Matt Calistri - Vice President, Investor Relations Michel Vounatsos - Chief Executive Officer Michael Ehlers - Executive Vice President, Research and Development Jeff Capello - Chief Financial Officer

Michael Yee - Jefferies Umer Raffat - Evercore Geoff Meacham - Barclays Geoffrey Porges - Leerink Eric Schmidt - Cowen & Company Matthew Harrison - Morgan Stanley Alethia Young - Credit Suisse Ying Huang - Bank of America/Merrill Lynch Chris Raymond - Piper Jaffray Robyn Karnauskas - Citigroup Terence Flynn - Goldman Sachs Cory Kasimov - JPMorgan Carter Gould - UBS

Good morning. My name is Chris and I will be your conference operator today. At this time, I would like to welcome everyone to the Biogen Fourth Quarter and Year End 2017 Financial Results and Business Update. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the conference over to Mr. Matt Calistri, Vice President, Investor Relations. You may begin your conference.

Thank you and welcome to Biogen’s fourth quarter and full year 2017 earnings conference call. Before we begin, I encourage everyone to go to the Investors section of biogen.com to find the press release and related financial tables, including a reconciliation of the GAAP to non-GAAP financial measures that we will discuss today. Our GAAP financials are provided in Tables 1 and 2. Table 3 includes a reconciliation of our GAAP to non-GAAP financial results. We believe non-GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally. We have also posted slides on our website that follow the discussions related to this call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. On today’s call, I am joined by our Chief Executive Officer, Michel Vounatsos; Dr. Michael Ehlers, EVP of Research and Development; and our new CFO, Jeff Capello. Before I conclude, I would also like to note that starting with the Q1 2018 earnings call we will post press releases related to future earnings calls materials and investor events on the Investors section of Biogen’s website, www.biogen.com and issue statement on Twitter when they become available. We will do this instead of publishing press releases related to future earnings calls, earnings releases and Investor events via Newswire services. Our Twitter handle is @biogen. Now, I will turn the call over to Michel.

Good morning, everyone and thank you for joining us. First, let me start with some financial highlights. Biogen closed 2017, with an all-time high in quarterly revenues of $3.3 billion. For the full year 2017, Biogen generated another all-time high of $12.3 billion in revenues. On an apples-to-apples basis, excluding hemophilia, full year revenues grew 15% versus 2016. Full year revenues grew 7% when we include hemophilia for 2016 and January 2017. Starting in 2018, we believe that overall the new U.S. tax reform will have a positive impact to our profitability and our ability to invest for the future. But in Q4, we took a one-time charge of $1.2 billion in line with what you are probably seeing from other public companies. Jeff will provide additional detail shortly. Therefore, full year GAAP earnings decreased 30% versus 2016 to $11.92 a share. Full year non-GAAP earnings were $21.81, an 8% increase versus full year 2016, while being impacted by over $500 million of expenses due to several business development transactions including our deals BMS, Alkermes and Ionis as well as our charge related to the ZINBRYTA impairment. Now, let me review the year. 2017 was clearly a very productive and successful year for Biogen. We launched a new focused and well articulated strategy with the longer term goal of becoming the leader in neuroscience and the fastest growing large cap biotech. We defined priority designed to drive future growth first fortifying our core MS business; second, executing on the launch of SPINRAZA and third, creating a lean and simple operating model. The goal of these priorities is to drive significant cash flow generation and invest those to create new sources of value beyond MS and SMA. We are pleased with the work the team has done to execute on our strategy which has led to significant progress for Biogen. Let me now reflect on some of our key results across each of these priorities. For our first strategic priority maximizing the resilience of our MS core business, we grew global MS revenues including royalties from OCREVUS to $9.1 billion, an increase of 4% versus 2016. Our MS products now treat over 340,000 patients globally, a 3% increase over 2016. In the U.S., our MS revenues were stable versus 2016 and including OCREVUS royalties, MS revenues in the U.S. increased 2%. We strengthened our IP position for TECFIDERA, our leading oral therapy through a settlement and licensing agreement with Forward Pharma. We received favorable rulings for both our IPR proceeding and interference case. We achieved expanded access for 2018 in the U.S. for our MS portfolio. We executed 5 value-based contracts in the U.S., which we hope will give us opportunity to learn and develop new contracting models to better serve patients. We licensed BIIB098 from Alkermes, a Phase 3 monomethyl fumarate with a potentially differentiated profile to TECFIDERA we expect filing will occur later his year. For our second strategic priority, spinal muscular atrophy, we delivered one of the most exciting biotech launch of the year with SPINRAZA global revenues of $884 million exceeding many expectations. As of the end of 2017, there were approximately 3,200 patients on therapy across the post-marketing setting, the EAP and clinical trials. We also launched a new collaboration with our partner Ionis to identify new ASO drug candidates for SMA with the goal to enhance strategic alternatives. And we are exploring a number of avenues, including device partnerships to improving surgical delivery with the recent example being our research collaboration agreement with Alcyone to leverage the device platform. For our third strategic priority creating a leaner and simpler operating model, we identified opportunities to streamline our operation to help fund further investment in high-value R&D and new commercial activities. We benchmarked against multiple businesses to challenge ourselves to be as effective and efficient as possible as we aim to create an innovative operating model designed for the future. We believe this will enable us to redirect up to $400 million by the end of 2020 to be reinvested and prioritize value creating opportunities across our R&D and commercial organizations. For our fourth strategic priority developing and expanding our neuroscience portfolio Biogen added seven new clinical stage programs in 2017 across our core and emerging growth areas through the advancement of our own internal candidates as well as external business development. And finally, our fifth strategic priority reprioritizing our capital allocation towards long-term growth, while also continuing to opportunistically buyback shares. We have emphasized investing in future growth while delivering near-term results and turned 2017 into one of our most productive year for business development. We also repurchased 4.9 million shares for approximately $1.4 billion at an average price of $278 a share. And importantly in terms of strategic alliances we renegotiated our agreements with Eisai and Neurimmune with the aim to improve long-term economics of aducanumab. In addition to the strong progress in 2017, I am also excited by new additions to our executive team. Jeff Capello has joined as Executive VP and Chief Financial Officer, Chirfi Guindo has joined as Executive VP and Head of Global Marketing, Market Access and Customer Innovation. I believe that we now have great leaders in all key position and Biogen is exhibiting well. We have a strong base business with significant cash flow generation and exciting new growth driver in SPINRAZA and accelerating momentum in R&D and business development to solidify the foundation for future growth. I look forward to carrying the strong performance through 2018 and beyond with our new executive team. I will now turn the call over to Mike for a more detailed update on our recent progress in R&D.

