
the Biogen Patents and Biogen Know-how (where Biogen is the breaching Party) to
develop, make, have made, use, market, sell, offer for sale, have sold or import
Licensed Products in the Field in the Territory. In the event of termination
under this Section, the breaching Party shall, at its cost, transfer to the
non-breaching Party ownership of any regulatory submissions related to Licensed
Product (including, without limitation, all Clinical Trial Applications and Drug
Approval Applications) and Regulatory Approvals then in its name to the
non-breaching Party, and shall notify the appropriate Regulatory Authorities and
take any other action reasonably necessary to effect such transfer of ownership.
If ownership of a regulatory submission or Regulatory Approval cannot be
transferred to the non-breaching Party in any country, the breaching Party shall
grant to the non-breaching Party a permanent, exclusive and irrevocable right of
access and reference to such regulatory submission and Regulatory Approvals for
Licensed Product in such country. If such right of access and reference is not
sufficient to permit the non-breaching Party to file a Drug Approval Application
and receive Regulatory Approval or to develop, make, market, use or sell
Licensed Product, the breaching Party shall provide

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
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                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       74


the non-breaching Party with the complete data package that the breaching Party
used in regulatory submissions in such country in order to allow the
non-breaching Party to file such Drug Approval Applications and to receive
Regulatory Approval in its own name. If the non-breaching Party sells a Licensed
Product under the license granted in this Section 14.5 that would, but for the
license granted herein, infringe a claim of the Patents of the breaching Party,
the non-breaching Party shall pay to the breaching Party a royalty equal to ***
the applicable royalty determined by reference to Section 14.2(b) or (c) as if
the breaching Party had terminated this Agreement under the terms of a License
Agreement to be entered into between the Parties consistent with Section
14.2(d).

                  (b) If this Agreement terminates pursuant to Section 14.4, the
breaching Party shall assign to the non-breaching Party all of its right, title
and interest in the Antegren Trademark and the other Product Trademarks.

            14.6 BANKRUPTCY. Either Party may, in addition to any other remedies
available to it by law or in equity, terminate this Agreement by written notice
to the other Party in the event the other Party shall have become bankrupt, or
shall have made an assignment for the benefit of its creditors or there shall
have been appointed a trustee or receiver of the other Party or for all or a
substantial part of its property or any case or proceeding shall have been
commenced or other action taken by or against the other Party in bankruptcy or
seeking reorganization, liquidation, dissolution, winding-up, arrangement,
composition or readjustment of its debts or any other relief under any
bankruptcy, insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect and any such event shall have continued
for sixty (60) days undismissed, unbonded and undischarged. All rights and
licenses granted under to this Agreement by one Party to the other Party are,
and shall otherwise be deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101 (56) of the Bankruptcy Code. The Parties agree that the licensing
Party under this Agreement shall retain and may fully exercise all of its rights
and elections under the Bankruptcy Code in the event of a bankruptcy by the
other Party as if the other Party were the terminating Party under Section 14.2.
The Parties further agree that in the event of the commencement of a bankruptcy
proceeding by or against one Party under the Bankruptcy Code, the other Party
shall be entitled to complete access to any such intellectual property
pertaining to the rights granted in the licenses hereunder of the Party by or
against whom a bankruptcy proceeding has been commenced and all embodiments of
such intellectual property.

            14.7 Provisions For Change Of Control.

                  (a) Change Of Control Notice. A Party subject to a Change of
Control (the "Acquired Party") shall provide, where possible, written notice to
the other Party (the "Non-Acquired Party") at least sixty (60) days prior to the
Change of Control or, if earlier, as soon as the impending Change of Control can
be disclosed to the Non-

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Acquired Party. Within fifteen (15) days of the receipt of a written notice
pursuant to this Section 14.7(a), the Chief Executive Officer of each Party
shall meet to discuss the impact of any proposed Change of Control upon the
collaboration and the commercial value of the Licensed Products and to discuss
the possible nature of the relationship with the combined entity.

                  (b) Certain Acquisition Rights Upon Change Of Control. In the
event of a Change of Control, the Non-Acquired Party shall have the right,
exercisable in accordance with this Section, to purchase the interest of the
Acquired Party under this Agreement. Within thirty (30) days after receipt of
the written notice required pursuant to Section 14.7(a), the Non-Acquired Party
must give written notice to the Acquired Party of its own election to either (i)
continue it obligations under this Agreement after the Change of Control or (ii)
exercise its right to purchase the interest of the Acquired Party after the
Change of Control. In determining whether to exercise its option to purchase the
Acquired Party's interest in this Agreement, among other matters selected in its
sole discretion, the non-Acquired Party shall consider any proposed post-Change
of Control strategies and plans, commitments or guarantees respecting the
Licensed Product presented by the Acquired Party. Notwithstanding the foregoing,
the ultimate decision of whether to exercise its right under this Section will
be at the sole discretion of the non-Acquired Party. In the event the
Non-Acquired Party exercises its election to purchase the interest of the
Acquired Party under this Agreement, the Parties shall *** APPROXIMATELY 15
LINES OMITTED ***

                  (c) *** APPROXIMATELY 21 LINES OMITTED ***

                  (d) Closing. Closing on the sale of Party's interest under
this section shall take place within thirty (30) days of the determination under
this Section as to the price and which Party will be the purchaser.

                  (e) Rights and Obligations. The rights and obligations of each
Party in the event of a purchase of a Party's interest under this Section shall
be those specified under Section 14.1(b)(ii).

                  (f) Confirmation. Within thirty (30) days after receipt of
notice from the Non-Acquired Party of its interest to continue under the
Agreement after a Change of Control, the Acquired Party shall provide to the
Non-Acquired Party written confirmation reasonably satisfactory to the
Non-Acquired Party to the effect that after such Change of Control, the Acquired
Party will continue to meet its obligations under this Agreement and will commit
to maintain sufficient resources in performing work under this Agreement
consistent with the terms of this Agreement and the then current Development
Plan, Annual Workplan/Budget or Commercialization Plan, and Annual
Commercialization Plan/Budget, as applicable.

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                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


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            14.8 DISPOSITION UPON DIVESTITURE. If any governmental agency
requires either Party (the "Divesting Party") (including, but not limited to
pursuant to a consent decree) to divest its interest to any Licensed Products or
this Agreement (the "Divested Asset(s)"), the Divesting Party shall provide
written notice of such a requirement to the other Party within thirty (30) days
of its first notice of such a condition that has been made final. The other
Party shall have the right to purchase the Divesting Party's interest in the
Divested Asset(s) for fair consideration. *** APPROXIMATELY 13 LINES OMITTED ***
The rights and obligations of each Party in the event of a purchase of a Party's
interest under this Section shall be those specified under Section 14.1(b)(ii).

            14.9 SURVIVING RIGHTS. Except as modified above in Sections 14.1
(b), 14.2, 5.8, 14.4, 14.5 and 14.7, the obligations and rights of the Parties
under Articles 10, 12, and 15 and Sections 8.6, 11.1, 11.2, 11.3, 11.4, and
14.10 of this Agreement will survive termination or expiration of this Agreement
(in the case of Article 10 for the periods set forth therein).

            14.10 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Expiration or
termination of this Agreement shall not relieve the Parties of any obligation
accruing before such expiration or termination. Any expiration or early
termination of this Agreement shall be without prejudice to the rights of either
Party against the other accrued or accruing under this Agreement before
termination, including, without limitation, the obligation to receive payments
with respect to Licensed Product(s) sold before such termination.

                                    ARTICLE 15.
                                 INDEMNIFICATION

            15.1 Indemnification in the Territory.

                  (a) Each Party hereby agrees to save, defend and hold the
other Party and its agents and employees harmless from and against any and all
losses, damages, liabilities, settlements, penalties, fines, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
(collectively, the "Losses") resulting directly or indirectly from the use,
handling, storage, sale or other disposition of Licensed Products sold or used
in the Territory by the indemnifying Party, its Affiliates, agents or
sublicensees, but only to the extent such Losses *** of the indemnifying Party
or its employees and agents and do not also *** of the Party seeking
indemnification. Any other Losses resulting directly or indirectly from the
manufacture, use, handling, storage, sale or other disposition of Licensed
Products in the Territory *** at the time such claim is finally determined,
whether by judgment, award, decree or settlement.

                  (b) In the event that either Party receives notice of a claim
with respect to a Licensed Product in the Territory, such Party shall inform the
other Party as

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soon as reasonably practicable. The Parties shall confer on how to respond to
the claim and how to handle the claim in an efficient manner.

                  (c) In the event that a Party is seeking indemnification under
Section 15.1 (a), it shall inform the indemnifying Party of a claim as soon as
reasonably practicable after it receives notice of the claim, shall permit the
indemnifying Party to assume direction and control of the defense of the claim
(including the right to settle the claim solely for monetary consideration),
shall cooperate as requested (at the expense of the indemnifying Party) in the
defense of the claim, and shall not settle or compromise the claim without the
express written consent of the indemnifying Party.

            15.2 INSURANCE. Beginning on the date that the first Licensed
Product is first administered in a human clinical trial in any country in the
Territory, Elan and Biogen shall each procure and maintain, at its own cost, the
following insurance coverages:

            (a) Commercial General Liability, including coverage for products
      and completed operations (maintained for a period of at least *** years
      after the expiration or termination of this Agreement) and contractual
      liability (including coverage for advertising and personal injury). The
      policy shall have a limit of no less than *** each occurrence.

            (b) Foreign Local Coverage: Where required by law, foreign local
      coverages in an amount that, at a minimum, satisfies the legal
      requirements of that jurisdiction.

            (c) Policy Conditions: All policies under (a) and (b) above shall:

            (I) be written by insurance companies with an A.M. Best's rating of
      A:VIII or higher; and

            (II) provide that coverage under such policy shall not be suspended,
      voided, canceled, non-renewed, reduced in scope or limits below *** ,
      except after thirty (30)-days written notice has been given to the other
      Party.

      Each Party shall name the other Party as an additional insured under such
coverages and shall provide to the other Party a copy of the corresponding
certificate of insurance reflecting such coverages.

                                  ARTICLE 16.
                              DISPUTE RESOLUTION

            16.1 DISPUTES. The Parties recognize that disputes as to certain
matters may from time to time arise during the Term of this Agreement which
relate to either

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Party's rights and/or obligations hereunder. It is the objective of the Parties
to establish procedures to facilitate the resolution of disputes arising under
this Agreement in an expedient manner by mutual cooperation and without resort
to litigation. To accomplish this objective, the Parties agree to follow the
procedures set forth in this Article 16 if and when a dispute arises under this
Agreement. Unless otherwise specifically recited in this Agreement, disputes
among members of the Joint Project Team, the JCT, or the Joint Patent Committee
will be resolved by submission to the JSC. Such submission shall occur within
twenty (20) days of the date of the last meeting at which the Joint Project
Team, the JCT or the Joint Patent Committee, as the case may be, was unable to
resolve the issue. The JSC will hear the disputed matter in as timely a manner
as possible. If the JSC is unable to reach a decision, such matter shall be
referred for resolution to the Chief Executive Officer, Biogen and the Chief
Executive Officer, Elan Corporation, plc (or such other officer exercising the
duties of such office). In the event that a dispute is not resolved by the Chief
Executive Officers within thirty (30) days of being requested by a Party to
resolve the dispute and the dispute solely relates to physical product
development, process development and/or manufacturing of Licensed Product,
Biogen shall have final decision-making authority but will make such decision in
good faith and consistent with Section 7.1(f); otherwise the matter shall be
referred to mediation under Section 16.2.

            16.2 MEDIATION. If a dispute arises between the Parties, and if such
dispute cannot be resolved pursuant to Section 16.1 above, the Parties agree to
try in good faith to resolve any dispute, controversy or claim (except as to any
issue relating to intellectual property) arising out of or relating to this
Agreement, or the breach, termination, or invalidity thereof, by non-binding
mediation administered by the American Arbitration Association in accordance
with its commercial mediation rules. Unless otherwise mutually agreed upon by
the Parties, the mediation proceedings shall be conducted in New York. The
Parties agree that they shall share equally the cost of the mediation, including
filing and hearing fees, and the cost of the mediator(s). Each Party will bear
its own attorneys' fees and associated costs and expenses.

