Intangible Assets and Goodwill

Intangible Assets

Intangible assets, net of accumulated amortization, impairment charges and adjustments, are summarized as follows:



		As of June 30, 2018							As of December 31, 2017
(In millions)	Estimated Life	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Out-licensed patents	13-23 years	$	543.3	$	(539.9	)	$	3.4	$	543.3	$	(535.6	)	$	7.7
Developed technology	15-23 years	3,005.3		(2,713.1		)	292.2		3,005.3		(2,689.0		)	316.3
In-process research and development	Indefinite until commercialization	670.5		—			670.5		680.6		—			680.6
Trademarks and tradenames	Indefinite	64.0		—			64.0		64.0		—			64.0
Acquired and in-licensed rights and patents	4-18 years	3,974.2		(1,343.0		)	2,631.2		3,971.4		(1,160.4		)	2,811.0
Total intangible assets		$	8,257.3	$	(4,596.0	)	$	3,661.3	$	8,264.6	$	(4,385.0	)	$	3,879.6

For the three and six months ended June 30, 2018, amortization of acquired intangible assets totaled $107.4 million and $211.3 million, respectively, compared to $117.5 million and $566.0 million, respectively, in the prior year comparative periods. For the six months ended June 30, 2018, compared to the same period in 2017, the decrease in amortization of acquired intangible assets was primarily due to the prior year impairment charge related to our U.S. and rest of world licenses to Forward Pharma A/S's (Forward Pharma) intellectual property, including Forward Pharma's intellectual property related to TECFIDERA, as discussed below.

Developed Technology

Developed technology primarily relates to our AVONEX product, which was recorded in connection with the merger of Biogen, Inc. and IDEC Pharmaceuticals Corporation in 2003. The net book value of this asset as of June 30, 2018, was $285.8 million.

Acquired and In-licensed Rights and Patents

Acquired and in-licensed rights and patents primarily relate to our acquisition of all remaining rights to TYSABRI from Elan Corporation plc and our U.S. and rest of world licenses to Forward Pharma's intellectual property, including Forward Pharma's intellectual property related to TECFIDERA. The net book values of the TYSABRI and TECFIDERA assets as of June 30, 2018, were $2,120.8 million and $291.4 million, respectively.

TECFIDERA License Rights

In January 2017 we entered into a settlement and license agreement among Biogen Swiss Manufacturing GmbH, Biogen International Holding Ltd., Forward Pharma and certain related parties, which was effective as of February 1, 2017. Pursuant to this agreement, we obtained U.S. and rest of world licenses to Forward Pharma's intellectual property, including Forward Pharma's intellectual property related to TECFIDERA. In exchange, we paid Forward Pharma $1.25 billion in cash.

We have two intellectual property disputes with Forward Pharma, one in the U.S. and one in the E.U., concerning intellectual property related to TECFIDERA.

In March 2017 the U.S. intellectual property dispute was decided in our favor. Forward Pharma appealed to the U.S. Court of Appeals for the Federal Circuit and the appeal is pending. We evaluated the recoverability of the U.S. asset acquired from Forward Pharma and recorded an impairment charge in the first quarter of 2017 to adjust the carrying value of the acquired U.S. asset to fair value reflecting the impact of the developments in the U.S. legal dispute.

In March 2018 the European Patent Office (EPO) issued its decision revoking Forward Pharma's European Patent No. 2 801 355. Forward Pharma has filed an appeal to the Technical Board of Appeal of the EPO and the appeal is pending.

Based upon our assessment of these rulings, we continue to amortize the remaining net book value of the U.S. and rest of world intangible assets in our condensed consolidated statements of income utilizing an economic consumption model.

For additional information on these disputes, please read Note 21, Litigation, to our consolidated financial statements included in our 2017 Form 10-K.

Estimated Future Amortization of Intangible Assets

Our amortization expense is based on the economic consumption and impairment of intangible assets. Our most significant intangible assets are related to our TECFIDERA, AVONEX and TYSABRI products. Annually, during our long-range planning cycle, we perform an analysis of anticipated lifetime revenues of our TECFIDERA, AVONEX and TYSABRI products. This analysis is also updated whenever events or changes in circumstances would significantly affect the anticipated lifetime revenues of any of these products.

Our most recent long-range planning cycle was completed in the third quarter of 2017. Based upon this analysis, the estimated future amortization of acquired intangible assets for the next five years is expected to be as follows:



(In millions)	As of June 30, 2018
2018 (remaining six months)	$	215.8
2019	402.6
2020	380.9
2021	255.0
2022	242.3
2023	211.2

Goodwill

The following table provides a roll forward of the changes in our goodwill balance:



(In millions)	As of June 30, 2018
Goodwill, beginning of period	$	4,632.5
Increase to goodwill	540.9
Other	(3.1		)
Goodwill, end of period	$	5,170.3

The increase in goodwill during the six months ended June 30, 2018, was related to $600.0 million in contingent milestones achieved (exclusive of $59.1 million in tax benefits) and payable to the former shareholders of Fumapharm AG or holders of their rights.

For additional information on future contingent payments to the former shareholders of Fumapharm AG or holders of their rights, please read Note 22, Commitments and Contingencies, to our consolidated financial statements included in our 2017 Form 10-K.

Other includes changes in foreign currency exchange rate fluctuations. As of June 30, 2018, we had no accumulated impairment losses related to goodwill.