Elizabeth Woo - Vice President of Investor Relations Company Speaker - Alfred Sandrock - George Scangos - Chief Executive Officer and Director Paul Clancy - Chief Financial Officer and Executive Vice President of Finance

Geoffrey Porges - Bernstein Research Jason Kantor - RBC Capital Markets Corporation Robyn Karnauskas - Deutsche Bank AG Joel Sendek - Lazard Capital Markets LLC Thomas Wei - Jefferies & Company, Inc. Joshua Schimmer - Leerink Swann LLC Yaron Werber - Citigroup Inc Christopher Raymond - Robert W. Baird & Co. Incorporated Jason Zhang - BMO Capital Markets U.S. Eric Schmidt - Cowen and Company, LLC Mark Schoenebaum - ISI Group Inc. Rachel McMinn - BofA Merrill Lynch Geoffrey Meacham - JP Morgan Chase & Co

Good morning. My name is Steve, and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen Idec's Third Quarter 2010 Earnings Conference Call. [Operator Instructions] Ms. Kia Khaleghpour, you may begin your conference.

Thank you, Steve. Thank you, and welcome to Biogen Idec's Third Quarter 2010 Earnings Conference Call. Before we begin, I encourage everyone to go to the Investors section of biogenidec.com to find the press release and related financial tables, including a reconciliation of the non-GAAP financial measures I will discuss today. We've also posted slides on our website that followed the discussions related to today's call. As usual, we'll start with the Safe Harbor statement. Comments made in this conference call include forward-looking statements that are subject to risks and uncertainties. Words such as believe, expect, may, plan, will and similar expressions are intended to identify such statements. Actual results could differ materially from our expectations, and you should carefully review the risks and uncertainties that are described in our earnings slide, earnings release and in the Risk Factors section of our most recent annual and quarterly reports filed with the SEC. We do not undertake any obligation to publicly update any forward-looking statements. Today on the call, I'm joined by Dr. George Scangos, Chief Executive Officer of Biogen Idec; Dr. Al Sandrock, Senior Vice President of Neurology Research and Development; Dr. Francesco Granata, Executive Vice President of Global Commercial Operations; and Paul Clancy, Executive Vice President of Finance and Chief Financial Officer. Now, I'll turn the call over to George.

Thanks, Kia, and thanks to all of you for joining us this morning. It's hard to believe that we're sitting here today. Another quarter has passed. It doesn't seem like that long ago that we're on the Q2 call. I guess time flies when you're having fun. I'm happy to report that Biogen Idec delivered another solid quarter. And financial revenues were $1.2 billion, up 5% versus the third quarter of '09, non-GAAP earnings per share were $1.35, which is a 21% increase year-over-year. And we completed the $1.5 billion share buyback that the Board authorized this April, retiring a total of nearly 30 million shares at an average price of $15.35. During the quarter, we also made considerable progress on three top priorities, growing and expanding the commercial business, taking a hard look at R&D to ensure that we maximize the return in our investment and in choosing the sense of urgency in all parts of the organization. Our MS franchise delivered double-digit year-over-year revenue growth and continues to be the global leader in MS. Importantly, AVONEX U.S. unit sales increased sequentially for the second straight quarter at the first such performance since 2004. And we just now completed the expansion of our sales force, finished strengthening the skills and competencies of the entire commercial organization and launched a number of new initiatives to keep these areas competitive as we prepare to face new market entrance. So anticipate that the full effect of the actions we've taken have not yet been fully felt. Our Neurology, Research and Development organization made some noteworthy advances. Al Sandrock will provide more details later on the call, but here are some highlights. We made significant progress on our TYSABRI risk stratification efforts. Earlier this month at ECTRIMS, we presented interim results from our STRATIFY 1 study, which confirmed earlier data that roughly half of the MS patient population tested positive in our sclerosis collassay for JC virus. For STRATIFY 2, we've made tremendous progress on patient enrollment. And as of October 22, we enrolled over 6,800 patients. At ECTRIMS, along with our partner Roche, we announced positive data from the Phase II study of Ocrelizumab and relapsing remitting MS. Al will go through the data in more detail, but overall, it looks quite impressive. And as we now announced last week, we reached an agreement with Genentech and Roche to allow them to move Ocrelizumab forward while allowing Biogen Idec to avoid a further concentration of its R&D dollars in Phase III trials in MS, while we maintain our economic interest in the compound. Importantly, we agree that the introduction of Ocrelizumab on to the market would not impact our profit sharing arrangement on RITUXAN. We also agree that the profit sharing arrangements for GA101 and RITUXAN, which were a potential area of dispute in the future. The company's interest are now in line, allowing us to work together to maximize with the collaboration revenues, as well as the benefits to patients. We also diversified our Neurology pipeline. In August, we announced the licensing agreement with Knopp Neurosciences to develop and commercialize for the treatment of amyotrophic lateral sclerosis, or ALS, and potentially other indications. We expect to initiate this trial during the first half of next year. Our hemophilia pipeline also has some positive developments. Last month, the European Commission granted orphan designation to our long acting recombinant factor VIII FC fusion protein . We plan to initiate the registrational trial for this program called A-long by year end. Patient enrollment for B-long, which is the registrational trial for our long acting recombinant Factor IX FC fusion protein in hemophilia B, continues to enroll as expected. And we're on track for data readout in 2012. Many of you also are interested in the status of our search for Head of R&D. We've identified several accomplished, talented people who are interested in the job and the interview process is underway. I'm confident that we'll end up with a high-quality R&D head. We want to get this done quickly, as quickly as we can, but we also want to make sure to take the time to identify and recruit the best candidate. So it's been a busy three months since our last earnings call. Since my arrival, I've spoken with many of Biogen Idec's employees, visited many of the company sites and talk to most of our major shareholders, business partners and other important constituencies. As a result, I'm more optimistic than ever about the long-term future of Biogen Idec. As I've said before, this is a fundamentally good company from which to build. There are many things we can and we must do better, and we will. And thanks to do so, we're being implemented. On our last call, I talked about our efforts to focusing control costs, and we're making great progress on both fronts. We're not yet ready to talk publicly about our plans and any potential actions, and so we won't be answering any questions on that subject today. I can assure you that we're on track to share our plans prior to the end of the year, consistent with the timeline I laid out on the last call. So at this point, I'll turn the call over to Al Sandrock for details on the progress we've been making in Neurology R&D.