            16.3 ARBITRATION. If the Parties are unable to resolve a dispute
through mediation under Section 16.2, they shall enter into arbitration under
the terms of this Section. Within ten (10) days of delivery of notice from one
Party to the other requesting arbitration under this Section, each Party shall
select one expert in the field of drug development if the dispute relates to
Development or drug commercialization if the dispute relates to
Commercialization, to serve on an arbitration panel to decide the issue. The
expert selected by a Party shall not be a past or present employee of or
consultant to such Party or of any Affiliate of such Party. The members of the
panel selected by the Parties shall, within five (5) days of their selection,
select a third member to serve on the panel who shall not be a past or present
employee of or consultant to either Party. If the members of the panel selected
by the Parties cannot, within ten (10) days of their selection, agree on a third
member, the Parties shall request that the American Arbitration Association
("AAA") select the third member who shall not be a past or present employee of
or consultant of either Party or of any Affiliate of either Party. Each Party
shall then have fifteen (15) days to submit to the panel and to the other Party
a written response presenting such Party's position on the issue. The panel
shall, within fifteen


                                       79


(15) days after receipt of both Parties responses, hold a joint meeting on the
issue at which each Party will have an opportunity to make a presentation and to
respond to the other Party's presentation. Within fifteen (15) days of the
conclusion of the meeting, the panel shall render its decision in writing. The
decision of the panel shall be binding on both Parties. Each Party shall bear
its own costs in connection with the arbitration proceedings, including the
costs of the panel member selected by it. The costs of the third panel member
will be shared equally. The arbitration shall be held in the United States and
conducted under the rules of the AAA, except as otherwise expressly provided in
this Section.

            16.4 MATTERS TO PROCEED TO COURT . Notwithstanding the foregoing,
any dispute relating to the determination of validity of a Party's Patents or
other issues relating solely to a Party's intellectual property and any dispute
asserting breach of this Agreement or of the representations and warranties made
hereunder shall be submitted exclusively to the federal court in New York, and
the Parties hereby consent to the jurisdiction and venue of such court.

                                    ARTICLE 17.
                                  MISCELLANEOUS

            17.1 ASSIGNMENT. Neither this Agreement nor any right or obligation
hereunder may be assigned or delegated, in whole or part, by either Party
without the prior express written consent of the other, except as expressly set
forth below in this Section 17.1. Notwithstanding the foregoing, either Party
may assign this Agreement and its rights and delegate its obligations hereunder
to any of its Affiliates or, with the written consent of the other Party which
such consent shall not be unreasonably withheld, to a Third Party in connection
with the transfer or sale of all or substantially all of its business relating
to the subject matter of this Agreement (provided that any such assignment to a
Third Party shall be deemed a Change in Control of the assigning Party for
purposes of Section 14).

            17.2 LEGAL COMPLIANCE. Each Party shall comply in all material
respects with all laws, rules and regulations applicable to the conduct of its
business in the Territory pursuant to this Agreement.

            17.3 RETAINED RIGHTS. Nothing in this Agreement shall limit in any
respect the right of either Party to conduct research and development with
respect to, or market, any products that do not constitute Licensed Products in
or outside the Field using such Party's own technology.

            17.4 FORCE MAJEURE. Neither Party shall lose any rights hereunder or
be liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, peril of the sea, lockout, embargo,
act of God, or any other cause beyond the control and without the fault or
negligence of the defaulting Party, provided that the Party claiming force
majeure has exerted all reasonable efforts to avoid or remedy such force
majeure; provided, however, that in no event shall a Party be required to settle
any labor


                                       80


dispute or disturbance. Such excuse shall continue as long as the condition
preventing the performance continues. Upon cessation of such condition, the
affected Party shall promptly resume performance hereunder. Each Party agrees to
give the other Party prompt written notice of the occurrence of any such
condition, the nature thereof, and the extent to which the affected Party will
be unable to perform its obligations hereunder. Each Party further agrees to use
all reasonable efforts to correct the condition as quickly as possible and to
give the other Party prompt written notice when it is again fully able to
perform its obligations.

            17.5 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

            17.6 NO RIGHT TO USE NAMES. Except as otherwise provided herein, no
right, express or implied, is granted by this Agreement to use in any manner the
name "Elan," "Biogen" or any other trade name or trademark of a Party or its
Affiliates in connection with the performance of this Agreement.

            17.7 NOTICES. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof).

      IF TO ELAN,
      ADDRESSED TO:  ELAN PHARMA INTERNATIONAL LIMITED

                     WIL House Shannon Business Park
                     Shannon, County Clare
                     Ireland

                     Attention: President
                     Telephone: 353-61-362-533
                     Telecopy:  353-61-362-010

                     with a copy to Elan Pharmaceuticals, Inc.
                     Attention: President
                     Telephone: (650) 877-0900
                     Telecopy:  (650) 553 7165

      IF TO BIOGEN,
      ADDRESSED TO:  BIOGEN INC.
                     14 Cambridge Center
                     Cambridge, MA 02142
                     Attention: Vice President - Business and Market Development


                                       81


                     Telephone: (617) 679-2000
                     Fax:       (617) 679-2804

                     with a copy to: Vice President - General Counsel
                     Telephone: (617) 679-2000
                     Fax:       (617) 679-2838

            17.8 WAIVER. Except as specifically provided for herein, the waiver
from time to time by either of the Parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of the same or of any other of such Party's rights or remedies provided
in this Agreement. Except as set forth in Article 16, nothing in this Agreement
shall be construed to limit in any way either Party's rights and remedies in the
event of breach by the other Party of any term of this Agreement or the failure
of any representation or warranty by the other Party to be true and accurate
when made.

            17.9 SEVERABILITY. If any term, covenant or condition of this
Agreement or the application thereof to any Party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then (a) the remainder of this
Agreement, or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.

            17.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with, the laws of the State of New York without giving
effect to principles of conflict of laws.

            17.11 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not
be construed against any Party, irrespective of which Party may be deemed to
have authorized the ambiguous provision.

            17.12 HEADINGS. All headings are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.

            17.13 COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

            17.14 ENTIRE AGREEMENT. This Agreement, including all Exhibits
attached hereto which are hereby incorporated herein by reference, sets forth
all the covenants, promises, agreements, warranties, representations, conditions
and understandings between the Parties hereto with respect to the subject matter
hereof and,


                                       82


except as otherwise set forth herein, supersedes and terminates all prior
agreements and understandings between the Parties. There are no covenants,
promises, agreements, warranties, representations, conditions or understandings,
either oral or written, between the Parties with respect to the subject matter
hereof other than as set forth herein and therein. No subsequent alteration,
amendment, change or addition to this Agreement shall be binding upon the
Parties hereto unless reduced to writing and signed by the respective authorized
officers of the Parties.

            17.15 INDEPENDENT CONTRACTORS. Both Parties are independent
contractors under this Agreement. Nothing herein contained shall be deemed to
create an employment, agency, joint venture or partnership relationship between
the Parties or any of their agents or employees, or any other legal arrangement
that would impose liability upon one Party for the act or failure to act of the
other Party. Neither Party shall have any express or implied power to enter into
any contracts or commitments or to incur any liabilities in the name of, or on
behalf of, the other Party, or to bind the other Party in any respect
whatsoever.

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                                       83


      IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.

ELAN PHARMA INTERNATIONAL LIMITED         BIOGEN, INC.


By:                                       By:
   ------------------------------            -----------------------------------
Name:  David J. Hurley                    Name:  James C. Mullen
Title: Director                           Title: President and Chief Executive
                                                 Officer


                                       84


EXHIBIT A

Alpha 4 Integrin

                  ***   APPROXIMATELY 5 LINES OMITTED   ***

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.



EXHIBIT B

                  FINANCIAL PLANNING, ACCOUNTING AND REPORTING
             FOR THE ELAN/BIOGEN ANTEGREN DEVELOPMENT AND MARKETING
                                  COLLABORATION
                                    AGREEMENT

            This Exhibit B to the Antegren Development and Marketing
Collaboration Agreement (the "Agreement") dated as of June 30,2000, between Elan
Pharma International Limited and Biogen, Inc. ("Biogen") covers financial
planning, accounting policies and procedures to be followed in determining
Development Costs and Reimbursable Commercial Costs as well as in determining
the applicable Transfer Price pursuant to the Agreement.

            For such purpose, this Exhibit B sets forth the principles for
reporting actual results and budgeted plans in the Territory, the frequency of
reporting, the use of a single "Functional Currency" (as defined in A.3 below)
and the methods of determining payments to the Parties, auditing of accounts and
other matters.

            This Exhibit B also provides agreed upon definitions of financial
terms applicable to the Parties for purposes of the Agreement. All capitalized
terms used herein without definition shall have the meanings ascribed thereto in
the Agreement and, where applicable, the further definitions contained herein.
References in this Exhibit B to a "Party" or "Parties" shall be construed to
mean Biogen or Elan, as the case may be, and in every case shall be deemed to
include a Party's Affiliates or permitted sublicensees under the Agreement.

            The contents of this Exhibit B are hereby incorporated into the
Agreement and are governed by the terms and conditions of the Agreement,
including the confidentiality provisions set forth therein. Notwithstanding
anything in this Agreement to the contrary, no cost, expense, amount or sum
allocable or chargeable to the Parties' activities hereunder shall be allocated
or charged more than once. Unless otherwise specifically authorized by the
Parties or this Agreement, all costs, expenses, amounts or sums to be charged or
allocated by one Party to the other Party hereunder shall not be so chargeable
or allocable unless they are both directly related to the Parties' collaboration
under this Agreement and are reasonable and customary with respect to the global
pharmaceutical industry considering the respective size and activities of the
two Parties.

A. DEFINITIONS, REPORT AND RECONCILIATION

A.1. DEFINITIONS

            A.1.1. "ALLOCABLE OVERHEAD" shall mean costs incurred by a Party or
for its account which are attributable to a Party's facilities and occupancy
costs and its information systems, human relations and purchasing functions and
which are allocated to company departments based on space occupied or headcount
or other activity-based method consistently applied by a Party, or a standard
rate if agreed to by the Parties. Allocable Overhead shall not include any costs
attributable to general corporate activities including, by way of example,
executive management, investor relations, business development, legal affairs
and finance.



            A.1.2. "COST OF GOODS MANUFACTURED FOR SALE" shall mean a Party's
costs to produce Clinical Supplies and/or Commercial Supplies of Licensed
Product to the extent that such costs could be included as an inventory cost
under U.S. GAAP plus the Cost of Capital Charge.

            A.1.3. "COST OF CAPITAL CHARGE" shall mean a cost of capital charge
intended to allow the manufacturer to recover its cost of capital on those
capital assets (direct and indirect) used in the manufacture and production of
Licensed Product, based on percentage utilization of the facility in the
manufacture of Licensed Product, as determined under U.S. GAAP, which shall be
sufficient to provide a *** cost of capital rate of return on the gross book
value of the asset over the life of the asset, provided, however, that the base
of total capital assets on which the Cost of Capital Charge is calculated shall
not exceed *** . For purposes of this Section A. 1.3, direct assets are those
assets within and including the building where manufacturing takes place and/or
directly used in the manufacturing process. Indirect assets include those assets
used to support or facilitate manufacturing facilities, but not directly
involved in the manufacturing process.

