Collaboration, License and Other Arrangements

12 Months Ended

Dec. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration, License and Other Arrangements

Collaboration, License and Other Arrangements

Acquired In-Process Research and Development

We have entered into numerous business development agreements with third parties to collaborate on research,

development and commercialization programs, license technologies, or acquire assets. Our AIPR&D included $133.0 million,

$4.6 billion and $527.1 million in 2025, 2024 and 2023, respectively, related to upfront, contingent milestone, or other

payments pursuant to our business development transactions. In 2024, our AIPR&D included $4.4 billion associated with our

acquisition of Alpine Immune Sciences, Inc. (“Alpine”) as discussed below.

Asset Acquisitions

Alpine Immune Sciences, Inc. - povetacicept

On May 20, 2024, we acquired all of the issued and outstanding shares of common stock of Alpine, a publicly traded

biotechnology company focused on discovering and developing innovative, protein-based immunotherapies for

approximately $5.0 billion. We funded the Alpine acquisition with our cash and cash equivalents.

Alpine’s lead molecule, povetacicept, is a dual inhibitor of B cell activating factor (“BAFF”) and a proliferation-inducing

ligand (“APRIL”) pathways. As of the acquisition date, povetacicept was in Phase 2 development and had shown potential

best-in-class efficacy in IgAN, a serious progressive, life-threatening kidney disease that often progresses to end-stage-renal

disease. Due to its mechanism of action as a dual BAFF/APRIL inhibitor, povetacicept also holds the potential to benefit

patients with multiple diseases, such as pMN and generalized myasthenia gravis. We accounted for the Alpine transaction as

an asset acquisition because povetacicept represented substantially all of the fair value of the gross assets that we acquired.

As a result, $4.4 billion of fair value attributed to povetacicept was expensed to AIPR&D in 2024.

We paid total cash of $5.0 billion at the acquisition date, which included $4.8 billion to acquire Alpine and

$197.6 million for cash-settled unvested Alpine equity awards. The $197.6 million represented post-acquisition expense,

which was recorded as $165.0 million of “Research and development expenses” and $32.6 million of “Selling, general and

administrative expenses.”

The total cash paid to acquire Alpine, allocation of consideration to the assets acquired and liabilities assumed and

AIPR&D was as follows:

	(in millions)
Cash consideration to acquire Alpine’s outstanding common stock	$4,536.9
Cash consideration for Alpine’s vested and unvested equity awards	420.6
Total cash consideration paid to Alpine	4,957.5
Less: Expense related to unvested equity awards	(197.6)
Transaction costs	40.7
Total consideration allocated	$4,800.6
Cash and cash equivalents	$31.9
Current marketable securities	209.5
Long-term marketable securities	48.5
Deferred tax asset	105.5
Total other assets	19.5
Total liabilities	(37.5)
Total identifiable assets acquired, net	377.4
Acquired in-process research and development expense	4,423.2
Total consideration allocated	$4,800.6

In-license Agreements

We have entered into several in-license agreements to advance and obtain access to technologies and services related to

our research and early-development activities. We are generally required to make an upfront payment upon execution of our

license agreements; development, regulatory and commercialization milestones payments upon the achievement of certain

product research, development and commercialization objectives; and royalty payments on future sales, if any, of commercial

products resulting from our collaborations.

Pursuant to the terms of our in-license agreements, our collaborators typically lead the discovery efforts and we lead all

preclinical, development and commercialization activities associated with the advancement of any product candidates and

fund all expenses.

We typically can terminate our in-license agreements by providing advance notice to our collaborators. Our license

agreements may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless

earlier terminated, these license agreements generally remain in effect until the date on which the royalty term and all

payment obligations with respect to all products in all countries have expired.

CRISPR Therapeutics AG

CRISPR-Cas9 Gene-editing Therapies Agreements

In 2015, we entered into a strategic collaboration, option and license agreement (the “CRISPR Agreement”) with

CRISPR and its affiliates to collaborate on the discovery and development of potential new treatments aimed at the

underlying genetic causes of human diseases using CRISPR-Cas9 gene-editing technology. We had the exclusive right to

license certain targets. In 2019, we elected to exclusively license three targets, including CF, pursuant to the CRISPR

Agreement. For each of the three targets that we elected to license, CRISPR has the potential to receive up to an additional

$410.0 million in development, regulatory and commercial milestones as well as royalties on resulting net product sales.