Thank you, George. I'll be addressing our late stage of Neurology pipeline a bit later, so let me begin by first updating you on our TYSABRI risk stratification efforts. Earlier this month at ECTRIMS, we made several presentation highlighting the results of our work on the anti-JCV antibody assay. Today, we have analyzed blood samples from five large MS studies including the STRATA; TYSABRI safety extension study; the predominantly European affirmed Phase III trial of TYSABRI; the North American portion of the TYSABRI Safety Observations Study, called TYGRIS; the independent Swedish MS registry; and the baseline data from the STRATIFY 1 study, which as you know, we implemented this year in the United States in patients either on TYSABRI or considering TYSABRI. We are pleased to see that the data obtained from these studies have been quite consistent and confirmed the findings which were recently published in the anals of neurology. Let me summarize our findings. We have now tested blood samples from over 5000 MS patients. To our knowledge, this is the largest study of JCV zerology[ph] ever undertaken. Across studies, JCV zero prevalence ranges from approximately 50% to 60%. In all studies, zero prevalence is lower in females than in males, which is consistent with previously published reports. Zero prevalence increases with age, also in keeping with the published literature. We have found that prior immunosuppressant use has no bearing on JC virus zero prevalence. Moreover, TYSABRI exposure does not appear to affect the prevalence of anti-JCV antibodies. Importantly, when we tested archive samples that were available from 20 patients who have developed PML while on TYSABRI, all 20 tested positive by our assay. These samples have been collected 6.5 to 187 months prior to the onset of PML. Based on what we have now learned about JCV in antibody status and MS patient populations, if antibody status were not a risk factor for developing PML, one would've expected their roughly half of these 20 patients would have been antibody positive. So we believe that finding all 20 to be positive is extremely unlikely to be due to chance. In addition, we have tested 31 serum samples taken at the time of, or shortly after PML diagnosis. And all 31 have also tested positive by our assay. Thus, we continue to believe that the anti-JCV antibodies test could be an important risk stratification tool for TYSABRI. We note that another laboratory using a different anti-JCV antibody assay have reported that a few TYSABRI PML patients at the time of diagnosis were only borderline positive or negative by their assay. When we used our own assay to test duplicates of the very same blood samples, we found them all to test positive in our assay, thus, confirming the high sensitivity of our assay for anti-JCV antibodies. One hypothesis that may explain the difference is that all these blood samples were collected after plasma exchange, a procedure which was used to remove TYSABRI from the circulation. This procedure also removes other antibodies so the antibody may be at or below the limit of detection of their assay. We have had preliminary discussions with both the U.S. and European regulatory authorities about our work on the anti-JCV assay and have shared these and other data with them. As a result of these discussions, we are planning to submit labeling changes to both regulatory agencies by the first quarter of next year. We believe that the 5000 patient data set, coupled with the results from the 20 pre-PML samples that I just described, are sufficiently compelling that it should be included in the information available to patients and physicians. We will continue to update you as we make progress along this front. Now, I would like to turn to the rest of our late stage neurology pipeline to update you on our progress during the quarter. Post the result for long release Fampridine tablets at ECTRIMS highlighted improvements in walking speed across the broad range of MS patients and the emerging recognition of the importance of mobility problems facing MS patients. Our market research in Europe and Canada indicates that improvement in mobility is the high unmet need in MS. Physicians believe that more than half of their MS patients suffer from impaired mobility and the percentage is higher when patients are asked directly. We continue to work diligently towards our goal of making prolonged release Fampridine tablets available to MS patients outside of the United States. Our organization is also gearing up for Phase III data readouts and regulatory submissions on our oral MS treatment BG-12. At ECTRIMS, we presented new data on the potential neuro protective properties of BG-12. Oxidative stress is increasingly being recognized as an MS relevant cellular injury mechanism, which contributes to Central Nervous System tissue damage. In primary cultures of human spinal cord astrasite, BG-12 activated the NR-2 pathway and protected cells from death due to oxidative stress. We are on track for data readouts from the defined study during the first half and from the confirmed study during the second half of next year. Site activation and patient enrollment continues to progress for the advanced study of regulated Interferon beta-1a. There continues to be investigator enthusiasm for the product, which is expected to improve the convenience of Interferon treatment for MS patients, thus, improving patient adherance to therapy. As you will recall, this trial is being conducted under a special protocol assessment from FDA. SELECT, which is the first of the two registrational trial of daclizumab, is fully enrolled, and we expect data from this trial in the second half of this year. Daclizumab is believed to work by selectively targeting pathogenic autoreactive T cells without causing immune cell depletion. At ECTRIMS, our presentations reported the increase in CD56bright NK cells that occurs with daclizumab treatment and its correlation to the reduction and gadolinium-enhancing lesions in the brain. Thus, daclizumab would represent an entirely noble approach to treating MS. We, along with our partner Roche, have also announced positive results from the 24 weeks Phase II trial of Ocrelizumab in patients that's relapsing remitting MS. In this study, Ocrelizumab demonstrated reductions in disease activity as measured by gadolinium-enhancing lesions and relapse rate. Specifically, there was a robust 89% to 96% reduction in enhancing lesions compared to placebo. The reduction in annualized relapse rate at 24 weeks was also significantly lower than placebo with the reduction of 73% to 80%. Clearly, these data point to the potential of Ocrelizumab as a highly efficacious therapy for relapsing remitting MS. We continue to diversify our neurology pipeline beyond MS. In August, we announced the licensing agreement with Knopp Neurosciences to develop and commercialize dexpramipexole for the treatment of ALS and potentially other indications. The Phase II data showed favorable dose-related treatment effects and preserving motor function and extending survival. And there is growing interest among ALS investigators as we look ahead to the Phase III trial. Dexpramipexole has received orphan drug designation both in the U.S. and Europe, as well as fast-track designation in the United States. We expect to initiate this trial in the first half of next year. In conclusion, our R&D organization continues to advance our neurology pipeline and make progress on TYSABRI risk stratification for PML. Our efforts position us well for future growth, and we look forward to providing you with updates on new developments in the quarters ahead. With that, I'll now pass the call over to Dr. Francesco Granata, our Head of Global Commercial Operations.