            A.1.4. "DEVELOPMENT COSTS" shall mean the costs and expenses
associated with Development activities actually incurred by Biogen or Elan from
March 1, 2000 through the later of (a) the date of the last Regulatory Approval
obtained (including thereafter costs to maintain or expand such Regulatory
Approval) in the Territory, or (b) the date of termination of Development of the
final indication for which Regulatory Approval is to be sought in the Territory,
provided that, with respect to the Initial Period, only Included Initial Period
Costs, as defined in Section 4.6(c), shall be included. The costs and expenses
associated with Development activities shall include those costs required to
obtain, maintain and/or expand the authorization and/or ability to manufacture,
formulate, fill, ship and/or sell Licensed Product in commercial quantities to
Third Parties in the Territory. "Development Costs" shall also include, but are
not limited to, costs of research or Development, including costs of studies on
the toxicological, pharmacological, metabolical or clinical aspects of a
Licensed Product conducted internally or by individual investigators or
consultants and necessary for the purpose of obtaining, maintaining and/or
expanding marketing approval of a Licensed Product, process development, process
improvement and scale-up and recovery costs (including plant costs), validation
costs, including qualification lots, the manufacture of Clinical Supplies of
Licensed Product, costs for preparing, submitting, reviewing or developing data
or information for the purpose of submission to a governmental authority to
obtain, maintain and/or expand manufacturing and/or marketing approval of a
Licensed Product and costs of marketing studies related to Licensed Product.
"Development Costs" shall also include expenses for data management, statistical
designs and studies, document preparation, and other administration expenses
associated with the clinical testing program. In determining "Development Costs"
chargeable under this Agreement, each Party will use its respective project
accounting systems, and will

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       2


review and approve its respective project accounting systems and methodologies
with the other Party. The Parties hereby agree that efforts of the employees of
a Party or its Affiliates in performing its activities hereunder shall be
charged as Development Costs at the applicable FTE Rate. Notwithstanding
anything in this Section A. 1.4 to the contrary, only those Development Costs
that are contemplated by the Development Plan and an Annual Workplan/Budget or
were otherwise approved by the JSC shall be chargeable by a Party as Development
Costs with any cost overruns treated in the manner set forth in Section 4.6(d)
of the Agreement. All payments made by a Party to a Third Party in connection
with the performance of its activities under the Development Plan and an Annual
Workplan/Budget shall be charged as Development Costs at such Party's actual
out-of-pocket cost. The costs of manufacturing Clinical Supplies of Licensed
Product shall be charged as Development Cost in an amount equal to *** of the
Cost of Goods Manufactured for Sale for such manufacture and supply. Except to
the extent included in Cost of Goods Manufactured for Sale under the preceding
sentence, expenses incurred by each Party for equipment, materials and supplies
utilized in performing its activities under the Development Plan and an Annual
Workplan/Budget shall not be separately charged as Developments Costs, except
for those expenses incurred by a Party, with the prior written consent of the
JSC as set forth in the Development Plan and Annual Workplan/Budget, in the
purchase or making of equipment, materials or supplies (other than common
laboratory supplies, e.g., pipettes, test tubes, petri dishes, reagents, and the
like) that are to be used exclusively in connection with the performance of such
Party's activities under a Development Plan and an Annual Workplan/Budget (e.g.,
laboratory animals, placebo supplies, etc.), which expenses shall be charged as
Developments Cost at such Party's actual out-of-pocket expense incurred in
purchasing or making such equipment, materials or supplies.

            A.1.5. "DISTRIBUTION COSTS" shall mean the FTE costs and other costs
specifically identifiable or allocable to the distribution of Licensed Product
by a Party and described in an Annual Commercialization Plan/Budget including
order entry, billing, shipping, credit and collection and other such activities
as approved by the JCT. For purposes of this definition, FTE costs shall be
charged at the applicable FTE Rate.

            A.1.6. "GROSS SALES" shall mean the gross amount invoiced by either
Party or their Affiliates or permitted sublicensees for sales of a Licensed
Product to Third Parties in the Territory, subject to adjustment under Section
1.20 with respect to Combination Products.

            A.1.7. "MARKETING COSTS" shall mean the FTE costs and other costs of
marketing, promotion, advertising, including, without limitation, costs for
preparing and reproducing detailing aids, Licensed Product Promotional Materials
and other promotional materials, costs of professional education, product
related public relations, relationships with opinion leaders and professional
societies, market research (before and after product approval), healthcare
economics studies, Post-Approval Clinical Trials,

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       3


and other similar activities directly related to the Licensed Products, in each
case as approved by the JCT as part of the Commercialization Plan and an Annual
Commercialization Plan/Budget Such costs will include both internal FTE costs
and outside services and expenses (e.g., consultants, agency fees, meeting
costs, etc.). "Marketing Costs" shall also include activities related to
obtaining reimbursement from payers, costs of sales and marketing data, the
costs of manufacturing and distributing Samples to the extent a Sampling Program
has been approved by the JCT and all activities reasonably related thereto.
"Marketing Costs" will specifically exclude the costs of activities which
promote either Party's business as a whole without being product specific (such
as corporate image advertising) and costs already included as Sales Costs. For
purposes of this definition, FTE costs shall be charged at the applicable FTE
Rate.

            A.1.8. "NET SALES" shall mean Gross Sales of a Licensed Product less
applicable Sales Returns and Allowances.

            A.1.9. "ONGOING DEVELOPMENT EXPENSE" shall mean FTE costs and other
costs and expenses borne by either Party with respect to Phase IV Clinical
Trials approved by the JCT and other expenses approved by the JCT associated
with market positioning of a Licensed Product to the extent not otherwise
included within Development Costs, Marketing Costs or Sales Costs. For purposes
of this definition, FTE costs shall be charged at the applicable FTE Rate.

            A.1.10. "OTHER OUT OF POCKET COSTS" shall mean other operating
expenses paid to Third Parties which are not part of Development Costs,
Distribution Costs or other Reimbursable Commercial Costs, but are considered
and approved by the Joint Project Team, the JCT and/or JSC as expenses for
purposes of the cost sharing arrangements under the Agreement. Other
Out-of-Pocket Costs shall be limited to the following:

                  -     Third Party License Fees (other than those related to
                        the manufacture of Licensed Product which are to be
                        included as part of Fully Absorbed Standard Costs)

                  -     Patent Costs and trademark costs (as limited by Articles
                        9 and 11 of the Agreement)

                  -     product liability insurance to the extent the Parties
                        obtain a joint policy

                  -     indemnification costs (as defined in Article 15 of the
                        Agreement)

                  -     other (to be approved by JSC)

            A.1.11. "PATENT COSTS" shall mean the fees and expenses paid to
outside legal counsel and experts, and filing and maintenance expenses, incurred
after the Effective Date, in connection with the establishment and maintenance
of Collaboration Patent Rights and under Patents covering any Licensed Product
(to the extent to be shared by the Parties under the Agreement), including, to
the extent specified in Article 11 of the Agreement, costs of patent
interference, reexamination, reissue, opposition and revocation proceedings.


                                       4


            A.1.12. "PRE-MARKETING EXPENSES" shall mean FTE costs and those
out-of-pocket expenses incurred on a country-by-country basis and
region-by-region basis, by either Party, other than Development Costs, before
Regulatory Approval of Antegren or, as applicable, other Licensed Product, in
such country, directly attributable to the carrying out of such Party's
obligations under the Commercialization Plan or an Annual Commercialization
Plan/Budget, as applicable, in preparation for Commercialization in such
country. Such expenses may include, without limitation, costs incurred for
professional education, Commercialization-related public relations,
relationships with opinion leaders and professional societies, market research,
health care economics studies, amounts paid Third Parties by a Party at
reasonable rates pre-approved by the JSC, and establishment of the supply chain
for the distribution and sale in such country, each to the extent allocable to
Licensed Product and as described in the then current Commercialization Plan and
an Annual Commercialization Plan/Budget. For purposes of this definition, FTE
costs shall be charged at the applicable FTE Rate.

            A.1.13. "REIMBURSABLE COMMERCIAL COSTS" shall mean Distribution
Costs, Marketing Costs, ongoing, Development Expense, Other Out of Pocket Costs
and Sales Costs.

            A.1.14. "SALES COSTS" shall mean FTE costs and other costs approved
by the JCT as part of the Commercialization Plan and an Annual Commercialization
Plan/Budget and specifically identifiable to sales of Licensed Product in the
Territory. Sales Costs shall include costs associated with Sales Representatives
and training of the Sales Representatives, sales meetings, details, sales call
reporting, work on managed care accounts, costs related to customer service and
other sales and customer service-related expenses. Sales Costs will not include
start-up costs associated with either Party's sales force, including recruiting,
relocation and other similar costs. For purposes of this definition, FTE costs
shall be charged at the applicable FTE Rate.

            A.1.15. "SALES RETURNS AND ALLOWANCES" shall mean the sum of (a) and
(b), where: (a) is a provision, determined by a Party under U.S. GAAP for sales
of Licensed Products in the Territory for (i) trade, cash and quantity discounts
on Licensed Products (other than price discounts granted at the time of
invoicing and which are already included in the determination of Gross Sales),
(ii) credits or allowances given or made for rejection or return of, and for
uncollectible amounts on, previously sold Licensed Products or for rebates or
retroactive price reductions (including Medicare, Medicaid and similar types of
rebates and chargebacks), (iii) taxes, duties or other governmental charges
levied on or measured by the billing amount for Licensed Products, as adjusted
for rebates and refunds, (iv) charges for freight and insurance directly related
to the distribution of Licensed Products, to the extent included in Gross Sales,
and (v) credits for allowances given or made for wastage replacement, indigent
patient and any other sales programs agreed to by the Parties for Licensed
Products; and (b) is a periodic adjustment of the provision determined in (a) to
reflect amounts actually incurred by a Party in the Territory for items (i),
(ii), (iii), (iv) and (v) in clause (a). The provision allowed in clause (a) and
adjustments made in clause (b) (if any) will be reviewed by the Joint
Commercialization Team and approved by the JSC.


                                       5


            It is the intention of the Parties that the interpretation of these
definitions in this Exhibit B will be consistent with generally accepted
accounting principles ("GAAP") in the U.S. If necessary, a Party will make the
appropriate adjustments to the financial information it supplies under the
Agreement to conform to the above format of reporting results of operation.

            A.2.1. REPORTING

            Each Party shall report to the other Party forecasts, budgets and
actual results of operations related to the following:

            Development Costs
            Premarketing Expenses
            Marketing Costs
            Sales Costs
            Ongoing Development Expenses
            Other Out of Pocket Costs
            Gross Sales
            Net Sales
            Distribution Costs
            Sales Returns and Allowances
            Number of units sold
            Cost of Goods Manufactured for Sale

            Reporting by each Party will be performed as follows:



Reporting Event                                 Frequency                Timing of Submission
- ---------------                                 ---------                --------------------
                                                                   
Actuals                                         Quarterly                Calendar Quarter end + 14 business days

Forecasts                                       Quarterly                One month following
Calendar                                                                 Quarter end
(four quarter rolling - by month)

Preliminary Budgets                             Annually                 September 15
(one year - by month)




Reporting Event                                 Frequency                Timing of Submission
- ---------------                                 ---------                --------------------
                                                                   
Final Budgets                                    Annually                October 31
(one year - by month)

Long Range Plan                                  Annually                May 15
(current year plus 2 years)



                                       6


            In addition to the foregoing, beginning upon first launch if
Licensed Product, on a monthly basis, the Distributing Party will supply the
other Party with each month's Distribution Costs number of units sold and Gross
Sales and Net Sales of Licensed Products in units, local currency and U.S.
dollars (using the month-end rate for conversion for such month as shown in The
Wall Street Journal) by country in the Territory according to the Distributing
Party's sales reporting system, which shall be consistent with the definitions
herein. Each such report shall be provided as early as possible, but no later
than five (5) days after the last day of the month in question, and shall
separately provide monthly and year-to-date cumulative figures.

            The financial representatives from the Parties will meet as
appropriate but at least quarterly to review and approve the following:

            -     actual results

            -     forecasts

            -     budgets

            -     inventory levels

            -     Sales Returns and Allowances

            -     other financial matters, including but not limited to each
                  Party's methodologies for charging costs and allocating Sales
                  Representatives to activities related to Licensed Product for
                  determination of actuals, forecasts, budgets and long range
                  plans and the results of applying such methodologies.

            Costs included in Cost of Goods Manufactured For Sale are not
subject to JSC approval as long as they are consistent with the definitions.

            A.2.2. RECONCILIATION STATEMENTS. Within fourteen (14) business days
following the end of a Calendar Quarter, each Party shall submit to the other
Party its report of actual results as outlined above (including a summary of
charges and credits allocated to its Development Cost Project Account as
referred to in Section 4.6(b)). Expenses charged by either Party as Development
Costs or Reimbursable Commercial Costs shall not exceed *** of the amount
included for the total expenditure in the then current Development Plan, Annual
Workplan/Budget, Commercialization Plan or Annual Commercialization Plan/Budget,
as the case may be, unless the Joint Project Team or JCT, as appropriate,
recommends, and the JSC approves such excess expense.

