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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.





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|                                                   |                                                                                                          |  |  |  |  |  |  | 
|-------------------------------------------------- | -------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                                   | 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       



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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.

13



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##### Table of Contents



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,

14



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##### Table of Contents



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



---



##### Table of Contents






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



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##### Table of Contents






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



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##### Table of Contents



|        |  |                                                                                                                                                                                       
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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



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##### Table of Contents



|        |  |                                                                                                                                               
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|(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



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##### Table of Contents






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. MullenJames C. Mullen     |  | Chairman of the Board of
Directors, President and Chief
Executive Officer (principal
executive officer)     |  | March 14, 2003
|                                      
|/s/ Peter N. KelloggPeter N. Kellogg   |  | Executive Vice President 
Finance and Chief Financial
Officer (principal financial and
accounting officer) |  | March 14, 2003
|                                      
|/s/ Alan BelzerAlan Belzer             |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ Harold W. BuirkleHarold W. Buirkle |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ Mary L. GoodMary L. Good           |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ Thomas F. KellerThomas F. Keller   |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ Roger H. MorleyRoger H. Morley     |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ Kenneth MurrayKenneth Murray       |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ Eckhard PfeifferEckhard Pfeiffer   |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ Phillip A. SharpPhillip A. Sharp   |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ Alan K. SimpsonAlan K. Simpson     |  | Director                                                                                                    |  | March 14, 2003
|                                      
|/s/ James W. StevensJames W. Stevens   |  | Director                                                                                                    |  | March 14, 2003

20



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##### Table of Contents



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



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##### Table of Contents



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



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##### Table of Contents






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