Analyst Conference Summary

conference date: October 23, 2007 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2007 (3rd quarter)

Forward-looking statements

Overview: Not a great quarter, with revenues up but earnings down due to high R&D expenses.

Basic data:

Revenues were $789 million, up 2% sequentially from $773 and up 12% from $703 million year-earlier.

Net income was $119 million, 36% sequentially from $186, and down 24% from $157 million year-earlier.

EPS (earnings per share) were $0.41, down 24% sequentially from $0.54 and down 9% from $0.45 year-earlier.

Guidance:

Full year 2007 guidance was reiterated: revenue growth of 16% to 18% over 2006; R&D to be 28% to 30% of revenue; non-GAAP EPS of $2.60 to $2.70; capital expenditures between $250 and $300 million. GAAP EPS of $1.84 to $1.94.

Conference Highlights:

Avonex sales were weak in August, but rebounded in September. Goal through 2010 is to grow revenue by 15% annually and earnings by 20% annually.

Non-GAAP nmbers were: net income of $170 million, or $0.58 EPS, down from $207 million year-earlier.

Avonex sales were up 2% (from year-earlier) to $455 million. 135,000 patients globally.

Rituxan revenues (from joint venture) were up 15% to $235 million.

Tysabri revenues (from joing venture) were $63 million. $28 million was from Elan sales in the U.S. and $35 million was sold by Biogen Idec outside the U.S. 17,000 patients at end of quarter include: US 10,500; EU 5,500; plus about 1000 in clinical trials. They expect to have 100,000 Tysabri patients by the end of 2010. No new reports of PML (side effect). New nations are coming on line.

Fumaderm revenues were $7 million, up from $5 million in Q2.

Royalty revenues were $24 million, up 9% from $22 million year-earlier.

Both GAAP and non-GAAP income were impacted by a $50 million R&D expense for an upfront license from Cardiokine.

No shares were repurchased in the quarter.

During the quarter the Gastrointestinal Drugs Advisory Committee of the FDA voted 12-3-2 to recommend approval of Tysabri for moderate-to-severe Crohn's disease (after available therapies have failed). Expect action in January 2008. Phase II studies of Adentri had good results.

Of course there is a possible acquisition of Biogen underway. Believes even if stays as a stand-alone company there is good value for shareholders. No guarantee of an acquisition.

Slide 8 accompanying the conference showed a pretty vast and impressive pipeline of potential thepies. 15 products in Phase II or beyond.

Cost of sales was $81.6 million; R&D $286.3 million, SG&A $190.6 million, amortization $65.7 million, acquired R&D $30.0 million. Leaving income from operations at $129.2 million. Other incomewas $44.9 million. Tax provision was $54.7 million.

Q&A:

Tysabri patient numbers? We see new patients both in TOUCH centers and other. Physicians use product more once they start using it. European numbers are sketchy, but expect growth to continue there.

Avonex market share? Remains in leadership position throughout the year.

Slow Q3, guidance for Q4? Expect acceleration over Q3 with pickup in Tysabri.

Confidence in Avonex trends? Expectation in U.S. is flat to slightly down. Increasing internationally because we are adding new national markets. Believes generics will have problem getting to market because there are still patent hurdles.

PML incidents? Do expect to see more PML incidents.

4 of 5 Tysabri patients come from non-Biogen products.

Manufacturing capacity? Has large scale capacity in North Carolina. Also has a facility in Cambridge. Danish facility to come online in 2009.

100,000 projection inflection point? Believes will be due to increasing modest acceleration. Fear of PML issue depends on whether data shows risk includes with prolonged exposure.

Rituxan, if change of control, could go to Genentech issue? If change of control, rates for royalties are undisclosed and confidential.

European reimbursements? Each nation has a separate reimbursement policy and has to be negotiated, which slows the overall rollout down.

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