Thank you, Michel and good morning everyone. 2017 was the transformative year for Biogen R&D. We provided clarity on Biogen strategic priorities with the aim of becoming the leader in neuroscience. We believe this is an area right with opportunities, we are breaking science is opening up new avenues for drug development. We believe that Biogen has a competitive advantage in this space based on our strong track record and intense focus within our core growth areas and emerging growth areas within neuroscience. Our goal is to leverage our competitive advantage, target our investments and advance the world-class neuroscience R&D engine. To that end, we made significant progress in 2017 towards this vision. We made noteworthy advancements transitioning pipeline candidates from research to development with five transitions in 2017, nearly double Biogen’s historical productivity. In 2018, we aim to continue this level of productivity or even accelerate the number of candidates that transition to the clinic. As Michelle highlighted, we added seven new clinical stage assets in 2017, through both advancing internal candidates, and through external business development. And as you may have seen earlier today, we announced our first deal of the year, in this agreement we acquired the rights to Karyopharm’s first-in-class Phase 1 ready investigational oral compound KPT-350 for certain neurological and neurodegenerative conditions, primarily focused on amyotrophic lateral sclerosis or ALS. KPT-350 is a novel candidate that works by inhibiting XPO1, with the goal of reducing inflammation and neurotoxicity along with the increasing neuro protective responses. We plan on moving this asset into a Phase 1 study by the end of the year. As we develop and expand the Biogen pipeline, our aim is to increase overall productivity at every stage, de-risk the pipeline and continue to implement a robust external pipeline strategy that may include continued asset acquisitions, development partnerships for resource flexibility and risk sharing and early innovation partnerships. Earlier this month, we entered a precompetitive consortium with several of our peers to sequence the exempts of 500,000 participants in the UK Biobank, with the goal of assisting drug discovery and development by linking protein coding variance to human phenotypes. We believe this is a great example of our scientific leadership in the field. Before I hand it off to Jeff, I would like to spend some time highlighting several achievements from the fourth quarter starting with MS and neuroimmunology. As part of our long-standing commitment to the MS community, Biogen remains dedicated to advancing the treatment of MS and building upon our leadership position in the space. As Michelle mentioned, we licensed BIIB098, the MMF compound from Alkermes in the fourth quarter and we anticipate a filing by the end of the year. We are actively working to optimize the value and clinical potential of this asset. In December, we also does the first patient in affinity a Phase 2b study designed to evaluate the potential for opicinumab, the first in class human monoclonal antibody directed against LINGO-1 on improving pre-existing disability and relapsing MS patients through remyelination. We also had exciting new developments within Alzheimer’s disease and dementia. We presented new interim data from the long-term extension of the ongoing Phase 1b study of aducanumab called PRIME at the clinical trials in Alzheimer disease meeting in November. We believe the totality of the data from the Phase 1b study is compelling and supports the design of the Phase 3 studies. Phase 3 enrollment for aducanumab is going well and we anticipate the studies will be fully enrolled in mid-2018. Last month, we learned BAN2401 and anti-beta amyloid protofibril antibody being developed in collaboration with Eisai did not meet the criteria for success in its Phase 2 study at 12 months. The study remains blinded and the final analysis will be conducted when patients have completed 18 months which is expected in the second half of the year. In the final analysis, we are particularly interested in the Alzheimer’s disease composite score, or ADCOMS and its components such as the CDR-Sum of Boxes and MSC and ADAS-cog as well as brain amyloid levels as measured by amyloid pet and its overall safety profile. Beyond aducanumab and BAN2401, we are advancing four other clinical assets in Alzheimer’s disease, including a base inhibitor; two, anti-tile antibodies and an antisense oligonucleotide in collaboration with Ionis. We believe we have the industry’s leading Alzheimer’s portfolio. Turning to neuromuscular disorders, we made significant progress towards our strategic objective of accelerating our leadership in spinal muscular atrophy. Along with our partner, Ionis, we were awarded the prestigious 2017 Prix Galien USA award for Best Biotechnology Product for SPINRAZA. This award recognizes extraordinary achievement in scientific innovation that improves the state of human health and we are honored to have received this distinction. In November, the end of study results from ENDEAR, the Phase 3 study of SPINRAZA were published in the New England Journal of Medicine. The ENDEAR study highlights the therapeutic potential of this breakthrough treatment as most infants receiving SPINRAZA showed meaningful benefit regardless of their age or stage of the disease. As part of our commitment to the SMA community, Biogen remains dedicated to advancing potential additional treatment options for SMA. Last month, we entered into a new collaboration agreement with Ionis Pharmaceuticals to identify additional antisense oligonucleotide drug candidates for the treatment of SMA. In this agreement, we are exploring novel chemistries for advancing intrathecal ASO-based therapies that have the potential to reduce the dosing burden or increase the therapeutic effect. We also recently signed a research collaboration agreement with Alcyone that leverages their novel device platform with the hope of improving the intrathecal delivery of therapies for severe neurological conditions with the first year of interest being for SMA and particularly patients with spinal complications. We continue to believe that there is opportunity in gene therapy and are advancing our gene therapy asset for SMA toward the clinic with the aim of dosing the first patient by the middle of this year. Moving on to our progress and movement disorders, BIIB054, our anti alpha-synuclein antibody for Parkinson’s disease has recently started the Phase 2 study called SPARC and we dosed the first patient earlier this month. In Phase 1, the drug was well-tolerated at doses that are being used in the Phase 2 study and its safety profile and pharmacokinetic behavior, including CSF concentrations in both healthy control and Parkinson’s disease patients was acceptable and consistent with other monoclonal antibodies. Within acute neurology, we are currently conducting a Phase IIb trial with natalizumab in acute ischemic stroke with the aim of improving functional outcomes by limiting brain inflammation and therefore increasing neuronal survival in the post stroke period. With approximately 1.7 million ischemic strokes each year across the U.S., Europe and Japan, we believe there is significant opportunity if the trial is successful. The study is fully enrolled and we anticipate sharing top line results in the coming weeks. As a reminder, natalizumab is targeting acute ischemic stroke patients with mild-to-moderate severity with the therapeutic time window of up to 24 hours after stroke onset. This program complements BIIB093, our first-in-class IV glibenclamide therapeutic targeting brain edema in large hemispheric infarcts, with a planned Phase 3 start in the middle of this year. So, a very productive quarter and year as we build and advance our pipeline from human genetics to new novel clinical endpoints and clinical assessment tools to differentiated clinical development to potentially transformative modalities and delivery technologies, we continue to invest in and advance our asymmetric capabilities and neuroscience where our aim is to be the definitive leader. I will now pass the call to Jeff.