            The financial representatives from each Party on the Joint Project
Team or the Joint Commercialization Team, as applicable, shall be responsible
for, within twenty one (21) days following the end of a Calendar Quarter,
preparing a statement ("Reconciliation Statement") in a format agreed to by the
Parties showing each Party's results, the calculations of Development Cost
sharing under Section 4.6, the calculation of Reimbursable Commercial Cost
sharing under Section 6.2, the application of credits available under Section
6.2, and any cash settlement required. The Reconciliation

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                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       7


Statement and reports of actual results compared to budget will be sent to the
Joint Project Team or JCT, as applicable, within twenty one (21) days following
the end of a Calendar Quarter. After approval by the Joint Project Team or JCT,
as applicable, the Joint Project Team or JCT will forward the Reconciliation
Statement to the JSC for its information or approval in the case of a dispute.
The Reconciliation Statement shall be provided to the JSC thirty days prior to
the date upon which the JSC shall meet to approve the Reconciliation Statement,
if approval is being sought. Reconciliation Statements shall be made by Elan or
Biogen in the manner set forth in Section A.5.

A.3. "FOREIGN EXCHANGE"

            The "Functional Currency" for accounting for Gross Sales, Net Sales,
Development Costs and Reimbursable Commercial Costs will be U.S. dollars. Except
as the Parties otherwise mutually agree, for billing and reporting, the
statement of operations will be translated into U.S. dollars at the rate of
exchange listed in The Wall Street Journal on the last business day of the
applicable calendar quarter, except for sales which will be translated using the
average monthly rate of exchange listed in The Wall Street Journal. If, due to
restrictions or prohibitions imposed by national or international authority,
payments cannot be made as provided in this Section A.3, the Parties shall
consult with each other with a view towards finding a prompt and acceptable
solution, and the paying Party will deal with such monies as the other Party may
lawfully direct at no additional out-of-pocket expense to the paying Party.

A.4. AUDITS AND INTERIM REVIEWS

            Either Party shall have the right to request that a nationally
recognized, independent accounting firm to be mutually agreed upon by the
Parties and that is not either Party's independent accounting firm perform an
audit or interim review of the other Party's books as they relate to the
collaboration in order to express an opinion regarding such Party's compliance
with generally accepted accounting principles. Such audits or review will be
conducted at the expense of the requesting Party.

            Either Party shall have the right to request that a nationally
recognized, independent accounting firm to be mutually agreed upon by the
Parties and that is not either Party's independent accounting firm perform an
audit of the other Party's books of accounts for the sole purpose of verifying
compliance with the Agreement. Upon thirty (30) days prior written notice from a
Party (the "Auditing Party"), the other Party (the "Audited Party") shall permit
an independent certified public accounting firm of nationally recognized
standing to be mutually agreed upon by the Parties and that is not either
Party's independent accounting firm, to examine the relevant books and records
of the Audited Party and its Affiliates as may be reasonably necessary to verify
the reports and information submitted by the Audited Party and the accuracy of
any reconciliation report. An examination by a Party under this Section shall
occur not more than once in any calendar year and shall be limited to the
pertinent books and records for any calendar year ending not more than ***
before the date of the request. The accounting

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                  WITH THE SECURITIES AND EXCHANGE COMMISSION.
                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       8


firm shall be provided access to such books and records at the Audited Party's
facility(ies) where such books and records are normally kept and such
examination shall be conducted during the Audited Party's normal business hours.
The Audited Party may require the accounting firm to sign a standard
non-disclosure agreement with terms that are not inconsistent with the terms of
this Agreement before providing the accounting firm access to the Audited
Party's facilities or records. Upon completion of the audit, the accounting firm
shall provide both Biogen and Elan a written report disclosing whether the
reports submitted by the Audited Party are correct or incorrect and the specific
details concerning any discrepancies. No other information shall be provided to
the Auditing Party. If the accountant determines that, based on errors in the
reports so submitted, any report prepared in accordance with the Agreement is
incorrect, the Parties shall promptly revise the report and the associated
reconciliation report and any additional amount owed by one Party to the other
shall be paid within thirty (30) days after receipt of the accountant's report,
along with interest at the lesser of (i) the annualized interest rate of two
percent (2%) over the prime rate then in effect at Fleet Bank or (ii) the
highest rate permitted by applicable law from the date that such additional
amount should have first been paid, provided, however, that no such interest
shall be payable if the errors leading to the reconciliation report being
incorrect were in the reports provided by the Party to receive such additional
amount. Additionally, if the accountant determines that the reports submitted by
the Audited Party overstate the Audited Party's share by more than *** , the
Audited Party shall reimburse the Auditing Party for the expenses incurred by
the Auditing Party in conducting the audit.

A.5. PAYMENTS BETWEEN THE PARTIES

            Based upon the Reconciliation Statement, as approved by the Joint
Project Team, the JCT or the JSC, as applicable, there shall be a cash
settlement between the Parties no later than sixty (60) days after the end of
each Calendar Quarter. In the event any payment is made after the date specified
in the preceding sentence, the paying Party shall increase the amount otherwise
due and payable by adding interest thereon, computed at the rate of prime (in
effect at Fleet Bank) plus two percent (2%). If laws, rules or regulations
require withholding of income taxes or other taxes imposed upon payments made by
one Party to the other Party, the payor Party shall make such withholding
payments as required and subtract such withholding payments from the payments
otherwise to be made. The payor Party shall submit appropriate proof of payment
of the withholding taxes to the payee Party within a reasonable period of time
and shall cooperate with the payee Party in the event such Party claims
exemption from such withholding, for example by providing copies of receipts of
payment of such withheld tax or other documents reasonably available to the
payor Party.

A.6. COSTS OF BUILDING INVENTORY NECESSARY FOR LAUNCH

            The JCT shall agree on an inventory build-up plan for build-up of
Commercial Supplies of Licensed Product in advance of launch on a country by
country

              CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
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                      ASTERISKS (*) DENOTE SUCH OMISSIONS.


                                       9


basis. Elan shall purchase a percentage of pre-launch inventory prior to launch,
in accordance with the inventory build-up schedule approved by the JCT, based on
the intent of the Parties that they *** in the risk of the inventory build-up.

B. FTE METHODOLOGY

B.1. ACCOUNTING FOR DEVELOPMENT COSTS AND REIMBURSABLE COMMERCIAL COSTS

            All Development Costs, Pre-marketing Expenses, Marketing Costs,
Sales Costs, Distribution Costs, Ongoing Development Expenses and Other Out of
Pocket Costs will be based on the appropriate costs definition stated in Section
A.1 of this Exhibit B.

            Each Party shall report Development Costs and Ongoing Development
Expenses in a manner consistent with its project cost system (which shall track
FTEs by functional area and by quarter) or using such other system as such Party
applies with respect to its internal programs and which has been reviewed with
the Joint Project Team. In general, these project cost systems shall report
actual and/or allocable time spent on specific projects, apply the FTE Rates,
determined in the manner specified below, capture actual and/or allocable costs
of specific projects and allocate other expenses to projects. For Pre-marketing
Expenses, Marketing Costs, Sales Costs and Distribution Costs and Other Out of
Pocket Costs the Parties will allocate costs based on spending in the relevant
departments or applying such other allocation methodology as such Party uses
with respect to other products, and which shall be approved by the Joint
Commercialization Team.

B.2. FTE RATE

            The FTE Rate for both Parties for the remainder of 2000 will be ***.
Thereafter, the JSC will set FTE Rates for each year in connection with approval
of the applicable Annual Workplan/Budget for such year. FTE Rates will be set in
a manner which fairly reflects the direct costs of each Party for the Direct
Functional Groups specified below:

Direct Functional Groups

      A.    Research & Development shall include the following:

                  -     Research

                  -     Project Management

                  -     Preclinical

                  -     Market Development

                  -     Product Development/QA

                  -     Medical Research/Medical Operations/Clinical

                  -     Regulatory Affairs/Drug Safety

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                                       10


                  -     Manufacturing (not including production of Clinical and
                        Commercial Supplies which will use the Production FTE
                        Rate)

B. Sales & Marketing shall include the following

                  -     Sales

                  -     Marketing

                  -     Customer Service

Total budgeted expenses incorporated in the FTE Rate shall include and be
limited to:

                  -     Salary, Overtime & Benefits

                  -     Other Personnel Costs

                  -     General Lab Supplies

                  -     Office Supplies

                  -     IS Hardware & Software

                  -     Maintenance & Repairs

                  -     Communications

                  -     Travel & Entertainment


                                       11


EXHIBIT C

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EXHIBIT D

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EXHIBIT E           ***

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EXHIBIT F

              [NOTE: IN PLACE OF THE ORIGINAL DRAFT PRESS RELEASE,
 ATTACHED IS THE FINAL PRESS RELEASE ISSUED BY THE PARTIES ON AUGUST 17, 2000.]


                BIOGEN AND ELAN TO COLLABORATE ON DEVELOPMENT AND
                 COMMERCIALIZATION OF ANTEGREN(R) (NATALIZUMAB)

       -First of New Class of Agents Currently in Phase 2 Clinical Trials-


Cambridge, MA and Dublin, Ireland - 8/17/2000 - Biogen, Inc. (NASDAQ/BGEN) and
Elan Corporation, plc (NYSE: ELN) today announced a worldwide, exclusive
collaboration to develop, manufacture, and commercialize Antegren(R)
(natalizumab), a humanized monoclonal antibody currently nearing completion of
Phase 2 clinical testing for multiple sclerosis (MS) and Crohn's disease.
Antegren represents the first of a new class of agents that has potential uses
in a variety of diseases.

Under the terms of the agreement, Biogen and Elan will work together to develop,
manufacture, and commercialize Antegren. They will share costs for ongoing
development activities and economic benefits from Antegren commercialization.
The financial details of the agreement were not released, but they include
upfront and milestone payments that recognize the value each party brings to the
collaboration.

James C. Mullen, Biogen's President and Chief Executive Officer, said, "We see
Antegren as an important opportunity for several reasons. First, it is an
exciting, late-stage product with blockbuster potential in a variety of
diseases. Second, it is an excellent complement to AVONEX(R) (Interferon
beta-1a), the world's leading therapy for MS. Used alone or in combination with
AVONEX, Antegren will allow us to offer more solutions to a broader range of MS
patients than are available at the present time. And third, both Biogen and Elan
are pioneers in VLA-4 biology and the research, development, and marketing
synergies between the companies should help us speed the process of bringing
this drug to patients."

Donal J. Geaney, Elan's Chairman and Chief Executive Officer, said, "We are
delighted to have concluded arrangements with Biogen to collaborate in the
development, manufacture, and eventual commercialization of Antegren. We believe
that the technology and skills available from the two combined companies will be
highly synergistic in the challenges of completing the development and
successful introduction of this truly important product."

Antegren, discovered and developed by Elan as part of its focus on neurological
diseases, is a humanized monoclonal antibody and the first in a new class of
potential therapeutics known as alpha 4 integrin inhibitors that are designed to
block cell adhesion to blood vessel walls and subsequent migration of white
blood cells into tissue. Antegren binds to the cell surface receptors known as
alpha-4-beta-1 (VLA-4) and alpha-4-beta-7. These receptors are found on most
types of white blood cells. Antegren may be useful in the treatment of a range
of inflammatory and non-inflammatory diseases. Both Biogen and Elan are pioneers
in the study of this pathway.

Antegren demonstrated promising results in Phase 2 studies in MS reported during
1999 and encouraging data in separate trials with Crohn's disease and ulcerative
colitis patients.

In addition to historical information, this press release contains
forward-looking statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. Reference is made in
particular to statements regarding the potential and possible efficacy of
Antegren. These statements are based on the Company's current beliefs and
expectations as to such future outcomes. Drug development involves a high degree
of risk. Success in early stage clinical trials does not ensure that later stage
or larger scale clinical trials will be successful. Factors which could cause
actual results to differ materially from the Company's current expectations
include the risk that the product may not show therapeutic effect or an
acceptable safety profile in subsequent trials or may not meet applicable
regulatory standards, or that problems or delays may arise during clinical
trials or in the course of the development,

                                       2

testing or manufacturing of the product as well as the other risks and
uncertainties described from time to time in the Company's periodic reports
filed with the Securities and Exchange Commission.

