SECURITIES AND EXCHANGE COMMISSION Total Pages - 19
                   WASHINGTON, D.C. 20549 Exhibit Index - 19
                  -------------------------------------------

                                   FORM 10-Q
(Mark one)

[X]  Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities 
Exchange Act of 1934.

For the quarterly period ended         September 30, 1998  
                               ------------------------------------------

                                       OR

[   ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities 
Exchange Act of 1934.

For the transition period from ___________________ to ______________________    


                         Commission File Number 0-12042


                                  BIOGEN, INC.


             (Exact name of registrant as specified in its charter)

          Massachusetts                                04-3002117
---------------------------------------  ------------------------------------- 
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization) 

14 Cambridge Center, Cambridge, MA                         02142
---------------------------------------  ------------------------------------- 
(Address of principal executive offices)                 (Zip Code)


Registrant's telephone number, including area code:             (617)679-2000

Former name, former address and former fiscal year, if changed since last 
report:  Not Applicable.

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 ___________
              

Number of shares outstanding of each of the issuer's classes of common stock, as
of October 23, 1998:

Common Stock, par value $0.01                               73,599,511
---------------------------------     ---------------------------------------
     (Title of each class)                              Number of Shares


                                                                        Page 2

                                  BIOGEN, INC.

                                     INDEX


PART I - FINANCIAL INFORMATION                                        Page No.

   Condensed Consolidated Statements of Income -
      Three months and nine months ended
      September 30, 1998 and 1997 . . . . . . . . . . . . . .             3

   Condensed Consolidated Balance Sheets -
      September 30, 1998 and December 31, 1997 . . . . . . . .            4

   Condensed Consolidated Statements of Cash Flows -
      Nine months ended September 30, 1998 and 1997 . . . . .             5

   Notes to Condensed Consolidated Financial Statements . . .             6

   Management's Discussion and Analysis of Financial
      Condition and Results of Operations   . . . . . . . . .            10


PART II - OTHER INFORMATION                                              17


                  *********************************************



Note concerning trademarks:  AVONEX(R) is a registered trademark of
                             Biogen, Inc.



                                                                        Page 3

<TABLE>
                          BIOGEN, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
                    (in thousands, except per share amounts)

<CAPTION>
                           Three Months Ended              Nine Months Ended
                             September 30,                   September 30,
                          -------------------------     -----------------------
                            1998         1997             1998          1997
                          ----------  -----------      -----------   ----------
<S>                       <C>         <C>              <C>           <C>
REVENUES

   Product sales . . . .  $107,492    $ 60,413         $270,665       $169,469
   Royalties . . . . . .    38,412      40,200          118,523        118,422
   Interest. . . . . . .     7,033       5,588           20,964         15,701
                           -------     -------          -------        -------
     Total revenues. . .   152,937     106,201          410,152        303,592
                           =======     =======          =======        =======
EXPENSES

   Cost of sales . . . .    19,513      12,498           51,557         35,686
   Research and 
     development . . . .    49,083      37,040          128,338        106,962
   Selling, general and                                                                             
     administrative. . .    27,011      22,649           81,495         64,773
   Other, net. . . . . .     1,348         (71)           2,118             73
                           -------     -------          -------        -------
Total expenses . . . . .    96,955      72,116          263,508        207,494
                           -------     -------          -------        -------
INCOME BEFORE INCOME 
   TAXES                    55,982      34,085          146,644         96,098

Income taxes . . . . . .    18,417      13,600           49,859         38,655
                           -------     -------          -------        -------
NET INCOME . . . . . . .  $ 37,565    $ 20,485         $ 96,785       $ 57,443
                           =======     =======          =======        =======
BASIC EARNINGS PER 
   SHARE                  $   0.51    $   0.28         $   1.31       $   0.78
                           =======     =======          =======        =======
DILUTED EARNINGS PER 
   SHARE . . . . . . . .  $   0.49    $   0.27         $   1.26       $   0.75
                           =======     =======          =======        =======
SHARES USED IN 
   CALCULATING: 
   BASIC EARNINGS PER 
   SHARE . . . . . . . .    73,782      74,003           73,830         73,720
                           =======     =======          =======        =======
   DILUTED EARNINGS PER 
   SHARE . . . . . . . .    77,258      76,571           76,959         76,554
                           =======     =======          =======        =======
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


                                                                        Page 4
<TABLE>
                          BIOGEN, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<CAPTION>

                                        September 30, 1998    December 31, 1997
                                      ---------------------  ------------------
                                            (unaudited)
<S>                                         <C>                   <C>
ASSETS
 Current assets
   Cash and cash equivalents . . . .        $ 94,158              $ 70,358
   Marketable securities . . . . . .         410,602               369,730
   Accounts receivable, net. . . . .          90,175                86,802
   Deferred tax asset. . . . . . . .          32,484                37,203
   Other current assets  . . . . . .          43,990                31,973
                                             -------               -------
   Total current assets. . . . . . .         671,409               596,066
                                             -------               -------
 Property, plant and equipment
   Cost. . . . . . . . . . . . . . .         259,938               240,513
   Less accumulated depreciation . .          81,260                66,021
                                             -------               -------
   Property, plant and equipment, net        178,678               174,492
                                             -------               -------
 Other assets                                                          
   Patents, net. . . . . . . . . . .          16,068                14,935
   Marketable securities . . . . . .          14,869                17,095
   Other . . . . . . . . . . . . . .           7,527                11,237
                                             -------               -------
   Total other assets. . . . . . . .          38,464                43,267
                                             -------               -------
                                            $888,551              $813,825
                                             =======               =======
LIABILITIES AND SHAREHOLDERS' EQUITY
   Current liabilities
     Accounts payable. . . . . . . . .      $ 17,515               $15,820
     Note payable. . . . . . . . . . .        18,752                24,817
     Current portion of long-term debt         4,888                 4,888
     Accrued expenses and other. . . .        90,416                78,358
                                             -------               -------
     Total current liabilities . . . .       131,571               123,883
                                             -------               -------
   Long-term debt, less current
     portion . . . . . . . . . . . . .        58,596                61,846
   Other long term liabilities. . . .         16,248                15,132
   Put options. . . . . . . . . . . .         13,334                76,671
   Commitments and contigencies . . .             --                    --