Thank you, Al, and good morning, everyone. This is a pleasure for me to join you today and report on a very productive third quarter. As this is my first earnings call, I would like to begin by sharing the three key priorities I've been focused on since I joined the company. Hopefully, that will provide some context as I walk through our Q3 performance. The key priorities are: to maximize our commercial business with a special focus on turning around the U.S. AVONEX performance; to literally defend our MS franchise against competition from new therapies; and to strengthen the commercial organization talent. With these priorities in mind, let me begin by reviewing our product performance for Q3 2010, in which combined AVONEX and TYSABRI revenue increased by 10% year-over-year. Let me start with AVONEX. With wide revenue grew by 11%, this is the third quarter of 2009. We continue to see solid demand growth overseas, and the U.S. is starting to show signs of improvement. Outside the U.S., AVONEX unit sales grew by 6% year-over-year. U.S. unit sales grew by 1% sequentially. As George mentioned, this is the first time we have had two consecutive quarters of U.S. AVONEX unit growth since 2004. Why this is too early to draw any firm conclusion? The market performance over the past two quarters appeared to be a break from what has been the plan over the past three years. We have been able to hold market share both in the U.S. and overseas for a few months now. In the going markets, the result is expected as being an increasing unit growth and positive pull through to the revenue line. Moving onto TYSABRI performance, let me preface my comment by saying that I'm going to focus on in-market revenue and demand, while Paul Clancy will provide more detail on how in-market revenue translate into Biogen Idec revenue later in the call. Q3 were wide in market TYSABRI revenue grew by 9%, that was the third quarter of 2009. U.S. in-market revenue grew by 15%, patient grew by 16% and units grew by 6%. Outside the U.S., revenue grew by 4%, however, foreign exchange reduced revenue growth outside the U.S. by 7%. The number of TYSABRI patients outside the U.S. grew by 25%, and unit sales grew by 15%. A decline in patient compared during the fourth quarter of 2009, inventory changes and increased participation in our patient assistance programs close the GAAP between unit demand and patient growth on a year-over-year basis. In early 2010, we instituted a number of educational programs and strengthen our patient assistance programs. These resulted in a stabilization in discontinuation in compliance rates, which have been sustained during the past two quarters. At the same time, we have seen an improvement in the number of U.S. TYSABRI patients ahead. Looking ahead, we feel that our potential growth catalyst for both AVONEX and TYSABRI. Al Sandrock already mentioned the terrific progress our R&D team is making with TYSABRI risk stratification. If successful, we may be able to identify a large sample population of patients that may be at much lower risk of developing PML. Also, we are seeing strong growth in markets outside the U.S. and Europe. In the third quarter, revenue from these market increased by 18% versus Q3 2009. We have not yet launched TYSABRI in China, Japan or Russia and are just now in the midst of the launch phase in India, Brazil and Argentina. With South East Asia, the Middle East and other Latin American market to follow in 2011. We have only just began ramping up our next phase in India and Latin America and have no AVONEX presence in China and several Southeast Asian markets. So, there are still opportunity for both brands as these markets develops. We know that there are a lot of questions about the impact of new therapies on our MS franchise. Let me share our view. We believe that both AVONEX and TYSABRI will fair well as the safety, efficacy, polaribility and convenience of new therapies is evaluated in real-life settings. With AVONEX, patients and physicians can take comfort in stopping in the sting on a therapy that is well tolerated and is well documented nearly 15 years track of record of safety and efficacy over the cost of 1.4 million patient a year. With TYSABRI, we have a powerful efficacy profile, showing significant reductions in both annual relapse rate and importantly, physical disability progression through well controlled Phase III studies and four years of postmarketing experience. For some patient segment, incremental dosing, convenience may be more important than the established long-term efficacy and safety demonstrated with existing therapies increasing a chronic debilitating disease. These new problems would likely meet to the need of some of the approximately 170,000 patients worldwide who are not on therapy today due to profile of currently available treatment. Overall, we feel that we have the best offering for MS therapies in the industry. Accordingly, we have announced our sales and marketing capabilities and are now depending the franchise synergy. During the third quarter, we made progress in several ways. First, we have continued to establish a strong focus on the field force, both in terms of share of voice and quality. We have completed the hiring of a number of experienced sales and marketing leaders. We have strengthened the skills and competencies both of our U.S. sales force and across the entire commercial organization. And we have clearly put our self on impact to be in the highest rate in the neurology sales force in the industry. Second, we have further increase the quality and output of our new global marketing teams. In this respect, we resegmented the market to be more customer need focused and position our problems accordingly. Third, we have significantly increased our focus on customers across the organization. We upgraded the tools and resources available to our sales, marketing patient services and managed market functions. And we have launched new nurse initiatives toward support patient consistency and compliance. Lastly, we continue to build on our sustained profitable growth so we have added field force effectiveness and market especially to expand our capabilities in these important areas. In the coming quarters, I will continue to keep you updated on our progress. In summary, we saw a strong revenue growth in Q3 and the second consecutive quarter of stable AVONEX unit demand. Looking ahead, our commercial infrastructure is trying to vigorously defend our MS franchise against new competition while capitalizing on emerging opportunities overseas. With that, I will now turn the call over to Paul Clancy, our Chief Financial Officer.