Biogen, Inc., winner of the 1998 U.S. National Medal of Technology, is a
biopharmaceutical company principally engaged in discovering and developing
drugs for human healthcare through genetic engineering. Headquartered in
Cambridge, MA, the Company's revenues are generated from U.S. and European sales
of AVONEX(R) (Interferon beta-1a) for treatment of relapsing forms of multiple
sclerosis, and from the worldwide sales by licensees of a number of products,
including alpha interferon and hepatitis B vaccines and diagnostic products
(Prescribing Information). Biogen's research and development activities are
focused on novel products for multiple sclerosis, inflammatory, respiratory,
kidney and cardiovascular diseases and in developmental biology and gene
therapy. For copies of press releases and additional information about the
Company, please consult Biogen's Homepage on the World Wide Web at
http://www.biogen.com.

Elan Corporation, plc. is a world leader in drug delivery and in the discovery,
development and marketing of products and services in neurology, oncology and
pain management. Elan's principal research and manufacturing facilities are in
Ireland, the United States, and Israel. Elan shares trade on the New York,
London and Dublin Stock Exchanges.

                                       3


SCHEDULE 1.4

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SCHEDULE 1.9

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SCHEDULE 1.28

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SCHEDULE 1.35

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SCHEDULE 1.37

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SCHEDULE 4.6(c)

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SCHEDULE 4.8

None



SCHEDULE 7.1(B)(i)

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SCHEDULE 7.1(B)(ii)

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SCHEDULE 11.5(a)

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EX-10.49

                                                                   Exhibit 10.49

BIOGEN
- --------------------------------------------------------------------------------
FOURTEEN CAMBRIDGE CENTER, CAMBRIDGE, MA 02142 617-679-2000 FAX 617-679-2838

Roger H. Morley
Chairman
Compensation and Management Resources Committee
Board of Directors

                               February 15, 2002


Mr. James C. Mullen
President & Chief Executive Officer
Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142


Dear Jim:


As Chairman of the Compensation and Management Resources Committee (the
"Committee") of the Board of Directors, I am pleased to confirm certain changes
to your cash compensation and employee benefits that have been approved by the
Committee within the recent past following your appointment as President and
Chief Executive Officer of Biogen on June 16, 2000.

1.   Target Bonus: Effective January 1, 2001, your incentive target bonus was
     established at 100% of your annual base salary.

2.   Change of Control: You are considered a "Designated Employee" for purposes
     of Biogen's 1985 Non-Qualified Stock Option Plan (the "Stock Option Plan").
     If at any time within two years following a Corporate Transaction (as
     defined in the Stock Option Plan), your employment with Biogen is
     terminated by Biogen other than for cause, then each outstanding option
     held by you will automatically accelerate so that the option immediately
     becomes fully exercisable and may be exercised for a period of one year
     following the termination of your employment or, if earlier, until the
     expiration of the option. Please read the Stock Option Plan for more
     details about the rights of a Designated Employee in the event of a
     Corporate Transaction and any applicable limitations.

3.   Severance Benefits: You are entitled to severance benefits in the event
     your employment with Biogen is terminated by Biogen other than for cause.
     The severance benefits will be comprised of (i) a lump sum payment and
     (ii) upon completion of the appropriate forms, continuation of Biogen's
     portion of the expense of your participation in Biogen's group medical and
     dental insurance plans. The lump sum payment will be equivalent to 24
     months of your annual base salary and your target annual performance bonus,
     as adjusted by application of your most recent individual performance
     incentive factor. The lump sum payment (less state and federal income and
     welfare taxes and other mandatory deductions under applicable laws) will be
     paid to you promptly following the termination of your employment with
     Biogen. Your

Mr. James C. Mullen
February 15, 2002
Page -2-

participation in Biogen's group medical and dental insurance plans will continue
until the earlier of the date you become eligible to participate in the medical
and dental insurance plans of a third party employer or 24 months following the
termination of your employment with Biogen; and only to the same extent such
insurance is then provided to regular employees of Biogen.

For purposes of this paragraph no. 3, "cause" means (i) your engagement in
misconduct that is injurious to Biogen monetarily or otherwise, (ii) your
conviction of a felony by a court of competent jurisdiction, (iii) your
commission of any act of fraud or embezzlement relating to the property of
Biogen, or (iv) your material violation of any obligations of confidentiality
and nondisclosure owed to Biogen.

Payment and provision of the severance benefits described above are conditioned
on your execution of a general release in favor of Biogen, in form and substance
reasonably acceptable to Biogen, in respect of any and all claims relating to
your employment and the termination of your employment with Biogen.  If you
retire or terminate your employment with Biogen or Biogen terminates your
employment for cause or you do not provide the requisite general release, then
you shall not be entitled to receive the severance benefits described above.

4.   Vacation: You are entitled to five weeks of vacation each year.

5.   Life Insurance: You will have life insurance coverage equivalent to three
     times your annual base salary, subject to our satisfaction of normal
     medical standards of the issuer of the life insurance policy.

6.   Tax Preparation: You are entitled to the preparation and/or review
     (including review of estimated taxes) of your annual Federal and state
     income tax returns, which currently is administered through
     PricewaterhouseCoopers LLC. The cost of this service is covered by Biogen.

In addition to the above changes, the Committee recently approved executive
ownership guidelines for Biogen Common Stock. As President and Chief Executive
Officer, and pursuant to the guidelines, you are required to acquire and
maintain ownership in Biogen Common Stock equivalent in value to eight times
your annual base salary. Ownership is defined as shares of Biogen Common Stock
held outright, held for your account under Biogen's 401(k) savings plan, and
held in the Biogen employee stock purchase plan. In addition, ownership is also
defined to include shares of Biogen Common Stock underlying unexercised vested
stock options granted to you under the Stock Option Plan. You have a five-year
period from the date of your appointment as President and Chief Executive
Officer to comply with the ownership guidelines.

The enhanced cash compensation and employee benefits described above are
provided in lieu of

                                       2


Mr. James C. Mullen
February 15, 2002
Page -3-

the benefits described in a letter dated March 18, 1993 addressed to you from
Frank A. Burke, Jr. and, therefore, this letter supersedes and replaces the
letter of March 18, 1993.

                                   Sincerely,

                                   /s/Roger H. Morley
                                   Roger H. Morley



                                       3

EX-10.50

                                                                   EXHIBIT 10.50

                              EMPLOYMENT AGREEMENT

                  THIS AGREEMENT by and between Biogen, Inc., a Massachusetts
corporation (the "Company"), and James C. Mullen (the "Executive"), dated and
effective as of March 6, 2003 (the "Effective Date").

                  WHEREAS, the Company wishes to provide for the employment by
the Company of the Executive, and the Executive wishes to serve the Company, in
the capacities and on the terms and conditions set forth in this Agreement;

                  NOW, THEREFORE, it is hereby agreed as follows:

1.       TERM. The term of this Agreement shall commence on the Effective Date
and end on January 1, 2006 unless sooner terminated pursuant to Section 4 of
this Agreement. This Agreement shall automatically be extended on each date
(each an "Extension Date") beginning two years prior to the expiration of the
original term for an additional day unless, not later than the day immediately
preceding such Extension Date, the Company or the Executive shall have given
written notice to the other that it does not wish to so extend the term of this
Agreement. The original term ending on January 1, 2006 and additional periods of
renewal are collectively referred to herein as the "Term."

2.       POSITION AND DUTIES; STOCK OWNERSHIP.

         (a)      During the Term, the Executive shall serve as the President
and Chief Executive Officer of the Company and as the Chairman of the Company's
Board of Directors (the "Board"), in each case with such duties and
responsibilities as are customarily assigned to these positions, and such other
duties and responsibilities not inconsistent therewith as may from time to time
be assigned to him by the Board. During the Term, the Executive shall report
solely to the Board, and all Company functions shall report, directly or
indirectly, to the Executive.

         (b)      During the Term, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive shall devote his
full business attention and time to the business and affairs of the Company and
shall use all reasonable efforts to carry out his responsibilities faithfully
and efficiently. However, the Executive may, subject to the prior approval of
the Board, serve on corporate, industry, civic or charitable boards or
committees, so long as these activities do not interfere with the performance of
the Executive's responsibilities to the Company.

         (c)      During the Term, the Executive shall be based at the Company's
principal executive offices, except for travel reasonably required for the
performance of the Executive's duties hereunder.

         (d)      The Executive shall continue to be subject to the executive
stock ownership guidelines for Company common stock adopted by the by the
Compensation and Management Resources Committee of the Board (the "Compensation
Committee").



3.       COMPENSATION.

         (a)      BASE SALARY. The Company shall pay the Executive an annual
base salary (the "Annual Base Salary") at the rate of $900,000. The Annual Base
Salary shall be paid in accordance with the Company's regular payroll practice
for its senior executives, as in effect from time to time. Annual Base Salary
shall be reviewed at least annually by the Board after consultation with the
Executive and may from time to time be increased (but not decreased) as
determined by the Board. Effective as of the date of any such increase the
Annual Base Salary as so increased shall be considered the new Annual Base
Salary for all purposes of this Agreement and may not thereafter be reduced. Any
increase in Annual Base Salary shall not limit or reduce any other obligation of
the Company to the Executive under this Agreement. No additional remuneration
shall be paid to Executive with respect to his service on the Board during the
Term.

         (b)      ANNUAL CASH BONUS. For fiscal years during the Term, the
Executive shall participate in annual cash incentive compensation plans, as
adopted and approved by the Board or the Compensation Committee from time to
time, with applicable corporate and individual performance targets and maximum
award amounts determined by the Compensation Committee. The Executive's annual
target bonus opportunity pursuant to such plans shall be 100% of the Annual Base
Salary in effect for the Executive at the beginning of the fiscal year. Any cash
bonuses payable to the Executive will be paid at the time the Company normally
pays such bonuses to its senior executives and will be subject to the terms and
conditions of the applicable annual cash incentive compensation plan.

         (c)      LONG-TERM INCENTIVE COMPENSATION. During the Term, the
Executive shall be eligible to receive long-term incentive compensation awards
(which may consist of stock options, restricted stock, long-term cash awards or
other forms of long-term incentive compensation) pursuant to the Company's
equity and long-term incentive compensation plans and programs in effect from
time to time. These awards shall be granted in the discretion of the Board or
Committee and shall include such terms and conditions (including performance
objectives) as the Board or Committee deems appropriate.

         (d)      OTHER BENEFITS. During the Term, the Executive shall be
eligible to participate in the retirement, welfare benefit, and fringe benefit
plans, practices, policies and programs of the Company (including any medical,
prescription, dental, disability, life insurance, accidental death and travel
accident insurance plans and programs) to the same extent, and subject to the
same terms and conditions, as these arrangements are made available to the
senior officers of the Company. Without limiting the generality of the
foregoing, the Executive shall (i) continue to be entitled to the supplemental
life insurance coverage that the Company is currently providing to him (which
provides him with coverage above the $1 million limit of the Company's group
life insurance plan, up to a maximum of $4 million) and (ii) be provided with
individual long term disability coverage, which will provide him a benefit equal
to 70% of his Annual Base Salary if he is permanently disabled under the terms
of the coverage (which coverage may contain an

                                       2



offset for amounts payable to the Executive pursuant to the first sentence of
Section 5(b) hereof). The Company shall also reimburse the Executive an amount
in respect of any taxes imposed on him in connection with income imputed as a
result of the long term disability coverage described in the preceding sentence
such that, after payment of the taxes on such imputed income, there remains a
balance sufficient to pay the taxes on the amount being reimbursed. For purposes
of this payment, the Executive shall be deemed to pay federal and state income
tax at the highest marginal rate. The Executive shall also be eligible to
participate in the Company's Voluntary Executive Supplemental Savings Plan and
the Company's Supplemental Executive Retirement Plan. The Company shall provide
the Executive with an annual stipend of up to $50,000 for purposes of financial
counseling and tax preparation, payable only in connection with the financial
counseling and tax preparation services chosen by the Company.

         (e)      VACATION; EXPENSES. The Executive shall be entitled to five
weeks paid vacation per calendar year during the Term. The Company shall pay or
reimburse the Executive for ordinary and necessary business expenses incurred by
him in the performance of his duties in accordance with the Company's usual
policies.

