Biogen wields axe again ahead of Leqembi rollout
Biogen has announced another big round of layoffs and cost-cutting, with 1,000 more workers set to lose their jobs after it shed around 900 last year and shelved various R&D programmes.
The new reductions – equivalent to around 11% of its total headcount – will help the company slash its gross operating expenses by around $1 billion out to 2025, with approximately a third of that earmarked for reinvestment in its R&D pipeline.
The measures have been implemented by Biogen's new chief executive Chris Viehbacher, a former CEO of Sanofi who was brought on board at the end of last year to turn around the biotech's fortunes in the wake of its disastrous launch of Aduhelm (aducanumab), its first Eisai-partnered Alzheimer's disease therapy.
Viehbacher said the cost-reduction exercise is a "bottom-up" effort to shift resources to the areas with the greatest opportunity to contribute to the company's growth.
Those include its new Alzheimer's drug Leqembi (lecanemab) – another Eisai-partnered therapy that recently became the first in the anti-amyloid class to get full FDA approval – as well as Qalsody (tofersen), a first-in-class therapy for a specific form of amyotrophic lateral sclerosis.
"While we will be making significant investments in our newly prioritised pipeline and new product launches, we will also need to invest less in other areas which are no longer growing," said Viehbacher. "I believe that Biogen will be better positioned to maximise its growth opportunities going forward."
Therapies that have come under pressure of late include Biogen's multiple sclerosis franchise, which is being hit hard by generic competition after losing patent protection to key products like Tecfidera (dimethyl fumarate) and Tysabri (natalizumab), and spinal muscular atrophy (SMA) treatment Spinraza (nusinersen), which has seen growth stalled by rival therapies entering the market.
The cost-cutting was revealed as Biogen issued its second-quarter results statement, with overall revenues falling 5% to $2.5 billion and MS sales down 15% to $1.3 billion.
Shares in Biogen fell a little over 4% in the wake of the restructuring announcement and financial update, reversing premarket gains, as investors fretted about the company's future prospects, particularly given that sales of Leqembi aren’t expected to ramp up quickly.
Viehbacher has previously intimated that it may be time to withdraw somewhat from Biogen's longstanding focus on neuroscience and invest in other areas, such as immunology, where there is overlap with its MS expertise.
In the quarterly update, Biogen said it is expecting results from a phase 3 trial of UCB-partnered systemic lupus erythematosus (SLE) therapy dapirolizumab pegol next year. It also said the changes to its pipeline were now "substantially complete."