Thanks, Francesco. I'll review our 2010 third quarter financial results. Our GAAP financials are provided in Tables 1 and 2 of the earnings release, Table 3 includes a reconciliation of the GAAP to non-GAAP results. Let me start with the differences between our GAAP and non-GAAP results for the quarter. First, we incurred $54 million expense related to the amortization of acquired intangibles. Second, we incurred $6 million per stock compensation expense. Third, the Knopp transaction involved purchasing a 30% equity interest and entering into a license agreement for the treatment of ALS. The equity interest resulted in recording in IPR&D charge of $205 million based upon the fair value of the entity, and we incurred a noncontrolling interest offset of $145 million. And finally, there was a $45 million tax impact on all of these items. Our GAAP diluted EPS were $1.05 in the third quarter of 2010. Now move on to the non-GAAP P&L operating performance of Biogen Idec, which we believe that it represents the ongoing economics of the business and reflects how we manage the business instead operational goals. Our Q3 2010 non-GAAP diluted EPS were $1.35. Total revenues for the third quarter of 2010 were $1,176,000,000, an increase of 5% over third quarter of 2009. We have a strong quarter commercially with AVONEX and TYSABRI, both increasing unit sales year-over-year, and together, delivering double-digit revenue growth in our MS franchise. These increase in MS revenue was partially offset by a 9% drop in our RITUXAN revenue as our ex-U.S. royalties continues to expire. Now I'll provide product level detail on our revenue performance. Q3 worldwide AVONEX product revenue was $644 million, an 11% increase over Q3 2009. The U.S. business grew 11% to $387 million in the international AVONEX business, also grew 11% to $257 million. Let me provide insights on some of the key metrics for AVONEX. In the U.S., inventory in the channel ended at 2.2 weeks in the third quarter, slightly above the second quarter, providing a modest benefit. On a sequential basis, as Francesco mentioned, U.S. AVONEX unit increased 1%, solid performance particularly for the third quarter when overall market demand typically softens during the summer months. Internationally, AVONEX units grew a solid 6% versus prior year. International AVONEX revenue benefited from a $17 million gain from hedging, which largely offset the year-over-year unfavorable impact from exchange rates. Moving to TYSABRI. Q3 2010 worldwide TYSABRI in-market product sales were $307 million, a 9% increase over Q3 2009. In the U.S., in-market TYSABRI sales totaled $151 million for the third quarter, a 15% increase over Q3 2009, and a 4% increase sequentially. And internationally, TYSABRI in-market sales were $156 million, a 4% increase over Q3 2009. I'll again provide insight of some of the key metrics for TYSABRI. As of the end of September, we had approximately 55,100 patients on therapy, including about 600 in clinical trials. Units grew 6% year-over-year for TYSABRI in the U.S. and 15% internationally. In U.S., a number of factors impacted the results. The price increase at the end of Q2, while favorable, was partially offset by increased discounts and allowances, some tollpay assistance and the impact of accruals for health care reform. In the U.S., levels of inventory in the channel declined by the end of Q3 by 0.5 weeks, resulting in an unfavorable impact of approximately $5 million. In the U.S., we're witnessing a relatively stable compliance rate, specifically the use of drug suspensions and alternative dosing schedule are in the mid-to high-single digit percentage of patients. This percentage while higher than Q3 2009 has been relatively stable throughout all of 2010. Internationally, TYSABRI product sales were unfavorably impacted by exchange rates on the year-over-year basis by about 7% or approximately $11 million. So while the quarter did experience these impacts, TYSABRI patient evolution continued to perform solidly, growing 2300 patients worldwide for the