4.       TERMINATION OF EMPLOYMENT.

         (a)      DEATH OR DISABILITY. The Executive's employment shall
terminate automatically upon the Executive's death during the Term. The Company
shall be entitled to terminate the Executive's employment because of the
Executive's Disability during the Term. "Disability" means that the Executive is
permanently disabled within the meaning of the long-term disability coverage
described in Section 3(d) or, if there is no such coverage in effect, that (i)
the Executive has been substantially unable, for 120 business days within a
period of 180 consecutive business days, to perform the Executive's duties under
this Agreement, as a result of physical or mental illness or injury and (ii) a
physician mutually selected by the Executive and the Company (with approval of
such physician not unreasonably withheld or delayed), has determined that the
Executive is permanently disabled. A termination of the Executive's employment
by the Company for Disability shall be communicated to the Executive by written
notice, and will be effective on the 30th day after receipt of such notice by
the Executive (the "Disability Effective Time").

         (b)      TERMINATION BY THE COMPANY.

                  (i)      The Company may terminate the Executive's employment
         during the Term for Cause or without Cause.

                  (ii)     "Cause" means any of the following: (A) the
         Executive's conviction by a court of competent jurisdiction for felony
         criminal conduct, (B) the Executive's gross negligence or willful
         misconduct (unless the Executive believed in good faith that the act or
         omission was in or not opposed to the interest of the Company (without
         intent of the Executive to gain therefrom, directly or indirectly, a
         profit to which he was not legally entitled)), in either case

                                       3



         in the performance of his duties hereunder that results in a detriment
         that is material to the Company and its subsidiaries taken as a whole,
         or (C) the Executive's willful or intentional material breach of
         Section 6 of this Agreement or of the Employee's Proprietary
         Information and Inventions Agreement executed by the Executive on May
         5, 1989 that results in detriment that is material to the Company and
         its subsidiaries taken as a whole. Notwithstanding the forgoing, Cause
         shall not include any act or omission of which the Audit Committee of
         the Board (or the full Board) has had actual knowledge for at least six
         months without asserting that the act or omission constitutes Cause.

                  (iii)    A termination of the Executive's employment for Cause
         shall be not be effective unless it is accomplished in accordance with
         the following procedures. The Board shall give the Executive written
         notice ("Notice of Termination for Cause") of its intention to
         terminate the Executive's employment for Cause, setting forth in
         reasonable detail the specific conduct of the Executive that it
         considers to constitute Cause and the specific provision(s) of this
         Agreement on which it relies, and stating the date, time and place of
         the Special Board Meeting for Cause. The "Special Board Meeting for
         Cause" means a meeting of the Board called and held specifically and
         exclusively for the purpose of considering the Executive's termination
         for Cause. The Special Board Meeting for Cause must take place not less
         than thirty business days after the Executive receives the Notice of
         Termination for Cause. The Executive shall be given an opportunity,
         together with counsel, to be heard at the Special Board Meeting for
         Cause. The Executive's termination for Cause shall be effective when a
         resolution is duly adopted at the Special Board Meeting for Cause
         stating that, in the good faith opinion of at least two-thirds of the
         members of the Board (other than the Executive), the Executive is
         guilty of the conduct described in the Notice of Termination for Cause
         and that such conduct constitutes Cause under the applicable provision
         of this Agreement. A failure by the Company to follow the provisions of
         this Section 4(b)(iii) shall result in the termination of the
         Executive's employment being conclusively deemed to be a termination by
         the Company without Cause.

                  (iv)     Any termination of the Executive's employment without
         Cause by the Company shall be effected by giving the Executive at least
         thirty days written notice of the termination.

         (c)      TERMINATION BY THE EXECUTIVE.

                  (i)      The Executive may terminate employment for Good
         Reason or without Good Reason.

                  (ii)     "Good Reason" shall mean the occurrence of any of the
         following events, without the Executive's consent, at any time during
         the Term: (A) the Executive is not elected to the Board of Directors,
         named as Chairman and designated Chief Executive Officer of the
         Company; (B) causing or requiring the

                                       4



         Executive to report to anyone other than the Board; (C) denial of the
         Executive of the ability to appoint and remove the executive employees
         of the Company (other than executive employees responsible for
         compliance or internal or disclosure controls); (D) a relocation of the
         Company's principal executive offices outside of the metropolitan
         Boston area; or (E) a reduction of the Annual Base Salary under Section
         3(a) or material failure to pay benefits provided or referred to under
         this Agreement, unless any such action under this subclause (E) is
         remedied by the Company within ten days after receipt of notice thereof
         given by the Executive.

                  (iii)    "Good Reason" shall also mean the occurrence of any
         of the following events, without the Executive's consent, at any time
         on or after a Change in Control: (A) the assignment to the Executive of
         any duties inconsistent in any material respect with his position,
         authority, duties or responsibilities as contemplated by this
         Agreement, or any other action by the Company which results in a
         significant diminution in such position, authority, duties or
         responsibilities, unless the action is remedied by the Company within
         ten days after receipt of notice thereof given by the Executive; or (B)
         the failure of the Company to assign this Agreement to a successor to
         the Company or failure of a successor to the Company to explicitly
         assume and agree to be bound by this Agreement.

                  (iv)     A termination of employment by the Executive for Good
         Reason shall be effected by giving the Company written notice ("Notice
         of Termination for Good Reason") of the termination, setting forth in
         reasonable detail the specific conduct of the Company that constitutes
         Good Reason and the specific provision(s) of this Agreement on which
         the Executive relies. A termination of employment by the Executive for
         Good Reason shall be effective ten days following the date when the
         Notice of Termination for Good Reason is given, unless the event
         constituting Good Reason is remedied by the Company prior to that date.
         Actions by the Company which constitute Good Reason shall be
         disregarded in the calculation of termination benefits described in
         Section 5. An event shall not be deemed to constitute Good Reason if
         the Executive fails to deliver Notice of Termination for Good Reason
         within six months of his actual knowledge of the event.

                  (v)      A termination of the Executive's employment by the
         Executive without Good Reason shall be effected by giving the Company
         30 days written notice of the termination.

         (d)      DATE OF TERMINATION; RESIGNATION. The "Date of Termination"
means the date of the Executive's death, the Disability Effective Time or the
date on which the termination of the Executive's employment by the Company for
Cause or without Cause or by the Executive for Good Reason or without Good
Reason is effective. Following termination of the Executive's employment for any
reason, the Executive shall immediately resign from the Board and from all other
offices and positions he holds with the Company and its subsidiaries. For the
avoidance of doubt, a

                                       5



delivery of notice of non-renewal of the Term by the Company shall not be deemed
to be a termination with or without Cause by the Company, nor shall it be an
event of Good Reason.

5.       OBLIGATIONS OF THE COMPANY UPON TERMINATION.

         (a)      OTHER THAN FOR CAUSE, DEATH OR DISABILITY, OR FOR GOOD REASON.
If, during the Term, the Company terminates the Executive's employment for any
reason other than for Cause or due to his Disability, or the Executive
terminates his employment for Good Reason, then the Company shall pay to the
Executive, not later than thirty days following the Date of Termination, (i) a
cash lump sum equal to two times the sum of the Executive's Annual Base Salary
immediately prior to the Date of Termination and the Executive's annual target
bonus for the fiscal year in which the Date of Termination occurs; and (ii) any
unpaid amounts of the Executive's Annual Base Salary and annual bonus for
periods prior to the Date of Termination. The Company shall also provide to the
Executive (and, as applicable, his eligible dependents), in the event of such a
termination continued participation in the Company's medical and dental
insurance plans (or substantially equivalent coverage under an alternative
arrangement) as well as continued supplemental life insurance coverage for the
lesser of twenty-four months following the Date of Termination or until the
Executive is provided by another employer with benefits (determined on a benefit
by benefit basis) substantially comparable (with no applicable preexisting
condition or eligibility limitations) to the benefits provided by the
corresponding Company plan. The statutory health care continuation coverage
period for the Executive under Section 4980B of the Code will commence at the
end of such twenty-four month period. For each year that the Company provides
for benefit continuation coverage under this Section 5(a), the Executive shall
be entitled to receive a supplemental payment in an amount such that after
payment of all employment related taxes on the continued coverage, there remains
a balance sufficient to pay the employment related taxes being reimbursed. For
purposes of this Section 5(a), "employment related taxes" means the incremental
federal and state income and payroll taxes payable by the Executive or the
Executive's spouse with respect to any applicable item of income.

         (b)      DEATH AND DISABILITY. If the Executive's employment is
terminated by reason of Disability during the Term, the Company shall pay to the
Executive, not later than thirty days following the Date of Termination, a cash
lump sum equal to the sum of the Executive's Annual Base Salary immediately
prior to the Date of Termination and the Executive's annual target bonus for the
fiscal year in which the Date of Termination occurs. The Company shall also pay
to the Executive, in the event of a termination due to the Executive's death or
Disability, any unpaid amounts of the Executive's Annual Base Salary and annual
bonus for periods prior to the Date of Termination. In addition, if the
Executive's employment is terminated due to death or Disability, all of the
Executive's then outstanding options to purchase shares of Company common stock,
whether or not previously vested and exercisable, shall be immediately vested
and exercisable upon the Date of Termination and shall remain exercisable until

                                       6



the earlier of (i) the expiration of the maximum term of the option and (ii) the
one year anniversary of the Date of Termination.

         (c)      BY THE COMPANY FOR CAUSE; BY THE EXECUTIVE OTHER THAN FOR GOOD
REASON. If the Executive's employment is terminated by the Company for Cause or
the Executive voluntarily terminates employment other than for Good Reason then,
(i) the Company shall pay to the Executive in a lump sum in cash within thirty
days after the Date of Termination, any portion of the Executive's Annual Base
Salary and bonus earned through the Date of Termination that has not been paid
and (ii) all outstanding equity awards shall be treated according to the
provisions of the plan and agreements under which such awards were granted.

         (d)      MITIGATION; FULL SETTLEMENT. Following termination of the
Executive's employment with the Company, the Executive shall be under no
obligation to seek reemployment and there shall be no offset against amounts due
the Executive under this Agreement on account of any remuneration attributable
to any subsequent employment that he may obtain except as specifically provided
in this Agreement. Any amounts due under this Section 5 are in the nature of
severance payments considered to be reasonable by the Company and are not in the
nature of a penalty. The Company's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any circumstances, including set-off, counterclaim, recoupment,
defense or other claim, right or action that the Company may have against
Executive or others.

         (e)      RELATIONSHIP TO OTHER BENEFITS. The Executive's benefits under
this Agreement shall be in addition to any other amount earned, accrued or owing
but not yet paid under any plan, program, arrangement or understanding covering
the Executive.

         (f)      EXCISE TAX.

                  (i)      If any payments or benefits (whether pursuant to the
         terms of this Agreement or any other plan, arrangement or agreement of
         the Executive with the Company or any person affiliated with the
         Company) (the "Payments") received or to be received by the Executive
         will be subject to the tax (the "Excise Tax") imposed by Section 4999
         of the Internal Revenue Code of 1986, as amended (the "Code") (or any
         similar tax that may hereafter be imposed), then except as set forth in
         Section 5(d)(ii), the Company shall pay to the Executive an additional
         amount (the "Gross-Up Payment"). The Gross Up Payment shall be an
         amount which, when combined with the net amount of the Payments
         retained by the Executive (giving effect to the application of the
         Excise Tax and all other applicable taxes on the Payments) will result
         in the net amount received by the Executive equaling the net amount of
         the Payments the Executive would have received absent application of
         the Excise Tax.

                                       7



                  (ii)     Notwithstanding the provisions of Section 5(f)(i), if
         the Payments that will be subject to the Excise Tax exceed by $100,000
         or less the amount of such Payments that the Executive could receive
         without having any Payments become subject to the Excise Tax, then the
         amount of such Payments shall be reduced to the extent necessary so
         that no portion of the Payments is subject to the Excise Tax.

                  (iii)    The process for calculating the Excise Tax,
         determining the amount of any Gross-Up Payment and other procedures
         relating to this Section 5(f) are set forth in Appendix A.

6.       COMPETITION.

         (a)      Except as set forth below, during the Executive's employment
with the Company and for a period of one year after the termination of the
Executive's employment with the Company (whether at the end of the Term or
thereafter), the Executive shall not, without the prior written consent of the
Board, directly or indirectly engage in the development, production, marketing,
or sale of products that compete (or, upon commercialization, could compete)
with products of the Company being developed, marketed or sold as of the date of
such termination (such business or activity, a "Competing Business") whether
such engagement shall be as an officer, director, owner, employee, partner,
consultant, advisor or any other capacity. Notwithstanding the foregoing, with
respect to any termination of the Executive's employment on or following the
occurrence of a Change in Control, the one year period described above shall be
reduced to six months. Nothing herein will prohibit the Executive from acquiring
or holding not more than one percent of any class of publicly traded securities
of any business.