Thanks Mike. Good morning, everyone. Let me now provide a little more detail on our financial performance for the fourth quarter of 2017 and share with you our guidance for 2018. Let’s start with revenues. As Michel mentioned earlier, we had a strong Q4 2017 from a revenue perspective. Total revenues for Q4 grew 15% year-over-year to approximately $3.3 billion and grew 7% for the full year to $12.3 billion. Excluding the impact of the spinoff of our hemophilia business, total revenue grew 26% for the fourth quarter and 15% for the full year versus the prior year periods. Let me now provide more detail for our MS franchise revenues. Global fourth quarter TECFIDERA revenues were $1.1 billion, a 7% increase versus the prior year. This included revenues of $832 million in the U.S., an increase of 4% versus Q4 ‘16 and $244 million outside the U.S., an increase of 22% versus the fourth quarter of 2016. Despite the benefit of a roughly $20 million increase of inventory in the channel in the U.S. versus the third quarter of 2017. We are pleased with our net low single-digit growth versus Q4 ‘16 as we absorb the impact of OCREVUS. In addition, we are very encouraged by the growth outside the U.S. driven by patient growth across almost every large market in Europe and strong emerging market growth. For the full year, worldwide TECFIDERA revenues were $4.2 billion, an increase of 6% versus prior year. This includes $3.3 billion in the U.S. and $920 million in sales outside the U.S. Interferon revenues including both AVONEX and PLEGRIDY were $645 million for the fourth quarter, a decrease of 6% versus Q4 ‘16 due to continued shift from the injectable platforms to oral or high efficacy therapies. This included $449 million in the U.S. and $196 million in sales outside the U.S. Within the U.S., AVONEX and PLEGRIDY benefited from the inventory build of approximately $15 million, while outside the U.S., Avonex benefited from a $9 million shipment to Brazil, neither of which are expected to recur in the first quarter of 2018. For the full year, worldwide interferon revenues were $2.6 billion, consisting of $1.9 billion in the U.S. and $757 million in sales outside the U.S. TYSABRI worldwide revenues were $463 million this quarter, a decrease of 2% versus the fourth quarter of 2016. This included $252 million in the U.S. and $211 million outside the U.S. In the U.S., revenues declined 13% versus the prior year. We saw an impact on TYSABRI shortly following the launch of OCREVUS both in terms of new patient starts and patient discontinuations. However, we believe both of these trends have now stabilized at new run-rate. Within the U.S., TYSABRI benefited from an inventory build of approximately $5 million. Outside the U.S., we had very strong TYSABRI growth of 14% versus prior year driven by both the large order of $6 million in Russia as well as solid growth in all major European countries driven by patient growth following the label update in 2017. For the full year, worldwide TYSABRI revenues were approximately $2 billion stable versus the prior year. We recorded U.S. revenues of $1.1 billion and $859 million internationally. As expected, across our MS business, we saw an increase in discounts and allowances in the fourth quarter partly due to seasonality. Throughout 2018, we expect another couple of 100 basis points of pressure on discounts and allowances with the typical seasonality in the first and fourth quarters. Despite this dynamic, we expect roughly flat performance for our total MS revenues for 2018 when you include the impact of the OCREVUS royalty. This corresponds to a low single-digit contraction in our MS revenues, excluding the OCREVUS royalties. Additionally, we expect the potential inventory drawdown in Q1 2018 coming off the build of approximately $40 million in the fourth quarter of 2017. Let me now move to SPINRAZA. Global fourth quarter SPINRAZA revenues were $363 million. This included revenues of $218 million in the U.S., an increase of 10% versus the third quarter and $144 million outside the U.S. almost doubling quarter-over-quarter. For the full year 2017, worldwide SPINRAZA revenues were $884 million making it one of the most successful rare disease launches in history. This included $657 million in the U.S. and $227 million in sales outside the U.S. In the U.S., we now see over 275 sites that have submitted start forms, of which 215 have dosed at least one patient. We saw 33% increase in the number of patients on therapy in the U.S. as compared to the end of the third quarter. Similar to last quarter, revenues grew at a lower rate than patients due to loading dose dynamics with roughly half of revenues coming from new patients started dosing in the fourth quarter. In the U.S., we believe that new patient starts in the fourth quarter were weighted towards the beginning of the quarter as we saw an impact on demand during the holiday weeks. As a result, we expect a relatively lower contribution in Q1 2018 from these patients as they will have worked through many of their loading doses in the fourth quarter 2017. As expected, we are seeing an increasing contribution from maintenance doses as patients who started earlier in the year transitioned to dosing once every 4 months on a chronic basis. In the U.S., approximately 25% of SPINRAZA revenues in the fourth quarter were attributed to maintenance doses as compared to 10% in the third quarter. This correlates with the continued decline in the average doses per patient from 1.8 to 1.5 from the third quarter to the fourth quarter this year. We expect this dynamic to normalize over time with approximately 50% revenue being driven by maintenance doses by the end of 2018. In the fourth quarter and for the year, approximately 20% of U.S. SPINRAZA units were dispensed to our free drug program highlighting our goal that no patient will forego treatment because of financial limitation or an insurance denial in the U.S. We believe U.S. inventory levels for SPINRAZA were relatively flat in the fourth quarter versus the third quarter. And in the U.S. we signed increased discounts allowance for SPINRAZA of a couple of 100 basis points to approximately 16%. We expect this rate to similarly increase over 2018 as we are seeing increasing utilization by Medicaid patients and purchasing from 340B hospitals. In the U.S. over 20% of SPINRAZA patients currently on therapy are over the age of 17 and increased from last quarter. A key strategic priority for us is to activate older patients through expanded patient and physician engagement. Outside the U.S. we more than doubled the number of commercial patients on therapy versus the prior quarter to 990 with approximately 35% of these patients transition from expanded access