quarter. TYSABRI product sales for Biogen Idec were $221 million, $61 million in the U.S. and $160 million outside the U.S., which include a $4 million hedge gain. In the U.S., we'll resell TYSABRI to the net price decline year-over-year because we lowered our purchase price to reflect the use of product material that was previously expensed to R&D. This lower U.S. TYSABRI price for Biogen Idec is offset by lower COGS, resulting in a modest benefit on the gross margin and the bottom-line. We've largely completed using this previously expense material, so this particular effect on the U.S. price will not carry forward substantially into the fourth quarter. Now moving onto the RITUXAN collaboration revenues referred to as revenue from unconsolidated joint business. We recorded $258 million in revenue for the quarter, a decrease of 9% on a year-over-year basis. I'll walk through each of the three components comprising the revenue from RITUXAN. First, our share of U.S. RITUXAN profits. Net U.S. RITUXAN sales were $675 million in the third quarter, up 1% over prior year. Our profit share from that business was $204 million. Second, we received revenue on sales of Rituximab outside the U.S., and in Q3 2010, this was $38 million. Royalties were down 42% as our 11 year royalty term expires on a country-by-country basis. Third, in the third quarter, we reimbursed $60 million for selling and developing costs incurred related to RITUXAN. Moving to royalties. Royal treaties were $36 million for the third quarter of 2010, a 4% increase versus prior year, largely due to an increase in our royalties from the medicines company. Corporate partner revenue for the third quarter was $5 million. Now turning to the expense line to the non-GAAP P&L, which includes the adjustments I described earlier. Q3 COGS were $96 million or 8% of revenues. Q3 R&D expense was $316 million or 27% of revenues. R&D expense includes $26 million related to the upfront payment related to the Knopp Neurosciences transaction. Q3 SG&A expense was $241 million or 20% of revenues. Our collaboration profit-sharing lines totaled $64 million in expenses for the quarter. Q3 other income and expense was a $7 million expense due to the declining yields and cash balances in our marketable securities portfolio. We completed, as George noted, the $1.5 billion share repurchase plan announced this April. During the third quarter, we purchased the retired 9 million shares and a total cost of $468 million. As a result, our fully diluted weighted average shares outstanding were approximately $2 million for the third quarter. We're able to return such a significant amount of cash to our shareholders because of our ability to generate robust cash flow. During the third quarter, we generated $420 million of cash from operating activities, bringing the total to the first three quarters to $1.2 billion. Our cash and marketable securities ended the quarter at $1.4 billion. Our Q3 non-GAAP tax rate was approximately 27%, including approximately $5 million in various discreet items. The GAAP tax rate was impacted due to transaction in the quarter as certain charges did not generate a tax deduction. This brings us to our Q3 non-GAAP diluted earnings per share which were $1.35, a 21% increase over Q3 2009. Since George's appointment, we've been evaluating the company's strategic priorities in examining additional meanings of maximizing shareholder value. We anticipate announcing the results of these evaluation before the end of the year which may change the company's financial trend. I'll provide detailed financial guidance for 2010, in conjunction with this communication. Certainly, we feel very good about the execution of our business objectives for 2010, including being on track to achieve our original goal of mid-single digit revenue growth for the full year. So the third quarter was another strong quarter financially with double-digit earnings per share growth and the completion of the share repurchase program. With that, I'll hand the call over to George for his closing comments.