         (b)      The Executive agrees that the restrictions set forth in
Section 6(a) hereof are reasonable and necessary to protect the legal interests
of the Company. The Executive further agrees that the Company shall be entitled
to injunctive relief in the event of any actual or threatened breach of the
restrictions and shall not be required to post bond or prove actual damages. If
the scope or content of any restriction contained in this Agreement is too broad
to permit enforcement of such restriction to its full extent, then the
restriction shall be enforced to the maximum extent permitted by law, and the
parties hereby consent that the scope or restriction shall be judicially
modified accordingly in any proceeding brought with respect to the enforcement
of the restriction.

7.       INDEMNIFICATION.

         (a)      The Company agrees that if the Executive is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "Proceeding"), by reason of the fact that he is or was a director
or an officer of the Company or is or was serving at the request of the Company
as a director or officer of another corporation, including, without limitation,
any corporation or other entity of which a majority of any class of

                                       8



equity security is owned, directly or indirectly, by the Company or any
Affiliate of the Corporation (as such term is defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended), or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, whether the basis of
such proceeding is alleged action in an official capacity as a director or
officer, or in any other capacity while serving as a director or officer, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent authorized by the Massachusetts Business Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Company to provide broader
indemnification rights than such law permitted the Company to provide prior to
such amendment), against all expense, liability and loss (including, without
limitation, attorneys' fees, judgments, fines, ERISA excise taxes or penalties,
costs of investigation and preparation of defense and amounts paid or to be paid
in settlement) reasonably incurred or suffered by the Executive in connection
therewith; provided, however that, the Company shall indemnify the Executive in
connection with a proceeding (or part thereof) initiated by the Executive only
if such proceeding (or part thereof) was authorized by the Board. The right to
indemnification conferred in this Section 7(a) shall include the right to be
paid by the Company the expenses incurred in defending any such proceeding in
advance of its final disposition (hereinafter an "advancement of expenses") to
the extent permitted under applicable law; provided, however, that an
advancement of expenses incurred by the Executive in his or her capacity as a
director or officer shall be made only upon delivery to the Company of an
undertaking (hereinafter an "undertaking"), by or on behalf of the Executive, to
repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter a
"final adjudication") that the Executive is not entitled to be indemnified for
such expenses under this Section 7 or otherwise.

         (b)      A determination by the Company that the Executive has not met
any applicable standard of conduct to qualify for the indemnification provided
in Section 7(a), shall not be entitled to any presumptive validity in an
arbitration or other proceeding brought by the Executive to enforce his right to
such indemnification.

         (c)      The Company agrees to continue and maintain a directors' and
officers' liability insurance policy covering the Executive to the extent the
Company provides such coverage for its other executive officers.

8.       DISPUTE RESOLUTION; ATTORNEYS' FEES. Other than with respect to the
Company's right to obtain injunctive relief under Section 6 (which shall not be
subject to the provisions of this Section 8), all disputes arising under or in
connection with this Agreement shall be resolved by binding arbitration, to be
held in Boston, Massachusetts in accordance with the rules and procedures of the
American Arbitration Association. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. Each party
shall bear his or its own costs in connection with any such arbitration,
provided that an arbitrator or arbitrators hearing any such dispute may, in
their good faith judgment, require the Company to pay all reasonable legal fees
and

                                       9



expenses incurred by the Executive in connection with any such arbitration or
legal proceeding. Notwithstanding the foregoing, the Company shall pay all
reasonable legal fees and expenses incurred by the Executive in connection with
any such arbitration or legal proceeding which occurs on or following a Change
in Control.

9.       SUCCESSORS.

         (a)      This Agreement is personal to the Executive and without the
prior written consent of the Company the Executive's rights under the Agreement
shall not be assignable (except by will or the laws of descent and
distribution). This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.

         (b)      This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.

         (c)      The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement (but not for purposes of
Exhibit B hereto), the term "Company" shall mean both the Company as defined
above and any such successor.

10.      MISCELLANEOUS.

         (a)      This Agreement shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.

         (b)      All notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery to the other party, by
overnight courier or by certified mail, return receipt requested, postage
prepaid, addressed as follows:

                                 If to the Executive:

                                 James C. Mullen
                                 138 Richardson Drive
                                 Needham, MA 02492

                                       10



                                 If to the Company:

                                 Biogen, Inc.
                                 14 Cambridge Center
                                 Cambridge, MA 02142
                                 Attention: General Counsel

or to such other address as either party furnishes to the other in writing in
accordance with this Section 10(b).

         (c)      Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.

         (d)      The Executive's or the Company's failure to insist upon strict
compliance with any provisions of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.

         (e)      Except as set forth in this Section 10(e), this Agreement
constitutes the entire understanding of the parties with respect to its subject
matter and supercedes any other agreement or other understanding, whether oral
or written, express or implied, between them concerning, related to or otherwise
in connection with, the subject matter hereof (including without limitation the
letter from the Company to the Executive, dated as of February 15, 2002).
Notwithstanding the foregoing, in accordance with the terms of the letter from
the Company to the Executive dated February 15, 2002, the Executive shall
continue to be considered a "Designated Employee" for purposes of the Company's
1985 Non-Qualified Stock Option Plan. In addition, the Employee's Proprietary
Information and Inventions Agreement executed by the Executive on May 5, 1989
shall not be superceded by this Agreement.

         (f)      The rights and benefits of the Executive under this Agreement
may not be anticipated, assigned, alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable process except as
required by law. Any attempt by the Executive to anticipate, alienate, assign,
sell, transfer, pledge, encumber or charge the same shall be void. Payments
hereunder shall not be considered assets of the Executive in the event of
insolvency or bankruptcy.

         (g)      This Agreement shall terminate upon the expiration of the Term
or, if earlier, upon the termination of the Executive's employment under any of
the circumstances described in Section 4, except that terms of this Agreement
which must survive the termination this Agreement in order to be effectuated
(including the provisions of Sections 5, 6, 7 and 8) shall survive.

                                       11



         (h)      This Agreement may be executed in several counterparts, each
of which shall be deemed an original and which together shall constitute but one
and the same instrument.

                  IN WITNESS WHEREOF, the Executive and the Company have
executed this Agreement under seal, as of the day and year first above written.

                                           BIOGEN, INC.

                                           By: /s/ Mary L. Good
                                               ---------------------------------
                                           Mary L. Good
                                           Chairman, Compensation and Management
                                           Resources Committee

                                           /s/ James C. Mullen
                                           -------------------------------------
                                           James C. Mullen

                                       12



EXHIBIT A  -   TAX GROSS-UP PAYMENT RULES AND PROCEDURES

1.       Subject to Paragraph 3 below, all determinations required to be made
under Section 5(f) of this Agreement, including whether a Gross-Up Payment is
required and the amount of such Gross-Up Payment, shall be made by the Auditor
selected in accordance with Paragraph 2 below. The Auditor shall provide
detailed supporting calculations both to the Company and the Executive within 15
business days of the termination of the Executive's employment or such earlier
time as is requested by the Company. The initial Gross-Up Payment, if any, as
determined pursuant to this Paragraph 1, shall be paid to the Executive within
five (5) days of the receipt of the Auditor's determination. If the Auditor
determines that no Excise Tax is payable to the Executive, it shall furnish the
Executive with a written report indicating that he has substantial authority not
to report any Excise Tax on his federal income tax return. Any determination by
the Auditor shall be binding upon the Company and the Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Auditor hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Paragraph 3 below and the Executive thereafter is required to make a payment or
additional payment of any Excise Tax, the Auditor shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes on earned income at the highest marginal rate of taxation in
the state and locality of the Executive's residence on the Date of Termination,
net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes.

2.       The Auditor shall be public accounting firm mutually agreed upon by the
Company and the Executive. If the Executive and the Company cannot agree on the
firm to serve as the Auditor, then the Executive and the Company shall each
select one accounting firm and those two firms shall jointly select the
accounting firm to serve as the Auditor. The Company shall pay the Auditor's
fee.

3.       The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than fifteen (15) business days after the Executive
knows of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. The Executive shall
not pay such claim prior to the expiration of the period ending on the date that
any payment of taxes with respect to such claim is due or the thirty day period
following the date on which the Executive gives such notice to the Company,
whichever period is shorter. If the Company notifies the Executive in writing

                                       13



prior to the expiration of such period that it desires to contest such claim,
the Executive shall (i) give the Company any information reasonably requested by
the Company relating to such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company, (iii)
cooperate with the Company in good faith in order effectively to contest such
claim, and (iv) permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including attorneys fees and any additional interest and
penalties) incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Paragraph 3, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect to such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax and income tax, including interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other authority.

4.       If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Paragraph 3 above, the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Paragraph 3), promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto).

                                       14



                                    EXHIBIT B

For purposes of this Agreement, a "Change in Control" shall be deemed to occur
upon the first of the following events:

         (i)   any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its subsidiaries) representing 30% or more of the combined voting
power of the Company's then outstanding securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction which is not a
Change in Control described in clause (A) of paragraph (iii) below;

         (ii)  the election to the Board, without the recommendation or approval
of a majority of the incumbent Board (as of the Effective Date), of directors
constituting a majority of the number of directors of the Company then in
office, provided, however, that directors whose election or appointment
following the Effective Date is approved by a majority of the members of the
incumbent Board shall be deemed to be members of the incumbent Board for
purposes hereof, provided further that directors whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of directors of the Company will not be considered as members of
the incumbent Board for purposes of this paragraph (ii);

         (iii) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other company, other
than (A) a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving or parent entity) at least 50% of the combined voting power of the
voting securities of the Company or such surviving or parent entity outstanding
immediately after such merger or consolidation (unless following such merger or
consolidation the voting securities of the Company outstanding immediately prior
thereto represent less than 60% of the combined voting power of the voting
securities of the Company or such surviving or parent entity outstanding
immediately after such merger or consolidation and the transaction results in
those persons who are members of the incumbent Board immediately prior to such
merger or consolidation constituting less than 50% of the membership of the
Board or the board of such surviving or parent entity immediately after, or
subsequently at any time as contemplated by such merger or consolidation (in
which case the transaction shall be a Change in Control)) or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities Beneficially Owned by such Person any securities acquired directly
from the Company or its subsidiaries) representing 30% or more of the combined
voting power of the Company's then outstanding securities; or



         (iv)  the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

For purposes of the Change in Control definition set forth in this Exhibit A,
the following definitions shall apply:

"Affiliate" shall have the meaning set forth in Rule 12b-2 under Section 12 of
the Exchange Act; "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 under the Exchange Act, except that a Person shall not be deemed to be the
Beneficial Owner of any securities with respect to which such Person has
properly filed an effective Schedule 13G; "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended from time to time; and "Person"
shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such term shall not
include (i) the Company or any of its Affiliates, (ii) a trustee or other
fiduciary holding securities under an employee benefits plan of the Company or
any of its subsidiaries, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities or (iv) a corporation or other
business entity owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company.

EX-10.51

                                                                  EXHIBIT 10.51

[BIOGEN LOGO]                                   Vice President, Human Resources
_______________________________________________________________________________




                                          June 22, 2001




Mr. Hans-Peter Hasler
653 Augusta Court
Berwyn, Pennsylvania 19312

Dear Hans-Peter:

I am pleased to confirm Jim Mullen's offer to you on behalf of Biogen.  You are
offered the position of Executive Vice President, Commercial Operations of
Biogen at an annual salary of $350,000.  You will report directly to Jim Mullen
and you will become a member of the Operating Team.  Pursuant to Biogen's
compensation policy, you will be eligible for a merit salary review at year-end
2001 and annually thereafter.  You will also be eligible to participate in
Biogen's annual incentive compensation plan with a 50% target bonus.  For the
year 2001, your bonus will be guaranteed at $100,000 and will be payable at a
time and manner consistent with other peer executives.  Your principal place of
employment will be at Biogen's headquarters in the Cambridge, Massachusetts
area.