program or EAP. As a result, approximately 280 patients are still active in EAP as of the end of the fourth quarter. It’s important to note that those patients transitioned from this program may have already completed most of their loading doses. The largest contributors to the ex-U.S. SPINRAZA revenues in Q4 were Germany, Turkey and Japan, which accounted for over two-thirds of the ex-U.S. revenues. We continue to be very encouraged by the up-tick of SPINRAZA outside of the U.S. in terms of country approvals, speed of adoption and penetration levels. In 2018, we expect growth from SPINRAZA in the U.S., but expect a larger portion of the revenue growth to come from outside the U.S. Let me now move on to our biosimilars business, which generate $122 million in revenue this quarter more than doubling year-over-year. Full year biosimilar revenues were $380 million, growing nearly fourfold versus 2016. We anticipate that increased biosimilar competition will result in further price erosion, but we still expect double-digit increases in revenue in 2018. Turning to our anti-CD20 revenues, we recorded $415 million for the fourth quarter, an increase of 31% versus prior year primarily driven by the OCREVUS royalties. Full year anti-CD20 revenues were $1.6 billion, a 19% increase versus 2016. Within anti-CD20 revenues our estimate OCREVUS royalties were $77 million for the fourth quarter and $159 million for the full year. Although we do expect OCREVUS royalty continue to grow, we anticipate total anti-CD20 revenue growth to slow in 2018 versus what we saw in 2017 driven by the anniversarying on the OCREVUS launch in the second quarter of 2018 and the full year impact of a lower profit share percentage for RITUXAN. Total other revenues were $180 million for the fourth quarter, an increase of $129 million versus $51 million recognized in the fourth quarter of 2016, driven by greater contract manufacturing. Other revenues were $360 million for the full year, a 14% increase versus 2016. In 2018, we continue – we expect continued growth in contract manufacturing similar to the growth in full year 2017 but the exact amounts maybe lumpy over the quarters. Let me now turn to gross margin performance. Q4 gross margin was 85% which was negatively impacted by the disproportionate increase in contract manufacturing of biosimilars as well as a write-off of approximately $20 million of ZINBRYTA assets including inventory. Full year gross margin was 87%, slightly lower than in 2016. Q4 R&D expense was 18% of revenue or $588 million. This included $78 million of expense related to Alkermes and $25 million with Ionis due to recently announced business development transactions. Full year GAAP and non-GAAP R&D expense were both 18% of revenue or $2.3 billion. Q4 GAAP SG&A was 17% of revenue or $572 million. Q4 non-GAAP SG&A was also 17% of revenue at $554 million. Full year GAAP SG&A was 16% of sales or $1.9 billion and non-GAAP SG&A was 15% of revenue at $1.9 billion. Both GAAP and non-GAAP SG&A increase versus the prior quarter due to the timing of spend as well as certain investments across sales and marketing, worldwide medical and G&A. We do expect slight relief in core OpEx in the first quarter 2018 with the gradual decline as we move throughout the year. Other net expense, which includes interest, was $66 million in the fourth quarter which was impacted by a $17 million charge to markdown marketable securities as we prepare to move our offshore cash back to the U.S. Other net expense was $250 million for the full year. Our expectations for other net expense in 2018 are lower due to less debt outstanding and higher interest rates on cash balances. In the fourth quarter our GAAP tax rate was approximately 112% as we booked a GAAP charge of $1.2 billion related to the recently enacted U.S. corporate tax reform legislation. In Q4 our non-GAAP tax rate was approximately 29%. Our GAAP and non-GAAP tax rates were impacted by $42 million and $50 million respectively related to the one-time ZINBRYTA charge. For the full year, our GAAP tax rate was approximately 48% and our non-GAAP Tax rate was roughly 25%. In 2018 we expect the underlying run rate for our tax rates to be – benefit by approximately 200 basis points as a result of U.S. tax reform with further benefit in 2019 and beyond. Our weighted average diluted share count was approximate 212 million for the quarter and 230 million for the full year which now brings us the diluted earnings per share. In the fourth quarter we booked the GAAP loss of $1.40 per share and non-GAAP earnings of $5.26 per share. For the full year, GAAP EPS was $11.92 and non-GAAP EPS with $21.81. GAAP EPS declined for Q4 2017 on the year-over-year basis driven by the $5.51 impact of tax reform, the $0.52 impact from our revised Neurimmune agreement, $0.34 impact for the Alkermes and Ionis deals and the $0.43 impact of the ZINBRYTA charge. Full year GAAP EPS decline versus 2016 due to the same factors as well as $1.08 impact from our deal with BMS and $0.48 impact from our deal with Alnylam Pharmaceuticals. Non-GAAP EPS grew 4% for Q4 ‘17 despite the $0.34 impact from the Alkermes and Ionis deals and the 32% impact of ZINBRYTA charge. Non-GAAP EPS grew 8% for the full year 2017 versus prior year, despite the same factors as well as the $1.08 impact from our BMS. We ended the quarter with approximately $6.7 billion of cash and marketable securities. Let me now turn to our full year guidance for 2018. We expect revenues of approximately $12.7 billion to $13 billion which would represent year-over-year growth of 3.5% to 6%. We expect cost of goods sold as a percentage of sales to be consistent with our full-year 2017 cost of goods sold. We anticipate R&D expense between 16% and 17% of sales. Of note guidance does not include any impact from potential acquisitions or large business development transactions as both are hard to predict. We expect SG&A expense to be approximately 15% to 16% of revenues. From a tax perspective, our guidance takes into account the impact of U.S. tax reform and we anticipate our GAAP tax rate for 2018 to be between 23.5% to 24.5% and our non-GAAP tax rate to be between 22.5% and 23.5%. We anticipate full year 2018 GAAP EPS results of $22.20 to $23.20 representing growth of 83% to 91% and non-GAAP EPS to be between $24.20 and $25.20 representing growth of 11% to 16%. From a quarterly perspective we expect non-GAAP EPS growth on year-over-year basis to be stronger in Q2 ‘18 and Q4 ‘18 due to the impact of business development events in 2017 and the factors described above. We believe the midpoint of the guidance ranges we have provided represents a reasonable base case. I will now turn the call over to Michel for his closing comments.