Okay, thanks, Paul. We've been talking for a while, so I'll just give a very brief sum up. I think financially, we increased revenues, we delivered double-digit EPS growth, and we completed return in $1.5 billion in cash to shareholders. NMS, we continued to [indiscernible] momentum by adding another 2300 patients, made significant progress on TYSABRI risk stratification and halted a multiyear trend of declining AVONEX use in the U.S. The breadth and quality of our MS clients and displayed at ECTRIMS was impressive. Moving forward, we'll continue to focus on growing commercial business, optimizing our R&D investments and instilling a sense of urgency in the company. I look forward to updating you on our progress as we begin to implement plans later this year. So I'll conclude by saying that I have a tremendous amount of enthusiasm for Biogen Idec's future, and with that, I will close our remarks and open up the call for questions.

[Operator Instructions] .

Thanks, George. Operator, we're ready to open up the call for Q&A. We ask that you please limit yourself to one question, and then, we enter the queue for follow-up questions. [Operator Instructions] Operator, we're ready for the first question.

[Operator Instructions] And your first question comes from the line of Josh Schimmer with Leerink Swan. Joshua Schimmer - Leerink Swann LLC: Just curious about the JCV assay and if you can get the label amended to include it in next year, will that enable widespread commercial availability? If not, what would it take? And if you've gone 20 for 20 for the patients being positive prior to developing PML with a 2.5% false negative rate, does that mean you ultimately expect to go in like 98 per 100?

It's certainly -- the math would certainly add up. The commercial availability, there's two part regulatory process. One is to get the laboratory tests approved and the others to get into the label. And we're making progress on both fronts. We're in the middle of regulatory interactions on both fronts. So yes, the plan is to -- as soon as possible make the test widely available and have something in our label to how it affects the risk of PML. And yes, the false negative rate is 2.5%, we saw something very similar in the low single digits and STRATIFY 1. Time will tell what the actual numbers turn out to be.

Your next question comes from the line of Mark Schoenebaum with ISI Group. Mark Schoenebaum - ISI Group Inc.: So Novartis and Glennie[ph], they announced pretty generous co-pay assistance, I think, that has very little income restrictions. Can you guys maybe review what your co-pay patient assistance programs are? And do you have any plans to update those to deal with any competitor pressures?

It really is specific in the United States that we actually have allowed for certain charitable institutions to work with patients. That's currently the process for patients that are seeking AVONEX that need co-pay assistance. We'll continue to look at alternative means along the way.

Your next question comes from the line of Eric Schmidt with Cowen and Company. Eric Schmidt - Cowen and Company, LLC: Kind of a follow-up question to Mark's maybe a little bit of a broader view. I was wondering if Franchesco could just talk a little bit about what you're seeing in the marketplace with regard to Glennia, their share of voice, their message, and how you're combating that impact?

We have more if you want and a doctor feedback, it's too early to give you very detailed feedback on the reception of delineating the marketplace. We see the capital things definitely, one is that the some of the payor are creating restrictions to access to Glennia, probably because of still not fully documented in a real-life condition risk-benefit profile and the deception that the efficacy, close to the efficacy of the interference. So we have seen some move of even bigger payors toward these directions, creating some stage that access to Glennia. And we also have [indiscernible] portfolio, a market that steel those risk-benefit profiler to be seen in real-life conditions. So from the commercial side, we feel that we are fully prepared to manage the challenge of this new competition. We think that the new orders that we'll have are all in the therapy, we'll bring additional value to the patient while we still think that we have the strongest franchise offered in the MS arena. So we'll continue to stay focused on our communication. We'll continue to upgrade the skills of the communicational skills and the training of our reps. We'll continue to invest in Science to develop new detail on our products and we feel that comfortable in continuing to grow our sustained profitable growth to this focus on our existing portfolio.

Your next question comes from the line of Geoff Meacham with JPMorgan. Geoffrey Meacham - JP Morgan Chase & Co: Question on new ads for TYSABRI, their down sequentially, and I'm curious what your thoughts are, whether this was attributable to seasonality. And then if you did see an impact from the JC virus assay, when would you expect that to help with the new starts? And then, do you have a view that there may be a warehouse effect from new starts on TYSABRI from Glennia?

This is Paul. Let me give just a little bit of more color on the data, and then, I'll ask Francesco to kind of give some color in the marketplace. 2300 patients for the quarter in terms of adds. So that's actually quite similar, technically on a weekly basis, I think we're up at a high 170s and we're at the mid-180s in the last quarter. So, I think that's quite frankly, in the magnitude of a rounding error in terms of any change. So, I think what we've seen over the last six months is very, very study steady, sure TYSABRI growth. We're seeing not meaningful changes at between one part of geography or another. So U.S. and international both kind of growing along, and we're not seeing any kind of bump with respect to discontinuation rates, which we, as we've talked about in the past, have a clearer view in the United States only. So I think the trends continue to demonstrate very solid progress for TYSABRI for Q3, Francesco?

Thank you, Paul. We stayed very focused on our communicational strategy on the favorable risk-benefit profile of TYSABRI. This has been very well received by our customers. Clearly, by the fact that we have added 2300 patients in a moment in which we don't yet fully available the risk stratification. Tools means that the customers confidence in adding new patients, they see our all for TYSABRI in the treatment of their patients, and this is justified by, again, the patients additions but also by the stability of the discontinuation that we have seen over the past couple of quarters. Again, it means that if the customer feels that the problem can bring value to their patients and we'll continue to stay focused on this communication and until we'll have available the risk stratification, hopefully, the risk stratification tool. We'll still think that even when we get the risk stratification, we will see various patients being added to the therapy because of the -- again, high efficacy performance of TYSABRI. And that's all.

