Hemophilia Spin-Off

On February 1, 2017, we completed the spin-off of our hemophilia business, Bioverativ, as an independent, publicly traded company, which was acquired by Sanofi in March 2018. In connection with the spin-off, each Biogen shareholder received one share of Bioverativ common stock for every two shares of Biogen common stock they owned. The separation and distribution was structured to be tax-free for shareholders for federal income tax purposes. Bioverativ assumed all of our rights and obligations under our collaboration agreement with Swedish Orphan Biovitrum AB (Sobi) and our collaboration and license agreement with Sangamo Biosciences Inc.

Biogen and Bioverativ entered into a separation agreement and various other agreements, including a manufacturing and supply agreement, which govern the separation and distribution and the relationship between the two companies going forward. Under the separation agreement, Bioverativ is obligated to indemnify us for liabilities that may exist relating to its business activities, whether incurred prior to or after the distribution, including any pending or future litigation.

In connection with the distribution we made a net cash contribution to Bioverativ, during the first quarter of 2017, totaling $302.7 million. The following table summarizes the assets and liabilities that were charged against equity as a result of the spin-off of our hemophilia business:



(In millions)
Assets
Cash	$	302.7
Accounts receivable	144.7
Inventory	116.1
Property, plant and equipment, net	20.2
Intangible assets, net	56.8
Goodwill	314.1
Other, net	53.7
Assets transferred, net	$	1,008.3

Liabilities
Accrued expenses and other current liabilities	$	87.8
Other long-term liabilities	67.7
Liabilities transferred, net	$	155.5

Pursuant to the terms of our agreements with Bioverativ, upon completion of the spin-off, we distributed ALPROLIX and ELOCTATE on behalf of Bioverativ until Bioverativ obtained appropriate regulatory authorizations in certain countries, including a Biologics License Application transfer in the U.S., which was received in September 2017. Accordingly, commencing October 2017, we ceased distribution of ALPROLIX and ELOCTATE on behalf of Bioverativ under this arrangement.

Under the manufacturing and supply agreement, we manufacture and supply certain products and materials to Bioverativ. The manufacturing and supply agreement has an initial term of five years, with a five-year extension at Bioverativ's sole discretion and a further five-year extension with Bioverativ's and our consent. For the years ended December 31, 2018 and 2017, we recognized $206.7 million and $64.8 million, respectively, in revenues in relation to contract manufacturing services provided to Bioverativ, which is reflected as a component of other royalty and corporate revenues in our consolidated statements of income. We also recorded $180.4 million and $15.1 million as cost of sales in relation to these services during the years ended December 31, 2018 and 2017, respectively. Additionally, pursuant to the terms of the manufacture and supply agreement, we expect to sell substantially all remaining hemophilia related inventory to Bioverativ during the first quarter of 2019, when Bioverativ will assume full control over its manufacturing processes. Hemophilia related inventory on hand as of December 31, 2018, totals approximately $180.0 million.

Amounts earned under the non-manufacturing and supply related transaction service agreements are recorded as a reduction of costs and expenses in their respective expense line items. These amounts, which were primarily reflected as a reduction to selling, general and administrative expenses in our consolidated statements of income, were not significant for the years ended December 31, 2018 and 2017.

Hemophilia related product revenues reflected in our consolidated statements of income for the years ended December 31, 2017 and 2016, totaled $74.4 million and $846.9 million, respectively. Results for the year ended December 31, 2017, only reflect hemophilia-related product revenues through January 31, 2017.

Patents

Prior to the spin-off of our hemophilia business, we were awarded various methods of treatment and composition of matter patents related to ELOCTATE and ALPROLIX. Upon completion of the spin-off, these patents were transferred to the patent portfolio of Bioverativ.