   Shareholders' equity
     Common stock. . . . . . . . . . .           741                   741
     Additional paid in capital. . . .       506,812               516,880
     Retained earnings . . . . . . . .       185,441                25,327
     Unrealized loss on
        marketable securities . . . . .       (6,975)               (2,233)
     Cumulative translation adjustment           264                (   37)
     Treasury stock, at cost . . . . .       (17,481)               (4,385)
                                             -------               -------
   Total shareholders' equity . . . .        668,802               536,293
                                             -------               -------
                                            $888,551              $813,825
                                             =======               =======
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


                                                                        Page 5
<TABLE>
                          BIOGEN, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)
<CAPTION>

                                                        Nine Months Ended
                                                          September 30,
                                                     ------------------------
                                                         1998       1997
                                                     ----------  ------------
<S>                                                   <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income. . . . . . . . . . . . . . . .          $ 96,785    $ 57,443
   Adjustments to reconcile net income
     to net cash provided from
     operating activities:
     Depreciation and amortization. . . . . .           17,980      13,615
     Deferred income taxes. . . . . . . . . .           11,484      31,084
     Other. . . . . . . . . . . . . . . . . .              552     (19,563)
     Changes in:
       Accounts receivable . . . . . . . . . .          (3,373)    (16,350)
       Other current and other assets. . . . .         (12,469)     (8,595)
       Accounts payable, accrued expenses
         and other current and long term
         liabilities. . . . . . . . . . . . . .         14,869       9,982
                                                       -------    --------
   Net cash provided from operating
     activities . . . . . . . . . . . . . . .          125,828      67,616
                                                       -------    --------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of marketable securities. . . .          (398,668)   (349,255)
   Proceeds from sales and maturities of                                               
     marketable securities. . . . . . . . . .          357,925     274,793
   Investment in collaborative partners. . .            (5,000)    (11,000)
   Acquisitions of property and equipment. .           (19,473)    (20,878)
   Additions to patents. . . . . . . . . . .            (3,854)     (6,670)
                                                       -------    --------
     Net cash used by investing activities. .          (69,070)   (113,010)
                                                       -------    --------
CASH FLOWS FROM FINANCING ACTIVITIES
   Repayments of note payable. . . . . . . .            (6,065)         --
   Proceeds from issuance of long-term debt.                --       4,545
   Payments of long-term debt. . . . . . . .            (3,250)     (2,444)
   Purchases of treasury stock . . . . . . .           (50,850)         --
   Tax benefit related to stock options. . .            10,642      21,747
   Issuance of common stock and option                                                 
     exercises. . . . . . . . . . . . . . . .           16,565      22,088
                                                       -------    --------
     Net cash (used by) provided from financing
     activities . . . . . . . . . . . . . . .          (32,958)     45,936
                                                       -------    --------
NET INCREASE IN CASH AND
     CASH EQUIVALENTS . . . . . . . . . . . .           23,800         542

CASH AND CASH EQUIVALENTS,                                                                                      
     BEGINNING OF PERIOD. . . . . . . . . . .           70,358      62,032
                                                       -------    --------
CASH AND CASH EQUIVALENTS,
     END OF PERIOD. . . . . . . . . . . . . .         $ 94,158   $  62,574
                                                       =======    ========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


                                                                        Page 6

                          BIOGEN, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


1.       In the opinion of  management,  the  accompanying  unaudited  condensed
         consolidated  financial statements include all adjustments,  consisting
         of only normal  recurring  accruals,  necessary  to present  fairly the
         financial  position,  results of  operations  and cash flows of Biogen,
         Inc. and its  subsidiaries  (the "Company").  The Company's  accounting
         policies  are  described  in  the  Notes  to   Consolidated   Financial
         Statements  in the Company's  1997 Annual Report on Form 10-K.  Interim
         results are not necessarily indicative of the operating results for the
         full year.

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities and disclosure of contingent  assets and liabilities at the
         date of the financial statements,  and the reported amounts of revenues
         and expenses during the reporting  period.  Actual results could differ
         from  those  estimates.  Certain  amounts  for the  nine  months  ended
         September  30,  1997 have been  reclassified  to conform to the current
         period presentation.

         In June 1997, the Financial Accounting Standards Board issued Statement
         of Financial Accounting  Standards Number 130 "Reporting  Comprehensive
         Income"  ("SFAS 130") and Statement of Financial  Accounting  Standards
         Number 131  "Disclosures  about  Segments of an Enterprise  and Related
         Information" ("SFAS 131"). The Company adopted SFAS 130 and SFAS 131 on
         January  1,  1998.  SFAS  130   establishes   standards  for  reporting
         comprehensive  income and its components in the consolidated  financial
         statements.  Comprehensive  income for the three months and nine months
         ended   September  30,  1998  was  $37.8  million  and  $92.3  million,
         respectively.  SFAS 131 establishes standards for reporting information
         on operating segments in interim and annual financial statements.

         On June 15,  1998,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial Accounting Standards Number 133, "Accounting for
         Derivative  Instruments and Hedging  Activities" ("SFAS 133"). SFAS 133
         is  effective  for all fiscal  quarters of all fiscal  years  beginning
         after June 15, 1999.  The Company plans to adopt SFAS 133 in the fourth
         quarter of 1998.  SFAS 133 requires that all derivative  instruments be
         recorded on the balance sheet at their fair value.  Changes in the fair
         value of  derivatives  are recorded each period in current  earnings or
         other  comprehensive  income,  depending  on  whether a  derivative  is
         designated  as part of a hedge  transaction  and, if it is, the type of
         hedge transaction.  The Company expects that the impact of the adoption
         of SFAS 133 will not have a material  impact on its financial  position
         or results of operations.