Your next question comes from the line of Rachel McMinn with Bank of America Merrill Lynch. Rachel McMinn - BofA Merrill Lynch: I guess on the TYSABRI question, just a follow-up on Jeff's question. If you had a 15% year-over-year increase in sales and 19% year-over-year increase in price, I think we're just trying to understand what the disconnect is there? Should you only recognize part of the price in the quarter? And then secondly, could you just help us understand what the price differences between U.S. and ex-U.S. AVONEX?

This is Paul. Let me try take a crack at each of those questions, Rachel. The 19 -- I kind of tried to outline the -- in broad strokes, the price increase. Behind the price increase, there were certainly, increased discounts and allowances, and that would be on a channel by channel basis. We've had increase accruals related to healthcare reform. That had been going on, obviously, since the beginning of the year. But to some extent it really started in Q2 and Q3. And then, there was a little bit of increase with respect to co-pay assistance in the United States. I think the way to think about is it may take a couple of quarters for the full pull through of the price to kind of be realized and we'll kind of have to see that monitor along the way. With respect to the difference on AVONEX outside the United States and inside the United States, a pretty public information as it relates to inside the United States, outside the United States it is actually looking right now, Rachel. It is roughly -- it's about 50% or 6% of that, but it really can vary on a country-by-country basis to some extent, and it certainly -- we have a portion of our business outside the United States that is distributors and those are kind of individual agreements in terms of what the transfer price is.

Your next question comes from the line of Joel Sendek with Lazard Capital Markets. Joel Sendek - Lazard Capital Markets LLC: On every label change on the laboratory test. You said you want the test to be available ASAP. I'm wondering realistically how long that might take. And then, as far as the label change is concerned, could you cap how likely it is that the FDA will pretty much take your proposal or whether it's going to be protected back and forth regardless of the exact language?

In terms of the test approval, their difference is across the Atlantic. In Europe, it's a pretty straightforward path regarding a CE Mark. In the U.S., it's a bit more complicated and the regulatory landscape is evolving. I think it's probably not wise to comment on exactly what our regulatory interactions are but they are ongoing at this time. In terms of handicapping, again, I don't think it's great practice to handicap what the FDA might or might not say. So we'll top there.

Your next question comes from the line of Thomas Wei with Jefferies. Thomas Wei - Jefferies & Company, Inc.: I just wanted to follow-up on TYSABRI for the quarter. So within beside the price discussion, can you just go over again why TYSABRI sales would have been down 4% sequentially in the U.S. on a unit basis? I'm a little bit confused about that, how we reconcile the growth and the number of patients that you're talking about and what sounds like a very modest impact on the wholesale inventory stacking front with a 4% unit decline.

It actually wasn't a modest impact on the wholesale. The biggest impact on the sequential quarter was the inventory build, it kind of pull down from Q2 going into Q3. I think that was the most meaningful impact that we saw quarter-to-quarter.

Your next question comes from the line of Geoff Porges with Bernstein. Geoffrey Porges - Bernstein Research: Just a follow-up on the JCV assay, could you give me a sense of expectations for what the risks, communications, the positions and paces will be because it seems though as if for the PML cases are incurring in patient's to a JCV antibody positive then surely the risk of PML and those patients is twice the risk that is currently quoted on the label so one in 500 or one in 300 or something like that. So in that summary that you said to include in the label and include the communication to patience. And secondly, how are you advising physicians who find out that their patient's JCV antibody positive who are on TYSABRI, how should they handle those patients differently to the patients who are JCV antibody negative?

Well, I think, I think the assay is going to be a risk factor just like duration of treatment by immunosuppressive use which is already on the label. I think antibodies will join those other two risk factors as another risk factor to take into account. And I think that, people who are antibody positive, I think it should come down to an individual benefit risk position. As I said before, somebody has severe MS and they haven't done well on the first-line of therapy and than I've gone up to TYSABRI, that patient should still have a choice as to whether or not they should continue TYSABRI or not. And I would hope that the doctor makes an individualized benefit risk position.

Your next question comes from the line of Robyn Karnauskas with Deutsche Bank. Robyn Karnauskas - Deutsche Bank AG: I guess I have some questions for you regarding expenses, so COGS seems lighter this quarter, and excluding the Knopp expense in R&D, that was also light. So can you help us think about how the model expense is going forward?

The COGS, if you're comparing on a quarter-to-quarter basis, very accurate on a sequential basis. If you recall last quarter, we had a couple of things that brought COGS up a little bit, inclusive of the manufacturing shutdown and bearing the costs related to that. So, I think, we again had a very favorable quarter with respect to very minimal inventory write-offs, and I think that the COGS rate that you're seeing in the P&L right now is probably indicative of future quarters. With respect to R&D, I think, as I said in my comments, I think it will probably be best if we do that along with the in conjunction with the communication before the end of the year in terms of future thinking as it relates to R&D. But this quarter incurred three included about a $26 million upfront payment to Knopp and kind of suffice it from there.

Your next question comes from the line of Jason Zhang from BMO Capital Markets. Jason Zhang - BMO Capital Markets U.S.: Question on AVONEX, is there any rate, good to see two quarters up incremental in the U.S. I guess my question is, how realistic do you think that trend will continue and if you pick up the inventory buildup in the third quarter, do we still see Unit in the third quarter and if you believe this trend will continue, what do you think is really the reason for this unit growth and pretty, I'm kind of wrong. What exactly can you pinpoint to your effort that explain this?