Upon employment, you will receive $500,000 as a one-time special cash payment,
split into two components:

         -  $250,000 as an interest-free forgivable loan (the "Forgivable Loan")
            which forgives over a thirty-six month, straight-line schedule;
         -  $250,000 as an interest-free mortgage loan (the "Mortgage Loan")
            repayable to Biogen the sooner of eighteen months following the
            point of time the after-tax profit of your vested stock options
            exceeds $1,000,000 or five (5) years from your date of employment.

In the event that you voluntarily terminate your employment, or Biogen
terminates your employment for poor performance or cause, prior to the
thirty-six months from the date of the Forgivable Loan, the unforgiven portion
of the Forgivable Loan would be payable to Biogen within six months of your
termination date.

If you voluntarily terminate your employment, or if your employment is
terminated by Biogen for poor performance or cause, prior to the repayment of
the Mortgage Loan, you will be required to repay Biogen the entire amount of the
Mortgage Loan the sooner of six months following the termination of your
employment or the closing on the sale of the property by which the loan is then
secured.

The Stock and Option Plan Administration Committee of the Board of Directors has
approved the grant of an option to you to purchase 150,000 shares of the common
stock of Biogen Inc., effective on the date you commence employment.  The
exercise price per share will be the average of the high and low sale prices as
reported in the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") on the date you commence employment. The option will have a
ten-year term and vest over a four-year period at the rate of 25% per year
starting on the anniversary of the date you commence employment.  In the future,
based on your performance, you will be eligible for merit stock option grants
beginning at year-end 2002 pursuant to Biogen's merit stock option policy and
in-line with awards granted to the executive officers below the President & CEO.

[BIOGEN LOGO]
- -------------------------------------------------------------------------------
     Mr. Hans-Peter Hasler
     June 22, 2001
     Page 2

     The Board of Directors' recently approved an amendment to our stock option
     plan which provides the acceleration of stock option vesting based on the
     change in control of the corporation and a corresponding adverse impact to
     the individual officer which otherwise causes the individual to lose the
     unvested stock option grants made by Biogen.

     As an officer of the Company, you will be required to participate in our
     program for executive stock ownership, which we are currently revising and
     expect to have approved by the end of September. We believe it is very
     important that our key leaders have personal stock ownership.

     You will be able to choose from a menu of benefit options through our
     flexible benefits program, BioChoice. These include health care, dependent
     life, and disability insurance as well as two flexible spending accounts,
     Med-Flex and D-Flex, for eligible medical or dependent care expenses. At
     the beginning of the calendar quarter following your date of employment you
     will be eligible to participate in Biogen's pension plan. Biogen also
     offers a variety of additional benefits including 401(k) savings plans,
     childcare and elder care referral service, educational matching gifts,
     credit union, and group homeowners and automobile insurance. You will
     receive more detailed information regarding your benefits on your first day
     of employment.

     Biogen will provide relocation benefits to facilitate your move from
     Berwyn, PA. A relocation counselor will contact you to discuss the
     relocation program, and will send you a package detailing the relocation
     policy to you. Please read the policy carefully as it will outline the
     parameters of these benefits and detail the reimbursement process. These
     benefits will include the reimbursement of many of the costs associated
     with both the sale of your current house and the purchase of a new house in
     the Boston area; home finding; and movement of your household goods.

     Additionally, in your new role you will be provided the following:

     -    VACATION: You are entitled, during your employment with Biogen, to
          four (4) weeks vacation, accrued on a monthly pro-rated basis.

     -    SUPPLEMENTAL SAVINGS PLAN: You are entitled, during your employment
          with Biogen, to participate in the Voluntary Executive Supplemental
          Savings Plan. This plan allows you to defer from your current taxation
          up to 50% of your base salary and 100% of your bonus, if there is one.
          I can outline the details of the program if you are interested in
          participating.

     -    LIFE INSURANCE: You will be provided, during your employment with
          Biogen, Biogen's Executive Term Life Insurance coverage for a total of
          $1,000,000. This coverage is based on your successfully meeting the
          medical standards as stated in the Executive Term insurance policy.

     -    TAX REVIEW/PREPARATION: You are entitled, during your employment with
          Biogen, to the preparation and/or review, including review of the
          estimated taxes of your annual Federal and State tax returns, which is
          currently administered through Price WaterhouseCoopers. The cost of
          this service is covered by Biogen. In the event that you choose to
          continue the services provided by your current tax advisor, Biogen
          will reimburse you the cost of these services up to but not exceeding
          the amount incurred by Biogen through Price WaterhouseCoopers.




[BIOGEN LOGO]
- --------------------------------------------------------------------------------
Mr. Hans-Peter Hasler
June 22, 2001
Page 3


- - INVOLUNTARY TERMINATION: If your employment with Biogen is terminated by
  Biogen without cause, Biogen will protect you by paying you a supplementary
  amount (the "Supplementary Amount") equal to your then present base salary for
  a period (the "Extra Period") ending on the earlier of (i) the date twelve
  months from your termination and (ii) the date you start another job. During
  such period, Biogen will also pay to continue your health benefits (i.e.,
  health and dental plan coverage), provided such benefits are accorded
  employees generally and Biogen can obtain the relevant coverage. If you need
  continued coverage to prevent a gap in health coverage between your Biogen
  coverage and that at your new job, Biogen will extend such coverage for up to
  30 days (to the extent that the Extra Period is less than twelve months) after
  you start your new job. The Supplementary Amount will be paid on the same
  schedule as your salary would have been paid. You will not be an employee of
  Biogen during the time of such payments and will not accrue any benefits or
  other rights (such as, but not limited to, pension plan vesting or accrual,
  stock option vesting, vacation pay, etc.) during such period except health
  benefits as described above. You agree to notify us when you accept a new
  position.

Commencement of employment with Biogen is contingent on the satisfactory
completion of a pre-employment drug-screening test at least five business days
prior to your start date. We require all new employees to sign an Intellectual
Property/Confidentiality Agreement on the first day of employment. You may also
be required to complete a medical history review with our occupational health
department, which is scheduled after your first day of employment.

It is Biogen's policy to comply with federal, state and local guidelines
applicable to its facilities and to take all reasonable steps to ensure the
health and safety of Biogen employees. Consistent with this policy, your normal
duties may require you from time to time to attend meetings or perform
functions in any or all of Biogen's facilities.

The Federal Government requires you to provide proper identification verifying
your eligibility to work in the United States. Please bring the appropriate
identification with you on your first day of employment.

On behalf of Jim Mullen, we very much look forward to your positive response
and to your joining us as early as practical. We are confident that you will
make a significant contribution to Biogen's future success.

Please confirm your acceptance by signing this offer letter and noting your
preferred start date. I also invite you to complete the enclosed invitation to
self identify. Please complete the employment application and the drug screen
authorization forms and then return all signed documents to me in the enclosed
self addressed, stamped envelope. The other original offer letter is for your
records.

                              Sincerely,




                              Frank A. Burke, Jr.


[BIOGEN LOGO]
________________________________________________________________________________

  Mr. Hans-Peter Hasler
  June 22, 2001
  Page 4




  I am pleased to accept the offer of employment described above.

  ACCEPTED:

/s/ Hans-Peter Hasler
______________________
  Hans-Peter Hasler

EX-10.52

                                                                   Exhibit 10.52

                                               Vice President, Human Resources





                                October 19, 2001


Hans-Peter Hasler
25 Lovers Lane
Southborough, MA 01772

Dear Hans-Peter:

As an Executive Vice President of Biogen, we know you will continue to be a key
contributor to Biogen's mission, vision, and values. On August 1, 2001, you
joined Biogen at the Executive Vice President level. Since then, we have been in
the process of conducting a comprehensive review of the compensation and
benefits associated with various executive levels at our company.

As a result of our review, I am pleased to note you are eligible for the
following compensation/and or benefits as outlined below.

TARGET BONUS: Your incentive target is 50% of your base salary.

LONG TERM INCENTIVES: Biogen has adopted a new approach to communicating and
granting stock options to employees. You will be eligible for an annual merit
stock option grant, based on a design which emphasizes the future expected
value of the grant. The details of how we will communicate and value options
will be outlined in December.

CHANGE OF CONTROL: You have been designated as a "Designated Employee" for
purposes of Biogen's 1985 Non-Qualified Stock Option Plan. If at any time
within two years following a Corporate Transaction (as defined in the stock
option plan) your employment with Biogen is terminated by Biogen other than for
cause, then each outstanding option held by you will automatically accelerate
so that the option immediately becomes fully exercisable and may be exercised
for a period of one year following the termination of your employment or, if
earlier, until the expiration of the option. Please read the stock option plan
for more details about the rights of a Designated Employee in the event of a
Corporate Transaction and any applicable limitations.

VACATION: You are entitled to an additional week of vacation each year. This
week is over and above the company's normal vacation schedule (which is based
upon years of service).

SUPPLEMENTAL SAVINGS PLAN: You will be entitled to participate in the Voluntary
Executive Supplemental Savings Plan. This plan allows participants to defer
[pretax] base salary and future bonuses. Enrollment in this plan takes place in
December each year. You will be provided additional information on the plan at
that time.

LIFE INSURANCE: You will have life insurance coverage that is the greater of
$1,000,000 or three times your annual salary and subject to the normal medical
standards of the life insurance policy.

                                                Vice President, Human Resources





SEVERANCE:  You will have a Minimum severance benefit that is the greater of the
severance outlined in your letter dated June 22, 2001 or the severance outlined
in the Executive Severance document, which has been included with this letter.

EXECUTIVE STOCK OWNERSHIP:  You will be expected to acquire and maintain a
personal financial interest in Biogen.  Ownership is defined as stock held
outright, stock held in the 401(k) plan and stock held under the Employee Stock
Purchase Plan.  Vested but unexercised shares would also be counted toward
ownership guidelines.  You will be required to maintain a financial interest of
six times base salary.  You will have a five-year period from the date of your
appointment to Vice President to obtain this ownership level.

TAX PREPARATION:  You are eligible to have your federal and state income taxes
prepared by PricewaterhouseCoopers.

On behalf of Jim Mullen, please accept my sincere congratulations and best
wishes for future success with Biogen.



                                              Sincerely,



                                              /s/ Frank A. Burke, Jr.
                                              Frank A. Burke, Jr.

EX-13

exv13

EX-21

                                             EXHIBIT 21

                                   SUBSIDIARIES OF THE REGISTRANT

Biogen Canada, Inc.                             Delaware
Bio Holding I, Inc.                             Delaware
Bio Holding II, Inc.                            Delaware
Biogen Realty Cooperation                       Massachusetts
Biogen Realty Limited Partnership               Massachusetts
Biogen U.S. Corporation                         Massachusetts
Biogen U.S. Limited Partnership                 Massachusetts
Biogen (RTP) Realty LLC                         Delaware
Biogen (Denmark) Manufacturing ApS              Denmark
Biogen Australia Pty Ltd                        Australia
Biogen Belgium S.A./N.V.                        Belgium
Biogen B.V.                                     The Netherlands
Biogen France S.A.                              France
Biogen Farmaceutica SL                          Spain
Biogen GmbH                                     Austria
Biogen GmbH                                     Germany
Biogen International B.V.                       The Netherlands
Biogen Investments, Ltd.                        Bermuda
Biogen Japan Ltd.                               Japan
Biogen Limited                                  United Kingdom
Biotech Manufacturing CV                        The Netherlands
Biotech Manufacturing Limited                   Channel Islands
Biogen Norway AS                                Norway
Biogen Sweden AB                                Sweden
Biogen Denmark A/S                              Denmark
Biogen Finland Oy                               Finland

EX-23

                                   EXHIBIT 23

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 (Nos. 33-51639 and 333-71695) and in the Registration
Statements on Form S-8 (Nos. 33-63013, 33-71647, 33-37312, 33-69174, 33-63015,
333-42887, 333-70701, 333-53598 and 333-81668) of Biogen, Inc. of our report
dated February 14, 2003 relating to the financial statements, which appears in
the Annual Report to Shareholders, which is incorporated in this Annual Report
on Form 10-K. We also consent to the incorporation by reference of our report
dated February 14, 2003 relating to the financial statement schedule, which
appears in this Form 10-K.

\s\  PricewaterhouseCoopers LLP

Boston, Massachusetts
March 14, 2003