Thanks Jeff. We are excited to have you on the team and I am glad to see that you are quickly coming up to speed on the business. I would like to conclude with these thoughts. When I spoke from the SIT a year ago, I told you we are refocusing the organization, building our new management team and developing a strategy and priorities for both short-term and long-term shareholder value creation. I stated that our actions would speak for themselves. 2017 was a very strong and successful year for Biogen and we delivered on the commitments we have made. For 2018 our goal is to continue this momentum and achieve our guidance. We have a well defined strategy to deliver near-term results and to maximize long-term value. We have an energized world-class executive team and key opportunities in front of us based on the significant unmet medical needs and breakthroughs we are seeing in neuroscience. We believe the risk level neuroscience is fundamentally challenging at this time and we believe Biogen is uniquely positioned to leading the space based on our core capabilities and intense focus. Looking forward to leading the next 12 months to 18 months where we have several meaningful readouts across our neuroscience pipeline including natalizumab stroke BIIB098 in MS, BIIB054 in Parkinson’s disease, BIIB074 for painful lumbosacral radiculopath, BAN2401 in Alzheimer's disease, BIIB067 for ALS and our gene therapy program for XLRS. Before we go into Q&A, I would like to thank our employees around the world who are dedicated to making the positive impacts on patients’ lives and all of the physicians can give us and participants in our clinical development programs. In 2018, Biogen celebrates its 40th anniversary. Our past and future achievements could not be realized without the passion and commitment. With that, we will open the call for questions.