                                                                        Page 7

Below is summary of the shares used in  calculating  basic and diluted  earnings
per share (in thousands):
<TABLE>
<CAPTION>
                                Three Months Ended          Nine Months Ended
                                  September 30,              September 30,
                              -----------------------     ---------------------
                                 1998        1997            1998       1997
                             ----------   -----------     ----------  ---------
<S>                             <C>          <C>            <C>        <C>    
Weighted average number
   of shares of common
   stock outstanding  . . .     73,782       74,003         73,830     73,720
Dilutive stock options           3,476        2,568          3,129      2,834
                               -------       ------         ------     ------
Shares used in
   calculating diluted
   earnings per share . . .     77,258       76,571         76,959     76,554
                               =======       ======         ======     ======
</TABLE>


2.       As of September  30, 1998,  the Company had $20.0  million  outstanding
         under a term loan  secured  by a  laboratory  and  office  building  in
         Cambridge,  Massachusetts.  Principal  payments  of  $833,000  are  due
         semi-annually through 2004 with the balance due on May 8, 2005.

         As of September  30, 1998,  the Company had $43.5  million  outstanding
         under a loan  agreement with a bank for financing the  construction  of
         the Company's biological  manufacturing facility in North Carolina (the
         "Construction Loan"). The Construction Loan is secured by the facility.
         Payments of $805,000  are due  quarterly  through 2006 with the balance
         due on March 31, 2007.

         Terms of the  loan  agreements  include  various  covenants,  including
         financial covenants,  which require the Company to maintain minimum net
         worth, cash flow and various financial ratios.


3.       Inventories,  which are included in other current assets, are stated at
         the  lower  of  cost  or  market   with  cost   determined   under  the
         first-in/first-out  ("FIFO") method.  Raw materials  include  inventory
         used in the production of pre-clinical and clinical products, which are
         expensed as research and development costs when consumed.  Inventories,
         net of applicable reserves and allowances, are as follows:
<TABLE>
<CAPTION>
                                               (In Thousands)
                                September 30, 1998          December 31, 1997
                            -------------------------      -------------------
<S>                                  <C>                          <C>

Raw materials                        $ 4,010                      $ 4,957
Work in process                       18,138                        8,132
Finished goods                        11,400                        9,870
                                      ------                       ------
                                     $33,548                      $22,959
                                      ======                       ======
</TABLE>


                                                                        Page 8

4.       On July 3, 1996, Berlex Laboratories,  Inc. ("Berlex") filed suit
         against  Biogen  in the  United  States  District  Court  for the
         District  of  New  Jersey  alleging  infringement  by  Biogen  of
         Berlex's   "McCormick"   patent  in  the  United  States  in  the
         production  of  Biogen's  AVONEX(R)   (Interferon   beta-la).  In
         November 1996,  Berlex's New Jersey action was transferred to the U.S. 
         District  Court  in  Massachusetts  and  consolidated  for pre-trial 
         purposes with a related  declaratory  judgement action previously filed
         by Biogen.  On August 18, 1998,  Berlex filed a second suit against 
         Biogen alleging  infringement by Biogen of a patent  which was  issued 
         to Berlex in August  1998 and which is related to the McCormick patent.
         On September 23, 1998, the cases were consolidated for pre-trial and 
         trial purposes.  Berlex seeks a  judgement  granting  it  damages,  a 
         trebling  of any  damages awarded and a permanent  injunction 
         restraining  Biogen from the alleged  infringement.  An unfavorable  
         ruling in the Berlex suit could have a material adverse effect on the 
         Company's  results of operations and financial  position.  The Company 
         believes that it has meritorious defenses to Berlex claims;  however, 
         the ultimate outcome is not determinable at this time. A trial is not
         expected before late 1999.

         On October 14, 1998, the Company filed an opposition with the
         Opposition  Division of the European Patent Office to oppose a European
         patent   (the   "Rentschler   patent")   issued   to   Dr.   Rentschler
         Biotechnologie   GmbH  ("Rentschler")  with  certain  claims  regarding
         compositions  of matter of beta  interferon with specific regard to the
         structure of the glycosolated molecule.  While Biogen believes that the
         patent  will  be  revoked,  if the  patent  were  to be  upheld  and if
         Rentschler were to obtain,  through legal proceedings,  a determination
         that the  Company's  sale of  AVONEX(R)  in  Europe  infringes  a valid
         Rentschler patent,  such result could have a material adverse effect on
         the Company's results of operation and financial position.

         In  June  1996,  ASTA  Medica  Aktiengesellschaft  ("ASTA")  filed  for
         arbitration  against Biogen with the International  Chamber of Commerce
         ("ICC") in connection  with a dispute with Biogen  regarding a License,
         Development  and  Supply  Agreement,  dated  May 30,  1989  (the  "1989
         Agreement"),  among Biogen, ASTA and Bioferon  Biochemische  Substanzen
         GmbH & Co ("Bioferon"). Bioferon was a joint venture between Biogen and
         Rentschler Arzneimittel GmbH & Co. of Laupheim,  Germany, which entered
         bankruptcy  in  1993.  In  the   proceeding,   ASTA  had  asked  for  a
         determination  that Biogen could not terminate the 1989 Agreement as to
         ASTA  solely  as a  result  of  Bioferon's  bankruptcy  and  a  further
         determination  that Biogen was required to supply ASTA with recombinant
         beta  interferon.  On March 13, 1998, the ICC  arbitration  panel ruled
         that, as between Biogen and ASTA, the 1989 Agreement was not terminated
         as a result of the  bankruptcy  of  Bioferon,  but that  Biogen was not
         required to perform  Bioferon's  obligations  under the 1989  Agreement
         and,  as a  result,  had  no  obligation  to  supply  recombinant  beta
         interferon  to ASTA.  Under the 1989  Agreement,  ASTA was  granted  an
         exclusive  license  for a  number  of  European  countries  to  certain
         intellectual   property   relating  to  recombinant   beta  interferon,
         including  Biogen's  European Fiers patent which has since been revoked
         by the European Patent Office. In light of the panel's decision, Biogen
         notified ASTA that it was terminating the 1989 Agreement based on 
         ASTA's  conduct  and  failure to perform.  
                                                            