In 2017, we entered into a joint development and commercialization agreement with CRISPR (the “CRISPR JDCA”),

which we amended and restated in 2021, pursuant to the terms of the CRISPR Agreement. Under the CRISPR JDCA, we and

CRISPR were co-developing and preparing to co-commercialize CASGEVY for the treatment of hemoglobinopathies,

including treatments for SCD and TDT.

Pursuant to the CRISPR JDCA, we lead global development, manufacturing and commercialization of CASGEVY, with

support from CRISPR. We also conduct all research, development, manufacturing and commercialization activities relating

to other product candidates and products under the CRISPR JDCA throughout the world subject to CRISPR’s reserved right

to conduct certain activities.

CASGEVY was approved by the FDA in December 2023 for the treatment of SCD. In connection with this approval, we

made a $200.0 million milestone payment to CRISPR in January 2024. Please refer to Note J, “Goodwill and Other

Intangible Assets,” for further information. Subsequent to receiving marketing approval for CASGEVY, we continue to lead

the research and development activities under the CRISPR JDCA, subject to CRISPR’s reserved right to conduct certain

activities. We are reimbursed by CRISPR for its 40% share of these research and development activities, subject to certain

adjustments, and we record this reimbursement from CRISPR as a credit within “Research and development expenses.” We

also share with CRISPR 40% of the net commercial profits or losses incurred with respect to CASGEVY, subject to certain

adjustments, which is recorded to “Cost of sales.” The net commercial profits or losses equal the sum of the product

revenues, cost of sales and selling, general and administrative expenses that we have recognized related to the CRISPR

JDCA. In 2025 and 2024, we recognized net reimbursements from CRISPR pursuant to the CRISPR JDCA as credits to

“Cost of sales” of $146.8 million and $73.5 million, respectively, related to CRISPR’s share of the CRISPR JDCA’s net

commercial loss, and to “Research and development expenses” of $62.2 million and $31.6 million, respectively, related to

CRISPR’s share of the CRISPR JDCA’s research and development activities.

During 2025, we received $12.5 million from CRISPR, pursuant to the CRISPR JDCA, for its share of our upfront

payment paid to Orna Therapeutics in December 2024, which we recorded as a credit to AIPR&D in 2025.

Prior to receiving marketing approval from the FDA for CASGEVY in December 2023, we accounted for the CRISPR

JDCA as a cost-sharing arrangement, with costs incurred related to CASGEVY allocated 60% to us and 40% to CRISPR,

subject to certain adjustments. In 2023, we recognized net reimbursements from CRISPR as credits to “Research and

development expenses” of $61.9 million to “Selling, general and administrative expenses” of $32.0 million, related to

CRISPR’s share of the CRISPR JDCA’s operating expenses.

CRISPR-Cas9 Gene-editing Hypoimmune Cell Therapies Agreement

In 2023, we entered into a non-exclusive license agreement (the “CRISPR T1D Agreement”) for the use of CRISPR’s

CRISPR-Cas9 gene-editing technology to accelerate the development of our hypoimmune cell therapies for T1D. Pursuant to

the CRISPR T1D Agreement, we made a $100.0 million upfront payment to CRISPR, and we determined that substantially

all the fair value of our upfront payment was attributable to in-process research and development, for which there is no

alternative future use, and that no substantive processes were acquired that would constitute a business. In the second quarter

of 2023, we achieved a research milestone that resulted in a $70.0 million payment to CRISPR. We recorded the upfront

payment and the research milestone, totaling $170.0 million, to AIPR&D in 2023. In 2024, we achieved additional research

milestones totaling $35.0 million, which were recorded to AIPR&D. CRISPR is eligible to receive up to an additional

$125.0 million in research, development, regulatory and commercial milestones, as well as royalties on resulting net product

sales.

Entrada Therapeutics, Inc.

In 2023, we entered into a strategic collaboration and license agreement (the “Entrada Agreement”) with Entrada

Therapeutics, Inc. (“Entrada”) focused on discovering and developing intracellular therapeutics for DM1. Upon closing, we

made an upfront payment of $225.1 million to Entrada, and purchased $24.9 million of Entrada’s common stock in

connection with the Entrada Agreement. We determined that substantially all the fair value of our upfront payment was

attributable to in-process research and development, for which there was no alternative future use, and that no substantive

processes were acquired that would constitute a business. In 2024 and 2023, Entrada also earned milestones of $75.0 million

and $17.5 million, respectively. As a result, we recorded $75.0 million and $242.6 million in total to AIPR&D in 2024 and

2023, respectively. We recorded the investment in Entrada’s common stock at fair value on our consolidated balance sheet

within “Marketable securities.” Entrada is eligible to receive up to an additional $335.0 million in development, regulatory

and commercial milestones for any products that may result from the Entrada Agreement, as well as royalties on resulting net

product sales.