[Operator Instructions] Your first question comes from Michael Yee of Jefferies. Your line is open.

Hey, thanks. Good morning. Congrats on a great quarter. Appreciate the question. Maybe a question for Michel, obviously, you have seen a ton of M&A going on in the space over the last 6 to 12 months and it’s turning up maybe you could just remind us about how you think about your strategic M&A plans and how you think about whether neurology, aware of neurology you could go and whether there are other larger market opportunities outside of neurology that you can look at? How you think about the landscape now? Thanks.

So, I will initiate the answer and then my colleagues will add. Long-term value generation is the strategic focus and we have communicated that. And for that, we said we shipped some of the capital allocation to enrich the pipeline. And I am pleased with what we have done in 2017 and what we have continuing to do in ‘18. I don’t see a frenzy of increase of because of more cash. I see strategic intent, science, scientific rationale first, patents and ordered and financial rigor in order to rationalize any move from the company. We are contemplating early assets, which remains the sweet spot, the sweet spot where we can add tremendous value because of the capability that we have and the focus. We are contemplating larger assets as you can imagine, but I will stop here and I will let Jeff comment, it’s important as the new CFO and Mike from the therapy point of view.

Thanks, Michel. It’s a good question. What I say would be I think we laid out for the investor community at the JPMorgan Conference an illustrative view of how much capacity we have from a capital perspective and that concluded both cash on hand at the end of the second, third quarter rather leverage taking the leverage of the company up to 2x less the leverage we have today plus cash flow for the next 5 years. And if you put all those factors together, I am assuming a flat business, which we obviously don’t expect. We get a $37 billion number, which gives us a lot of capacity to add to the business. And I think our focus is on that – is on growing the business continuing to be active in early stage, but also hopefully being active in mid to late stage assets to bring in things that are closer to revenue. Having said that, we also expect to be able to return cash to shareholders in the form of share repurchase, I think we have ample flexibility for that, but we will be disciplined and we will look for those opportunities that fit strategically, scientifically, that fit with the operations and fit in our core areas. So, we expect this to be active, but disciplined.

The only thing I would add to that, Michael, is just reemphasize that really our approach is a blended one considering pipeline additions and larger opportunities as Jeff said where the strategy and science makes sense and where we really feel that Biogen can track the maximum value.

Our next question comes from Umer Raffat of Evercore. Your line is open.

Hi, thanks so much for taking my question. I wanted to focus on a couple of R&D topics if I may. First on TYSABRI stroke, I am curious your expectations for the 600 mg dose arm on the primary endpoint as well as how you think about the more – the longer time from stroke onset to have the role on the primary endpoint? And then separately, when I look at your slide on readouts for this year, one thing I noticed is your partner Alkermes had mentioned they will have data from the head-to-head study versus TECFIDERA at least for the 100 patients in early 2018 is what they had guided to for the readout over the course of last year. And I was curious if you have that data in-house anything you are seeing from that? Thank you.

Yes, Umer, thanks. Let me take a couple of these here. So, what I would say is starting with the TYSABRI stroke setting, one reason why we are very interested in this study is the fact that we are assessing potential clinical benefit up to 24 hours after the stroke instant. This would obviously be a substantial change to standard of care [indiscernible] out there is for TPA and a thrombolytic really only approved in 4 hours to 5 hours after the stroke. So this would be significant. And we think that it makes sense in terms of the known pathophysiology of acute ischemic stroke where in the period after the infarct you have got this period of intense brain inflammation that’s associated with poor clinical outcomes. And we are testing two different doses or perhaps you were getting at which is to see whether or not there is any dose dependent difference in clinical benefit. First, we will have to wait for the data and as always these are Phase 2 clinical studies and we will have to see what it shows, but where to be positive we think that this would represent a significant advance. On the question on the Alkermes BIIB098 MMF, this is something that which we are still evaluating and what we said is that we do anticipate an ability to file this year. We have not made the determination exactly when data will be presented out of that, but that’s something that we are working through with Alkermes.

Your next question comes from Geoff Meacham of Barclays. Your line is open.

Good morning guys and thanks for the question. Just have a few quick ones, for Jeff is there a tipping point in the biosimilars business that would make the option for the JV more attractive and I am assuming that the status quo is assumed in 2018 guidance. And then for Michel just to ask the bus dev question another way, if you had to choose the priority would it be to diversify pipeline risk say over the longer term or more to augment P&L growth say in the next few years? Thank you.

Okay. Let me start with the biosimilars question. So we were pleased with the performance in the fourth quarter. And as we looked out through next year and there on I think that business is well-positioned. As you pointed we do have an option to buy in more to that business and I think that would be our intent. And then we continue to look at it strategically in terms of what would fit with our core operations going forward.

And concerning your second part of the question we are not on the burning platform, we are doing reasonably well in terms of top line momentum as you can see. Obviously, there is a binary event that we all know and should we find a late stage that is aligned and meets the criteria that were alluded by the team here will be very interested. So, science will be the key driver, the ability to create value that nobody else will be able and alignment to the strategies that we brought in.

Your next question comes from Geoffrey Porges of Leerink. Your line is open.

Thank you very much. And Jeff maybe just a few kind of questions just on the P&L, because your margins certainly bounced around compared to prior periods, first you alluded to the gross margin effect of the high contract manufacturing, should we be modeling that the gross margin is going to so trend in the direction of the Q4 performance going forward, because of the contribution of that in the biosimilars mix to your overall revenue. And then secondly you talked about the SG&A spike in Q4 and that was significantly higher than we had anticipated, could you give us a little bit of color to the contributing factors to that spike and how that might continue going forward as we update our models? Thanks.

Sure. Well, good questions. So first question, gross margins went down Q3 to Q4 from like 88% down to 85%. Two factors drove that, the first was our significant growth in corporate partner revenue, it increased significantly from the third and fourth quarter and that has much lower gross margin. I would say that contributed about two-thirds of the impact of the gross margin erosion sequentially. The other third was the roughly $20 million inventory charge we took at ZINBRYTA. And as we look forward to next year, gross margin quarter-by-quarter although it’s difficult to predict excess and obsolescence charges, we obviously don’t expect that charge to recur per se. And we also expect to have less corporate partner revenue for the quarters for next year and the margin to be slightly better. So both of those things will abate and we expect our margins to kind of get back to the 87% range. So we are pretty comfortable with that by quarter for gross margins. On the question of SG&A, you are correct that the SG&A rate did increase quite a bit sequentially from the third to the fourth quarter. There is really four factors that drove that. One was just basic expenses that ended up moving in from the first quarter of ‘18 to the fourth quarter which were known. The second impact were investments with regard to our SMA business. We are very happy and pleased with the growth, but we are investing in it. The third factor was year end bonus true-ups and other benefit true-ups which were typical the fourth quarter. And then the fourth component were fees and services for projects. So what we think happens here is the rate comes back down as we look at kind of going forward it will kind of – it will get back into kind of the our guidance range. So we think the fourth quarter is a little bit of an aberration and it will settle back down.