                                                                        Page 9

         On March 19,  1998,  ASTA notified  Biogen  that  it  deemed  Biogen's 
         termination  of the  1989 Agreement  to be  invalid.  On or  about  May
         14,  1998,  ASTA  filed a complaint  against  Biogen in the United 
         States  District Court for the District  of  Massachuetts   seeking 
         enforcement  of  the  arbitration decision,   injunctive   relief,   
         damages, relief  pursuant  to  the Massachusetts  Consumer Protection 
         Act (Mass. Gen L. ch. 93A) and other relief arising out of additional 
         tort and contract claims. ASTA alleges that Biogen's termination of the
         1989 Agreement based on ASTA's conduct is invalid and that ASTA is 
         Biogen's  exclusive licensee of recombinant beta  interferon in the  
         territories  specified in the 1989  Agreement. Biogen intends to 
         vigorously  defend the lawsuit.  The Company believes that it has  
         meritorious  defenses  to ASTA's  claim,  and given  these defenses, 
         the Company  does not believe the  ultimate  outcome of this proceeding
         will  have a  material  adverse  effect  on  the  financial position or
         results of operations of the Company.

         On or about July 17, 1998,  Biogen received a letter  demanding  relief
         pursuant to the  Massachusetts  Consumer  Protection Act (Mass. Gen. L.
         ch.  93A) on behalf of an  alleged  class of  persons  who have  filled
         prescriptions at pharmacies owned and/or operated by CVS Pharmacy, Inc.
         The demand  purports to be made in  connection  with  litigation  filed
         against CVS and others in the Massachusetts  Superior Court styled Weld
         v. CVS Pharmacy,  Inc., et al. Civil Action No. 98-0897-F.  On or about
         July 15, 1998, the Weld plaintiffs  filed an amended  complaint  naming
         Biogen (and other major  pharmaceutical  manufacturers)  as  additional
         defendants  in the  lawsuit. The plaintiffs seek unspecified  monetary 
         and  equitable  relief from Biogen on account of Biogen's  alleged  
         participation  in a direct  mailing  program  to CVS customers using a
         third party company, Elensys Care Services, Inc.  Plaintiffs claim 
         that this alleged program violates the CVS customers'  statutory  and 
         common  law  rights to  privacy  as well as Chapter 93A.  Biogen  
         disputes the claims raised by the  plaintiffs and intends to vigorously
         defend the lawsuit.  The Company believes that it has  meritorious  
         defenses to this claim.  The Company does not believe the ultimate  
         outcome of this proceeding will have a material effect on the financial
         position or results of operations of the Company.

5.       Income tax  expense as a percent  of  pre-tax  income for the  quarters
         ended  September  30, 1998 and 1997 was 32.9% and 39.9%,  respectively.
         The effective tax rate varied from U.S.  statutory rates in the current
         quarter  primarily  due to an  increase  in  European  sales and to the
         utilization of research and development credits. The effective tax rate
         varied  from  U.S.  statutory  rates in the  comparable  period of 1997
         primarily due to the benefit of research and development and investment
         tax credits  partially  offset by foreign  losses for which the Company
         received no tax benefit.  The Company's effective tax rate for the nine
         months ended September 30, 1998 was 34.0%,  and is expected to continue
         at or near this level for the remainder of 1998.


                                                                       Page 10

                          BIOGEN, INC. AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Overview

Biogen,  Inc.  (the  "Company"  or  "Biogen")  is  a  biopharmaceutical  company
principally  engaged in the business of developing,  manufacturing and marketing
drugs for human health care. The Company  currently  derives revenues from sales
of  AVONEX(R)  (Interferon  beta-la) for the  treatment  of  relapsing  forms of
multiple sclerosis ("MS") and from royalties on worldwide sales by the Company's
licensees  of a number of  products  covered  under  patents  controlled  by the
Company,  including  alpha  interferon  and hepatitis B vaccines and  diagnostic
products.

Results of Operations

For the quarter  ended  September 30, 1998,  the Company  reported net income of
$37.6  million or $0.49 per diluted  share as compared to $20.5 million or $0.27
per diluted share for the  comparable  period of 1997. For the nine months ended
September  30, 1998,  the Company  recorded net income of $96.8 million or $1.26
per diluted  share as compared to $57.4  million or $0.75 per diluted  share for
the comparable period of 1997.

Total  revenues  for the current  quarter  were $152.9  million,  as compared to
$106.2  million in the quarter  ended  September  30, 1997, an increase of $46.7
million or 44.0%.  The increase in total revenues was due to increased  sales of
the Company's  product  AVONEX(R).  Product  sales for the current  quarter were
$107.5 million  compared to $60.4 million for the comparable  period in 1997, an
increase of $47.1  million or 78.0%.  The growth in 1998 was primarily due to an
increase  in the sales  volume of  AVONEX(R)  in the  United  States  and in the
European Union ("EU"). The increase in the EU included an expansion into several
new countries.  The Company received  regulatory approval to market AVONEX(R) in
the  fifteen  member  countries  of the EU in  March  1997.  By the end of 1997,
AVONEX(R)  had received  reimbursement  approval and was on the market in all of
the EU countries.  In addition,  in April 1998, the Company received approval to
market  AVONEX(R) in Canada.  AVONEX(R)  sales outside of the United States were
approximately  $24.5 million in the current quarter as compared to approximately
$4.0 million in the comparable  period of 1997.  Revenues from royalties for the
current  quarter  were  $38.4  million  as  compared  to $40.2  million  for the
comparable  period of 1997, a decrease of $1.8  million or 4.5%,  primarily as a
result of a decrease in royalties on sales of Hepatitis B vaccines.