Moderna, Inc.

In 2016, we entered into a strategic collaboration and licensing agreement with Moderna, Inc. (“Moderna”), pursuant to

which the parties are seeking to identify and develop messenger ribonucleic acid (“mRNA”) therapeutics encoding cystic

fibrosis transmembrane conductance regulator for the treatment of CF. Moderna is eligible to receive up to $270.0 million in

development and regulatory milestones as well as royalties on net product sales related to this agreement.

Additional In-License Agreements and Other Arrangements

In addition to the agreements described above, we recorded upfront, option and milestone payments totaling $145.5

million in 2025, $95.2 million in 2024 and $114.5 million in 2023 to AIPR&D related to additional in-license agreements and

other business development transactions that we do not consider to be individually significant to our consolidated financial

statements. For each of these transactions, we determined that substantially all the fair value of the consideration for each

individual agreement was attributable to in-process research and development, for which we did not have any alternative

future use, and no substantive processes were acquired that would constitute a business.

Please refer to Note D, “Fair Value Measurements,” and Note E, “Marketable Securities and Equity Investments,” for

further information regarding our investments in our collaborators.

Out-license Agreements

We have entered into licensing agreements pursuant to which we have out-licensed rights to certain product candidates to

third-party collaborators. Pursuant to these out-license agreements, our collaborators may become responsible for all costs

related to the continued development of such product candidates and obtain development and commercialization rights to

these product candidates, either globally or within certain geographic regions. Depending on the terms of the agreements, our

collaborators may be required to make upfront payments, milestone payments upon the achievement of certain product

research, development and regulatory objectives and may also be required to pay royalties on future sales, if any, of

commercial products resulting from the collaboration. The termination provisions associated with these collaborations are

generally the same as those described above related to our in-license agreements.

Zai Lab Limited

In January 2025, we entered into an agreement with Zai for the development and commercialization of povetacicept for

mainland China, Hong Kong SAR, Macau SAR, Taiwan region, and Singapore. Under the agreement, Zai will help advance

the povetacicept clinical trials and will be responsible for obtaining marketing authorizations in the licensed territories. Zai

will also be responsible for commercialization activities in the licensed territories, if povetacicept becomes an approved

product. Under the terms of the agreement, we received a $10.0 million upfront payment in the first quarter of 2025, which

was recorded as “Other revenues.” We are eligible to receive from Zai certain milestone payments and tiered royalties on

future net sales of povetacicept in the region of focus.

Ono Pharmaceuticals Co., Ltd.

In June 2025, we entered into an agreement with Ono for the development and commercialization of povetacicept for

Japan and South Korea. Under the agreement, Ono will help advance the povetacicept clinical trials and will be responsible

for obtaining marketing authorizations in Japan and South Korea. Ono will also be responsible for commercialization

activities in Japan and South Korea, if povetacicept becomes an approved product. Under the terms of the agreement, we

received a $20.6 million upfront payment in the second quarter of 2025, which was recorded as “Other revenues.” We are

eligible to receive from Ono certain milestone payments and tiered royalties on future net sales of povetacicept in Japan and

South Korea.

Cystic Fibrosis Foundation

In 2004, we entered into an agreement (the “CFF Agreement”) with the Cystic Fibrosis Foundation (the “CFF”), as

successor in interest to the Cystic Fibrosis Foundation Therapeutics, Inc., to support research and development activities.

Pursuant to the CFF Agreement, as amended, we have agreed to pay tiered royalties ranging from single digits to sub-teens

on covered compounds first synthesized and/or tested during a research term on or before February 28, 2014, including

ivacaftor, lumacaftor and tezacaftor, and royalties ranging from low-single digits to mid-single digits on net sales of certain

compounds first synthesized and/or tested between March 1, 2014 and August 31, 2016, including elexacaftor. We do not

have any royalty obligations on compounds first synthesized and tested on or after September 1, 2016. For combination

products, such as ORKAMBI, SYMDEKO/SYMKEVI, TRIKAFTA/KAFTRIO, and ALYFTREK, sales are allocated

equally to each of the active pharmaceutical ingredients in the combination product, and royalties are then paid for any

royalty-bearing components included in the combination. We record expenses related to these royalty obligations to “Cost of

sales.”