Your next question comes from Eric Schmidt of Cowen & Company. Your line is open.

Thanks for all the added transparency on SPINRAZA and some of the other numbers. Maybe for Jeff on SPINRAZA you spoke to faster ex-U.S. growth in 2018, is that going to be a function of existing geographies, putting more patients on the drug or will be driven by more newer territories coming online and when you think about SPINRAZA kind of big picture, could this be a franchise similar to other orphan franchises where maybe as much as two-thirds of the total peak revenue is outside the U.S.? Thanks.

So, I will get started Eric, and then Jeff would come. So we are very pleased with the momentum that we see here, ex-U.S. also in the U.S. where we foresee continuous growth. But you know the most urgent to treat patients, the 70% achievements from the age 0 to 2, somehow is done and now we move into the year the biggest strata. Ex-U.S. a significant opportunity and as Jeff said 70% approximately of the results to-date are generated by three markets. So, we still have a long way to go in terms of reimbursement that we are currently negotiating and also NPP that emerges from geographies that were non-anticipated, so still a long way to go ex-U.S.

Yes. I would just add that we are really pleased with the performance. I think European team has done a really good job and they are poised to kind of do even better in 2018, as we look at the countries, we have got – countries kind of lined up and we expect increased growth from the existing countries as well new countries coming on. So I think that the business is really well-positioned for 2018 in Europe as well as the U.S.

So just to add to that, we are proved in 34 markets, reimbursed in 14 and we still have to 280 patients on early access program.

We are ready for the next question. I want to remind please keep it to one question. I know there is a lot of people in the queue, so please keep it to one question. Thank you.

Your next question comes from Matthew Harrison of Morgan Stanley. Your line is open.

Great, good morning. Thanks for taking the question. I just want to ask on your SMA gene therapy product, what are the steps that you have to take to get that started by the middle of the year and can you talk about potential differentiation versus the existing SMA gene therapy product that’s in the clack? Thanks.

Yes. Thanks. Thanks Matthew. So I mean steps to be taken I think these are lot of the known in standard steps, essentially about trial design, material preparation, site activation, etcetera. So there is – there are no kind of surprises in the steps to get to the clinic here, but things that we consider are also lot of known things. As we are designing this, which are the patient subset, way to delivery, we think a lot about manufacturing. We think a lot about the safety features for these agents, still early days across the space in gene therapy, so we think a lot about that. And all of those can be elements of differentiation. Another thing that we are spending a lot of time contemplating is how we would want to be able to demonstrate clinical benefit and the potential space for a gene therapy where we think there is a lot of opportunity together with SPINRAZA.

Your next question comes from Alethia Young of Credit Suisse. Your line is open.

Hey, guys. Thanks for taking my questions. I guess, just one unrelated to like ALS in the Karyopharm and putting it together of what you are doing with Ionis if you can just talk about kind of the strategic vision there with the ALS opportunity? Thanks.

Yes, Alethia, thanks for the question. So, the Karyopharm compound is pretty interesting one. This is very early, it’s a preclinical, but we will get it to the clinic this year. It’s inhibitor of XPO1. This is a key component of nuclear export and they had done a lot of collaborative work, very nice scientific work showing that this could reduce the hallmark pathology of sporadic ALS, which is the cytoplasmic accumulation of these toxic RNA binding proteins like TDP-43 and FUS, which undergo unclear export that can be blocked at this way. So, the hypothesis is that this could be an oral drug potentially for sporadic ALS. This really complements our ASO programs with Ionis that are really targeting initially genetic forms of ALS like the SOD1 mutant ALS, which is a subset. So, we have got very complementary modalities, completely orthogonal mechanisms and potentially distinct clinical populations.

Your next question comes from the line of Ying Huang from Bank of America/Merrill Lynch. Your line is open.

Hey, good morning. Thanks for the question. Just want to ask one of SPINRAZA U.S. new patient adds, it seems that in 4Q added 420 patients, it’s a step down from 3Q. I was wondering is it because of our seasonality you expected to go back to let’s say 500 per quarter level or what’s the outlook for 2018 new patients out in the U.S.? Thank you.

So, I will get started and Jeff will come in. So, first Q4, there were lot of holidays. Okay, so we need to take that into account and it is expected that the suitable proportion of the later onset has complicated spine and therefore it takes more time to dose those patients. So, this is a trend that we need to get used to even if we work at helping the provider community to dose better with devices etcetera. So, we are come to start out the patients where there is a bit less urgency to treat and some of them have more complicated spine. Jeff will add.

Yes. And the only thing I would add to that, I would agree with that would be just getting the infrastructure up and running the number of sites people trained to kind of handle the increased volume that will take time. So, I think it’s a combination of both getting the more difficult to treat patients and getting the infrastructure ramped up.

The epidemiology is still there. We have 9,000 patients and we still have a long way to go. We increased the team. So, we are getting in there step by step and there is a long queue of patients that are waiting.