As you remember, we have prioritized, we have been focused on a few priorities and we stayed focused on these. We have, as you remember, increased our investment in the structure both in terms of share of voice and the quality of the sales force. We have increased our communication tools. We have increased the focus on the customers. We have increased patients and customers services, and we have also strengthened the global sanction in order to make sure that we delivered the highest quality, tactical and long-term plans. So we are in the phase of implementing all these actions. We have implemented most of them, but we are still in the midst of continuing the implementation and the execution of these strategies. So largely, we think that this results can be sustained. And wee are confident about our strategy. We think that by improving these area of skills, we can continue our strategy to grow marketshare of our -- to stabilize and grow market share on both our TYSABRI, which is the most powerful tool to defend our franchise best into the new entrance and continue to develop our strategy of sustained profitable growth. Jason Zhang - BMO Capital Markets U.S.: If you take the inventory buildup, will the unit still grow in the third quarter?

I mean, I think it's right around hovering on flat. So it was on a sequential basis 1%. The AVONEX ended the quarter slightly above in terms of weeks in the inventory. But I would point out, I think, that the broader trend that we're kind of in terms of better performance on AVONEX and the United States on a unit basis, which we have been focused on now since Francesco's arrival still hold true. I mean, Q3 is often time the summer months in Q3 around the world often times quite soft. So we are generally looking at Q3 whether it's AVONEX or [indiscernible], just the MS class at whole. It's kind of softer performance. Certainly, we've seen that in AVONEX through and through. So, I think, we do have two quarters in a row now, two winnings in a row if you will of a very, very good performance.

Your next question comes from the line of Yaron Werber with Citi. Yaron Werber - Citigroup Inc: I have a question about -- just help us maybe understand a little bit. I know that Glennia was priced substantially higher than some of the other drugs out there and there's growing expectations that's going to provide more room for the other drugs in the class or the other drugs in the market, rather to increase prize. But can you help us understand just a little bit on how our pairs looking of this market? Are they sort of agnostic on whether a new drug comes in that provides some novelty whether it's oral and maybe a new mechanism of action and some good potency and they view all the drugs as having pricing power, or do you think there's going to be differentiation from this point onwards, and specially, just given that some of your drugs are pretty much looking at flat unit growth. So I'm just trying to -- also handicap of what to expect in the future.

Early days as it relates to what's the pair reactions, so I think very similar to kind of early days in terms of what's the position in patient reaction, I think it's equally early days, we're trying to keep our ears to the ground on a pair by pair basis trying to understand what the dynamics in the marketplace are, but I mean quite frankly, it's a little bit early days right now.

Your next question comes from the line of Jason Kantor with RBC Capital. Jason Kantor - RBC Capital Markets Corporation: I have a question on TYSABRI. Can you quantify the impact in dollar value for this previously expensed TYSABRI, what was the dollar value impact on the topline and also on the cost of goods? You mentioned in your answers to questions about expenses going forward, the COGS level this quarter is something we should expect going forward, but you also said in your commentary that this aspect if it's going away. So are there improvement that we should be factoring in?

No, let me try to explain that, Jason. Just so we all understand. Occasionally, we'll build TYSABRI inventory for clinical trials or for certain new process improvement run. In this instance, we had earmarked it for R&D trials, and as a result, it's expensive to the collaboration. We have excess inventory that we wanted were allowed to bring into the commercial setting. And as a result, we took opportunity for enhanced profitability in the collaboration to do that. That affected our Q2 results, as well as our Q3 results to the way that affects us, Biogen Idec, in the United States is a reduced purchase price to a man. And I think in the third quarter, I don't have it handy, but it seems like a single-digit, millions of dollars price the mid-single digits millions of dollars impact, and we just have largely bled through that inventory. So there's a little bit more to go and in, but it won't be an meaningful impact for Q4 and going forward. I don't anticipate that that's a typical thing that happens for biogenetic going forward.

Your last question comes from the line of Chris Raymond with Robert W. Baird & Co. Christopher Raymond - Robert W. Baird & Co. Incorporated: Just a question on health care reform impact. You guys outlined I think an impact this year of $70 million to $90 million when all that stuff came out. And I didn't noticed that you have delineated the impact for the quarter. Can you maybe address that gives us a round numbers and also is there's an update to that impact for the full year?

Thanks for the question, Chris. That was our original when health care reform came at the end of Q1, and we're making assessments as we were moving into Q2. Moving out of our last quarter call, we had narrow that range to be at $40 million dollars to $50 million impact, and that's consistently what we're looking at right now. It is the biggest impact since the expansion of managed Medicaid. That is followed by the additional rebate on Medicaid from 15.1 to 23.1%. So I think we're thinking that as in the $40 million to $50 million range. Now, haven't meaningfully changed our accruals in Q3. And I think that the impact is bled throughout the impact is bled throughout the year as we look at the P&L right now.

That was our last question. Thank you for your participation in today's call. You may now disconnect.