                                                                       Page 11

Total revenues for the nine months ended  September 30, 1998 were $410.2 million
as compared to $303.6 million in the  comparable  period of 1997, an increase of
$106.6  million or 35.1%  primarily  due to the  increased  sales of  AVONEX(R).
Revenues from product sales for the nine-month  period ended  September 30, 1998
increased $101.2 million or 59.7% to $270.7 million, or 66.0% of total revenues,
compared to $169.5 million, or 55.8% of total revenues, in the comparable period
of 1997.  Royalties  for the nine  months  ended  September  30,  1998  remained
relatively  flat at  $118.5  million.  In May 1998,  the  Company  and  Schering
Corporation,  a subsidiary of Schering-Plough,  amended the terms of the license
agreement under which  Schering-Plough  pays the Company  royalties on worldwide
sales of  Schering-Plough's  alpha  interferon  product,  Intron(R) A. Under the
terms of the  amendment,  Schering-Plough  acquired the Biogen alpha  interferon
patent  application,  which was the  subject of a lawsuit  filed by the  Company
against  F.Hoffman-LaRoche,  Inc. and Genentech Inc.  related to an interference
involving the Biogen patent application and a patent  application  jointly-owned
by the two defendants.  The lawsuit has since been settled. As consideration for
acquisition  of the Biogen  patent  application,  Schering  Plough agreed to pay
certain sums on U.S. sales of Intron(R) A from July 2002 until expiration of the
alpha interferon  patent expected to be issued to F.  Hoffman-LaRoche,  Inc. and
Genentech Inc. as a result of the settlement.

The Company  expects product sales as a percentage of total revenues to continue
to  increase  in the near term as the  Company  continues  to  market  AVONEX(R)
worldwide, and expects sales from AVONEX(R) in Europe to continue to increase as
a percentage of total product sales. The Company, however, expects to face 
increasing  competition in the MS marketplace  from existing and new MS
treatments  that may impact sales of  AVONEX(R).  In the near term,  the Company
expects  overall  sales of licensee  products  and royalty  revenues to 
fluctuate  depending on changes in sales volumes for specific  products,  patent
expirations, new licensing arrangements, if any, or other developments. Licensee
sales  levels may also  fluctuate  from quarter to quarter due to the timing and
extent of major events such as new indication  approvals or government sponsored
vaccination programs.

Interest income for the current quarter was $7.0 million, an increase of $1.4  
million or 25.0% as compared to $5.6 million in the  comparable  period of 1997.
For the nine months ended  September 30, 1998,  interest  income was $21.0
million compared to $15.7 million in the comparable  period of 1997, an increase
of $5.3 million or 33.8%. The  increase  in  interest  income is  primarily  a 
result of  increased  funds invested.

Total  expenses for the current  quarter were $97.0 million as compared to $72.1
million in the quarter ended September 30, 1997, an increase of $24.9 million or
34.5%.  Cost of sales in the current quarter totaled $19.5 million,  an increase
of $7.0 million from the quarter ended  September 30, 1997. Cost of sales in the
current quarter  includes  product costs relating to sales of AVONEX(R) of $16.3
million  compared to $9.4 million in the quarter ended September 30, 1997. Gross
margins for product sales increased slightly to 84.8% for the three months ended
September 30, 1998 as compared to 84.4% for the comparable  period of 1997. Cost
of sales relating to royalty revenue for the current quarter increased  slightly
to $3.2  million as compared to $3.1 million in the  comparable  period of 1997.
Gross margins on  royalty  revenue  declined  slightly  to 91.7% for the  
current quarter as compared to 92.3% for the comparable  period of 1997.  


                                                                       Page 12

The Company  expects that gross  margins on royalty  revenue  will  fluctuate  
in the future  based on the impact of one-time  royalty and  milestone  
payments.  Research and  development expenses  for the  current  quarter  were 
$49.1  million,  an  increase of $12.1 million or 32.7% as compared to the  
quarter  ended  September  30,  1997.  This increase  was  primarily  due to an 
increase  in  clinical  trial  costs and an increase  in  the  Company's   
development  efforts  relating  to  research  and development  programs in its 
product pipeline.  The Company expects that, in the long-term,  research  and  
development  expenses  will  increase  as the Company continues to expand its 
development  efforts with respect to new products and as it  conducts   clinical
trials  of  these  products.   Selling,   general  and administrative  expenses 
for the current quarter were $27.0 million, an increase of $4.4 million or 19.5%
as compared to the quarter  ended  September  30, 1997. This increase was 
primarily due to higher selling and marketing expenses related to sales of 
AVONEX(R), principally in support of the ongoing European launch and higher 
legal costs. The Company expects that selling, general and administrative 
expenses will increase in the near and long-term as the Company continues to put
in place the  commercial  infrastructure  and sales and marketing  organizations
necessary to sell AVONEX(R) worldwide.

Total  expenses for the nine-month  period ended  September 30, 1998 were $263.5
million as  compared  to $207.5  million in the  comparable  period of 1997,  an
increase  of $56.0  million or 27.0%.  Cost of sales for the nine  months  ended
September  30,  1998 were $51.6  million  as  compared  to $35.7  million in the
comparable  period of 1997, an increase of $15.9 million or 44.5%. Cost of sales
for the nine months ended September 30, 1998 and 1997 included $42.3 million and
$25.9 million, respectively, of product costs related to the sales of AVONEX(R).
Gross margins for product sales decreased  slightly to 84.4% for the nine months
ended September 30, 1998 as compared to 84.7% for the comparable period of 1997.
Cost of sales relating to royalty revenue decreased slightly to $9.3 million for
the nine months  ended  September  30, 1998 as compared to $9.8  million for the
comparable period of 1997. Gross margins on royalty revenue  increased  slightly
to 92.2% for the nine months ended  September  30, 1998 as compared to 91.8% for
the comparable period of 1997.

