USA —In a bid to navigate turbulent waters and reignite growth, Biogen Inc, a U.S. drugmaker, is set to slash around 1,000 jobs, constituting 11% of its workforce.
The move comes as part of a cost-cutting initiative, driven by the company’s ambition to regain growth and solidify its position in the pharmaceutical industry.
Acknowledging elevated costs compared to its competitors, Biogen aims to redirect its focus towards higher-growth products, particularly the newly approved Alzheimer’s drug, Leqembi, which it collaborates on with partner Eisai.
CEO Christopher Viehbacher addressed the recent challenges faced by the company, noting a reversal of fortunes in some of its products after prosperous times in its more recent history.
Specifically, Biogen has been grappling with a decline in sales of its multiple sclerosis treatment, Tecfidera, due to intensified competition from more affordable generic alternatives.
Additionally, the future of its spinal muscular atrophy drug, Spinraza, appears uncertain in the face of rival drugs offered by pharmaceutical giants Novartis and Roche.
Viehbacher, a former Sanofi CEO hired in November to lead Biogen, is determined to steer the biotech firm back to a trajectory of growth and success, aiming to rectify past missteps surrounding the controversial Alzheimer’s drug, Aduhelm.
Analysts recognize the complexity of the CEO’s task, as cost-cutting alone may not guarantee a path to growth, emphasizing the need for a thorough assessment of all operations during Biogen’s evolution.
The company intends to reinvest part of the cost cuts, approximately US$300 million, into drug launches and research and development, reinforcing its commitment to innovation and therapeutic advancements.
Excluding reinvestment, Biogen aims to achieve a net reduction of about US$700 million in operating expenses by 2025.
Leqembi, the recently FDA-approved Alzheimer’s drug, holds significant promise for Biogen’s future growth.
While it gained standard approval, granting wider insurance coverage, concerns over potential brain swelling risks, common among drugs in the same class, have been flagged.
Viehbacher emphasizes the importance of educating both patients and commercial insurers about safety protocols to ensure appropriate usage.
As Biogen focuses on Leqembi’s launch, the company is also collaborating with Eisai on an injectable version of the drug.
The development of this version could potentially lead to the drug being administered outside specialized infusion centers, allowing for future home administration.
Regulatory filings for this version of Leqembi are expected to be completed by the end of the first quarter of 2024.
Despite the challenges, Biogen remains optimistic about its future prospects, projecting a return to growth over the next three years without the necessity for additional deals.
With a substantial cash balance of US$7.3 billion at the end of the year, the company is well-positioned to capitalize on its current pipeline, enabling a selective approach to potential strategic collaborations.
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