Your next question comes from Chris Raymond of Piper Jaffray. Your line is open.

Thanks. I am just on the SPINRAZA discounting and allowances I think that you called out, just doing some quick math on the patients and the dose per patient – doses per patient that you guys callout in your numbers. I don’t really see a step down in the – essentially in the revenue per dose quarter-on-quarter. Can you maybe sort of square that a little bit and talk about what’s really going on with respect to discounting allowances? Thanks.

Yes, I am not sure we are going to be able to do the math real-time for you, it’s fairly complicated, but what we did experience just to reiterate is that we did have a little bit of an uptick in the fourth quarter and discounts and allowances by about a couple of 100 basis points as we sell into more 340B hospitals and the Medicaid mix kind of increases. So that is happening and we expect that to happen into next year, it’s kind of hard to do the math real-time on your numbers, but we can certainly take that offline.

Your next question comes from Robyn Karnauskas of Citigroup. Your line is open.

Hi, guys. Thank you. I was wondering if you could talk a little about how the price increases for MS and FX contributed to your 2018 guidance and then what element is just growth? Thanks.

Okay. So, from a price perspective, I think the people are aware, I will talk to the U.S. first that we took prices up about, little bit more than 8%, some products a little bit less than that in others. So, we expect to get kind of some price drop through. We do expect as we commented the gross to net or discounts in a while just to go up. So, we won’t probably fall through as much as we had historically, but we will still get some kind of pricing increases. Volume will be a little bit pressured in the first half of the year as we complete the anniversarying of the OCREVUS launch after which in the second half volume will come back a little bit more. So, that’s a little bit with regard to the U.S. dynamics. Outside the U.S., we expect to continue to see pretty good growth in unit volume across most of the major European countries. We will have kind of OCREVUS coming in across some of the countries slowly, so there will be a little bit of a headwind. We still expect to grow and then price will maybe be down a little bit across Europe. So, that kind of if you put all that together you get to kind of the low single-digit kind of contraction of the business. And then the factor we have of course is the interferon class is continuing to get again some headwind as a result of people moving away from that class a bit and we are doing our best to kind of stem that. Hopefully, that’s helpful.

Your next question comes from Terence Flynn of Goldman Sachs. Your line is open.

Hi, thanks for taking my question. Maybe just a follow-up on your gene therapy, Mike, you talked about some of the differentiated features, but are you willing at this point to give us anymore details with respect to either the vector you guys are using or the route of delivery and how you are thinking about initial trial designs? Thanks.

Yes, I know, thanks for the question. This is not something that which we are talking about yet. I just want to highlight that these are key elements of our considerations for designing study. And I think it will be a general feature for a lot of AAV base gene therapy efforts. It’s still kind of early days to know this. And like I mentioned, the long-term safety profile and how that relates to route of administration transduction efficiency, patient subtype etcetera is what we are working through and those together with the development paths it might contemplate a position along with SPINRAZA we believe are all potential elements of differentiation.

Our next question comes from Cory Kasimov of JPMorgan. Your line is open.

Hey, good morning guys. Thanks for taking my question. I guess for BIIB089 so formerly ALKS 8700, what type of clinical profile do you need to see relative to TECFIDERA to be confident this product is differentiated and if it ultimately is what are your early thoughts about the potential commercial strategy for that product? Thanks.

Yes, I will start on the clinical side and then see if Michel or Jeff want to jump in on the commercial differentiation and by the way it’s BIIB098 not BIIB089.

Oh, sorry about that.

For those taking notes memorizing. So, look I think the profile here that we are looking at is to see whether or not this is different fumarate pro drug has a different profile in terms of GI tolerability. This is something which we will play out in trial designs in looking at adverse events and ultimately probably will play out in the real world setting. So we are looking at that as kind of a potential clinical differentiator and that will be based on the data that we see. Ultimately the head-to-head comparison may allow us to get a better feeling for that. It may also end up, but this will have to play out in the real world setting.

Yes. As Mike said so the priority is certainly on the better tolerability profile. We did suffer on the GI discontinuation on track even if we did improve a couple of points. There is still a long way go the oral market of the MS TMTs is going much faster than the other segments. So we will be able to expand the big franchise there. And with the longer patent life, this opens plenty of opportunities beyond the priority that we just spoke about.

Our final question comes from Carter Gould of UBS. Your line is open.

Right. Good morning, guys and congrats on a successful 2017. From Michael, just following up on the earlier comments on TYSABRI and stroke, how do you think about the hurdle for potentially moving that into Phase 3 given clearly need, but balanced by the [indiscernible] we have seen with prior assets that had encouraging initial data? Thank you.

Yes. I think it’s a valid point, Carter. I mean this is one of the reasons why we have spent a lot of time really thinking about this. I mean our belief is that just the world has changed in terms of the ability to really conduct and evaluate the stroke to trials and the kinds of quantitative endpoints that you can really apply. And there is a lot of reasons for that I think one macro reasons that people have learned how to conduct is better with the advent of endovascular thrombectomies, trials are actually working now. So there is a lot more refinements just in the execution of these trials and the other thing is that we are looking at this with eyes wide open and the totality of our action one and action two studies. And so based on the data we obtain from action one, we have revised our study design and our endpoint selection. And so we do think that out of this study the data that we will get, we will be able to know whether or not the clinical benefit that we saw across action one and action two whether it’s real or not. And it has to be real for us to take it into the Phase 3.

That was our final question today. I will return the call to our presenters.

So, thank you all for your attention and support to our great company. Thank you. Have a good day.

This concludes today’s conference call. You may now disconnect.