Research and development  expenses for the current nine-month period were $128.3
million as compared to $107.0 million in the comparable period of 1997. Included
in research and  development  expenses for the  nine-months  ended September 30,
1997 was a one-time license fee of $5 million to CV Therapeutics, Inc. Excluding
the one-time license fee, research and development  expenses for the nine months
ended  September 30, 1998,  increased $26.3 million or 25.8% from the comparable
period of 1997. This increase was primarily due to an increase in clinical trial
costs and an increase in the Company's  development efforts relating to research
and  development  programs  in  its  product  pipeline.   Selling,  general  and
administrative  expenses for the nine-month period ended September 30, 1998 were
$81.5 million as compared to $64.8 million in the comparable  period of 1997, an
increase of $16.7  million or 25.8%.  This  increase  was  primarily  due to the
higher selling and marketing  expenses related to sales of AVONEX(R),  primarily
in Europe, and higher legal fees.

Income  tax  expense  as a percent of  pre-tax  income  for the  quarters  ended
September 30, 1998 and 1997 was 32.9% and 39.9%, respectively. 

                                                                       Page 13

The effective  tax rate varied  from U.S.  statutory  rates in the  current  
quarter primarily  due to an  increase  in  European  sales  and to the  
utilization  of research and  development  credits.  The  effective  tax rate in
the  comparable period of 1997 varied from U.S.  statutory rates primarily due 
to the benefit of research and development and investment tax credits offset by 
foreign losses for which the Company received no tax benefit.  The Company's 
effective tax rate for the nine months ended September 30, 1998 was 34.0%,  and 
is expected to continue at or near this level for the remainder of 1998.

Financial Condition

At  September  30,  1998,  cash,  cash  equivalents  and  short-term  marketable
securities  were $504.8  million  compared  with $440.1  million at December 31,
1997, an increase of $64.7 million.  Working capital  increased $67.6 million to
$539.8  million from December 31, 1997 to September 30, 1998.  Net cash provided
from operating activities for the nine-month period ended September 30, 1998 was
$125.8  million,  compared with $67.6 million in the comparable  period of 1997.
Cash outflows for the nine-months ended September 30, 1998, included investments
in property and equipment and patents of $23.3 million and $5.0 million  related
to research  collaboration  agreements.  Cash outflows from financing activities
included note payable and loan repayments of $9.3 million and repurchases of the
Company's  common  stock at a total cost of $50.9  million.  Cash  inflows  from
financing  activities  included  $27.2  million  from  common  stock  option and
purchase plan activity, including tax benefits related to stock options.

Several legal  proceedings were pending during the current quarter which involve
the Company.  See Note 4 of the Notes to the  Condensed  Consolidated  Financial
Statements and Part II, Item 1 - Legal Proceedings.  See also Item 1 - Business,
"Patents and Other  Proprietary  Rights" of the Company's  Annual Report on Form
10-K for the fiscal year ended December 31, 1997 for  discussions of these legal
proceedings.

The Company  believes that existing funds and cash generated from operations are
adequate to satisfy its working capital and capital expenditure  requirements in
the  foreseeable  future.  However,  the  Company  may seek to raise  additional
capital to take advantage of favorable conditions in the market or in connection
with the Company's development activities.

Year 2000 Issues

Year 2000 is the problem  resulting  from the use of a  two-digit  date field to
identify the year in computer software. Consequently,  computer programs may not
accurately reflect the appropriate date,  confusing "00" as the year 1900 rather
than the year 2000. Year 2000 is a pervasive  problem affecting many information
technology   systems  and  embedded   technologies   (e.g.   microprocessors  in
communications  systems) in all  companies,  in all  industries.  Failure by the
Company or failure by third parties upon which the Company relies to effectively
address Year 2000 issues could have a material  adverse  impact on the Company's
financial position or results of operations.

The Company has developed a plan to address the Year 2000 issues.  The plan is 
segregated into four phases:


                                                                       Page 14

1.  Information  Collection  -  Identify  all Year 2000 risk  areas and assign
accountability.
2. Assess Risk - Assign each item a category of risk:
     Commercial Risk - Has a significant impact on sale, delivery and support of
     AVONEX(R) or significant impact on royalty revenues. 
     Operational Risk - Has a significant  impact on  productivity  but does not
     materially  impact the Company's results of operations. 
     Convenience Risk - Has a minor impact on productivity.
3. Remediate - Fix or replace, test and implement changes required for Year 2000
compliance.  
4. Contingency Plan - Define procedures to be implemented  should a disruption 
due to Year 2000 occur.

The Company has  completed the first two phases of the project and has completed
the testing and upgrading of all individual  software  applications that fall 
within the Commercial Risk category.  All of the Company's major software  
applications are purchased  from major software  vendors and the Company  
performs only minor customizations  to those applications.  The Company's major 
software  providers have attested  to Year 2000  compliance.  The  Company has  
reviewed  its  operations equipment for embedded  technologies which may be Year
2000 susceptible and does not believe necessary modifications to be material.

The Company is  communicating  with its  significant  vendors and  customers  to
determine   the  progress  that  those  vendors  and  customers  are  making  in
remediating  their  own  Year  2000  issues.   The  Company  is  requiring  that
significant vendors and customers certify those products and services to be Year
2000 compliant.

To date, Year 2000 costs have been minimal and the Company  believes that future
costs will be  immaterial.  The Company  expects the  remainder of the Year 2000
compliance program to be substantially complete by July 1999.

The most reasonably likely worst case scenario,  if significant Year 2000 issues
arise, is that the Company would be hampered in its efforts to produce, package,
and deliver AVONEX(R),  the Company's only revenue generating product,  and that
third parties from whom the Company  receives  royalty  revenue would  encounter
similar  difficulties  in their  efforts  to  produce  and sell  products  which
generate royalty revenue for the Company.  To mitigate the risks of such events,
the  Company is  developing  contingency  plans,  which  include  maintaining  a
sufficient  level of inventory  of  AVONEX(R) in both bulk and packaged  format,
developing  secondary  sources of packaging and  delivery,  providing for manual
backup processes, and working with third parties on Year 2000 certification.  To
the extent that Year 2000  certification is  unsatisfactory,  contingency  plans
will be developed or modified accordingly. In the event that significant vendors
do not  achieve  Year 2000  compliance  in a timely  manner,  and the Company is
unable to replace  them,  the  operations  of the  Company  could be  materially
adversely affected.


                                                                       Page 15

Outlook

Safe Harbor Statement under Private Securities Litigation Reform Act of 1995

In  addition  to  historical  information,  this  quarterly  report on Form 10-Q
contains  forward-looking  statements that involve risks and uncertainties  that
could cause actual  results to differ  materially  from those  reflected in such
forward-looking  statements.  Reference is made in particular to forward-looking
statements  regarding the anticipated level of future royalty revenues,  product
sales,  expenses  and  profits,  predictions  as to the  anticipated  outcome of
pending  litigation and  opposition  proceedings  and  statements  regarding the
expected  outcome of planned  measures to deal with Year 2000 issues.  These and
all other  forward-looking  statements  are made based on the Company's  current
belief as to the outcome and timing of such future  events.  Factors which could
cause actual results to differ from the Company's  expectations  and which could
negatively  impact the Company's  results of operations are discussed  below and
elsewhere in this  Management's  Discussion and Analysis of Financial  Condition
and Results of Operations.


Dependence on AVONEX(R) Sales and Royalty Revenue

The Company's ability to sustain increases in revenues and profitability will be
primarily  dependent on the level of revenues and  profitability  from AVONEX(R)
sales.   The  company's   ability  to  sustain   profitability   from  sales  of
AVONEX(R)will  depend  on a  number  of  factors,  including:  continued  market
acceptance  of AVONEX(R)  worldwide;  the  Company's  ability to maintain a high
level of patient  satisfaction  with  AVONEX(R);  the nature of  regulatory  and
pricing  decisions  related  to  AVONEX(R)  worldwide  and the  extent  to which
AVONEX(R) receives and maintains  reimbursement  coverage;  market acceptance of
AVONEX(R) outside the United States;  successful  resolution of the lawsuit with
Berlex related to the  "McCormick"  patents,  which if decided in Berlex's favor
could have a material  adverse  effect on the Company's  financial  position and
results of operations;  success in revoking the  Rentschler  patent since if the
patent  were to be  upheld  and if  Rentschler  were to  obtain,  through  legal
proceedings,  a  determination  that the  Company's  sale of AVONEX(R) in Europe
infringes a valid Rentschler  patent,  such result could have a material adverse
effect on the  Company's  results of  operation  and  financial  condition;  the
Company's  ability  to  sustain  market  share  of  AVONEX(R)  in  light  of the
introduction  of competitive  products for the treatment of multiple  sclerosis;
the  success of  ongoing  development  work  related to  AVONEX(R)  in  expanded
multiple sclerosis indications and the continued  accessibility of third parties
to vial,  label, and distribute  AVONEX(R) on acceptable terms. The Company also
receives  royalty  revenues  which  contribute   significantly  to  its  overall
profitability.  The  Company's  ability  to  maintain  the level of its  royalty
revenues will depend on a number of factors, including: sustaining the scope and
validity of existing patents; the efforts of licensees in the clinical testing


                                                                       Page 16

and  marketing  of products  from which the  Company  derives revenue;  and the 
timing  and  extent of  royalties  from  additional  licensing opportunities.  
In addition, licensee sales levels may fluctuate from quarter to quarter  due to
the  timing and extent of major  events  such as new  indication approvals  or  
government  sponsored  vaccination  programs.  There  can  be  no assurance 
that the Company will achieve a positive  outcome with respect to any of the 
factors  discussed  in this  Section or that the timing and extent of the 
Company's  success  with  respect to any  combination  of these  factors will be
sufficient to result in sustained  increases in revenues or profitability or the
sustained  profitability  of the  Company.  For a  further  discussion  of risks
regarding drug development,  patent matters, including the Berlex lawsuit on the
"McCormick" patent,  competition in the multiple sclerosis market and regulatory
matters,  see the  Company's  Annual  Report on Form 10-K for the  period  ended
December  31, 1997 under the  headings  "Business - Risks  Associated  with Drug
Development",  "Business - Patents and Other  Proprietary  Rights",  "Business -
Competition  and  Marketing  -  AVONEX(R)  (interferon  beta-la)",  "Business  -
Regulation",  "Legal  Proceedings" and "Management's  Discussion and Analysis of
Financial Condition and Results of Operations - Outlook."

New Products

AVONEX(R) is currently  the only  product  sold by the  Company.  The  Company's
long-term  viability and growth will depend on the  successful  development  and
commercialization   of  other   products  from  its  research   activities   and
collaborations.  The Company is  continuing  to expand its  development  efforts
related to other  potential  products  in its  pipeline.  The  expansion  of the
pipeline may include increases in spending on internal projects, the acquisition
of third party  technologies or products or other types of investments.  Product
development  involves a high degree of risk.  Many important  factors affect the
Company's ability to successfully develop and commercialize drugs, including the
ability to obtain and maintain  necessary  patents and licenses,  to demonstrate
safety and  efficacy  of drug  candidates  at each stage of the  clinical  trial
process,  to  meet  applicable  regulatory  standards  and to  receive  required
regulatory  approvals,  to be capable of producing drug candidates in commercial
quantities at reasonable costs, to compete  successfully  against other products
and to market products successfully.  There can be no assurance that the Company
will be successful in its efforts to develop and commercialize new products.


                                                                       Page 17

                           PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

On July 3, 1996, Berlex Laboratories,  Inc. ("Berlex") filed suit against Biogen
in the United  States  District  Court for the  District of New Jersey  alleging
infringement  by Biogen of Berlex's  "McCormick"  patent in the United States in
the production of Biogen's  AVONEX(R)  (Interferon  beta-la).  In November 1996,
Berlex's  New  Jersey  action  was  transferred  to the U.S.  District  Court in
Massachusetts and consolidated for pre-trial purposes with a related declaratory
judgement action  previously filed by Biogen. On August 18, 1998, Berlex filed a
second suit against  Biogen  alleging  infringement  by Biogen of a patent which
issued to Berlex in August 1998 and which is related to the McCormick patent. On
September  23,  1998,  the  cases  were  consolidated  for  pre-trial  and trial
purposes.  Berlex  seeks a  judgement  granting  it  damages,  a trebling of any
damages awarded and a permanent  injunction  restraining Biogen from the alleged
infringement.  An  unfavorable  ruling in the Berlex  suit could have a material
adverse effect on the Company's  results of operations  and financial  position.
The Company believes that it has meritorious defenses to Berlex claims; however,
the ultimate  outcome is not  determinable at this time. A trial is not expected
before late 1999.

On October  14,  1998,  the  Company  filed an  opposition  with the  Opposition
Division  of the  European  Patent  Office  to  oppose a  European  patent  (the
"Rentschler patent") issued to Dr. Rentschler Biotechnologie GmbH ("Rentschler")
with certain claims  regarding  compositions  of matter of beta  interferon with
specific  regard to the  structure of the  glycosolated  molecule.  While Biogen
believes that the patent will be revoked, if the patent were to be upheld and if
Rentschler were to obtain,  through legal proceedings,  a determination that the
Company's sale of AVONEX(R) in Europe infringes a valid Rentschler patent,  such
result  could  have a  material  adverse  effect  on the  Company's  results  of
operation and financial position.

In June 1996,  ASTA Medica  Aktiengesellschaft  ("ASTA")  filed for  arbitration
against Biogen with the International  Chamber of Commerce ("ICC") in connection
with  a  dispute  with  Biogen  regarding  a  License,  Development  and  Supply
Agreement,  dated May 30, 1989 (the "1989  Agreement"),  among Biogen,  ASTA and
Bioferon  Biochemische  Substanzen GmbH & Co ("Bioferon").  Bioferon was a joint
venture  between  Biogen and  Rentschler  Arzneimittel  GmbH & Co. of  Laupheim,
Germany, which entered bankruptcy in 1993. In the proceeding, ASTA had asked for
a  determination  that Biogen could not terminate the 1989  Agreement as to ASTA
solely as a result of Bioferon's  bankruptcy  and a further  determination  that
Biogen was required to supply ASTA with recombinant  beta  interferon.  On March
13, 1998, the ICC arbitration  panel ruled that, as between Biogen and ASTA, the
1989 Agreement was not terminated as a result of the bankruptcy of Bioferon, but
that Biogen was not required to perform  Bioferon's  obligations  under the 1989
Agreement  and,  as a  result,  had no  obligation  to supply  recombinant  beta
interferon  to ASTA.  Under the 1989  Agreement,  ASTA was granted an  exclusive
license  for a number of European  countries  to certain  intellectual  property
relating to  recombinant  beta  interferon,  including  Biogen's  European Fiers
patent which has since been revoked by the European  Patent Office.  In light of
the panel's decision, Biogen notified ASTA that it was terminating the


                                                                       Page 18

1989  Agreement  based on ASTA's  conduct and  failure to perform.  On March 19,
1998,  ASTA  notified  Biogen that it deemed  Biogen's  termination  of the 1989
Agreement  to be  invalid.  On or about May 14,  1998,  ASTA  filed a  complaint
against  Biogen  in the  United  States  District  Court  for  the  District  of
Massachuetts seeking enforcement of the arbitration decision, injunctive relief,
damages, relief pursuant to the Massachusetts Consumer Protection Act (Mass. Gen
L. ch. 93A) and other relief arising out of additional tort and contract claims.
ASTA alleges that Biogen's  termination  of the 1989  Agreement  based on ASTA's
conduct is invalid and that ASTA is Biogen's  exclusive  licensee of recombinant
beta  interferon  in the  territories  specified in the 1989  Agreement.  Biogen
intends to  vigorously  defend the  lawsuit.  The Company  believes  that it has
meritorious defenses to ASTA's claim, and given these defenses, the Company does
not believe the ultimate outcome of this proceeding will have a material adverse
effect on the financial position or results of operations of the Company.

On or about July 17, 1998, Biogen received a letter demanding relief pursuant to
the Massachusetts  Consumer  Protection Act (Mass. Gen. L. ch. 93A) on behalf of
an alleged class of persons who have filled  prescriptions  at pharmacies  owned
and/or  operated  by CVS  Pharmacy,  Inc.  The  demand  purports  to be  made in
connection  with  litigation  filed against CVS and others in the  Massachusetts
Superior  Court  styled Weld v. CVS  Pharmacy,  Inc.,  et al.  Civil  Action No.
98-0897-F.  On or about  July 15,  1998,  the Weld  plaintiffs  filed an amended
complaint  naming  Biogen  (and other  major  pharmaceutical  manufacturers)  as
additional  defendants  in the lawsuit.  The  plaintiffs  seek unspecified  
monetary  and  equitable  relief from Biogen on account of Biogen's alleged  
participation in a direct mailing program to CVS customers using a third party 
company, Elensys Care Services, Inc.  Plaintiffs claim that this alleged program
violates the CVS customers' statutory and common law rights to privacy as well 
as Chapter 93A.  Biogen disputes the claims raised by the  plaintiffs  and
intends to  vigorously  defend the lawsuit.  The Company believes that it has  
meritorious  defenses to this claim.  The Company does not believe the ultimate 
outcome of this  proceeding will have a material effect on the financial 
position or results of operations of the Company.

Item 6 - Exhibits and Reports on Form 8-K

(a)    Exhibits

       No. 27         Financial Data Schedule (for EDGAR filing purposes only).

                                   SIGNATURES

Pursuant  to the  requirements  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.

Dated: November 4, 1998              /s/Timothy M. Kish
                                ---------------------------------------------

                                              Timothy M. Kish
                                        Vice President-Finance and
                                         Chief Financial Officer


                                                                       Page 19

EXHIBITS

Index to Exhibit.


      No. 27       Financial Data Schedule (for EDGAR filing purposes only).