USA — Biogen has laid off an undisclosed number of employees, including members of its multiple sclerosis (MS) team, as part of a plan to optimize business strategies and align cost and revenue.
According to a company spokesperson, impacted employees will be eligible for severance packages and support services as they transition out of the company, or they may have the opportunity to apply for another role within Biogen.
The layoffs are part of a larger workforce reduction strategy that Biogen had initiated in 2022, which had originally aimed to terminate up to 1,000 employees.
The cost-saving measures were intended to aid the company in recovering losses stemming from the launch of its controversial Alzheimer’s drug, Aduhelm.
Despite initially receiving approval from the US Food and Drug Administration (FDA), the drug was met with criticism from healthcare experts, who raised concerns about its efficacy and steep price tag.
In the face of mounting pressure, Biogen had to scale back its revenue expectations for Aduhelm, which put a considerable strain on its financial outlook.
As such, the decision to implement workforce reductions was likely an attempt to streamline the company’s operations and adjust to the changing market conditions.
One notable impact of the current cuts was the departure of Matthew Winton, who served as the senior vice president and head of Biogen’s US Multiple Sclerosis (MS) franchise for more than two years.
While the company’s MS drugs have been the source of most of its revenue, which amounted to US$5.4 billion last year, the revenue has started to decline due to increasing competition from generic drugs.
Tysabri (natalizumab) is one of Biogen’s most successful MS drugs, accounting for more than US$2.3 billion in sales last year.
Since its approval in 2004, Tysabri has been a key asset for the company. This monoclonal antibody works by binding to T cells, which can cause nerve damage in the brain and spinal cord, thereby preventing them from attacking these areas, which is a hallmark of MS.
Another MS drug from Biogen is Tecfidera (dimethyl fumarate), which acts as an activator of the nuclear factor erythroid 2–related factor 2 (Nrf2) pathway and was approved in 2013.
Tecfidera brought in more than US$1.4 billion in sales for Biogen in 2022, making it the company’s second-highest-selling MS asset.
The US Supreme Court refused to hear Biogen’s appeal last October to reinstate a patent on its MS drug Tecfidera (dimethyl fumarate) in a dispute with Viatris subsidiary Mylan Pharmaceuticals.
Biogen’s MS franchise also includes Vumerity (diroximel fumarate), an oral drug based on fumarates, interferon medicines such as Avonex (interferon beta-1a), and Plegridy (peginterferon beta-1a), as well as Fampyra (fampridine), an oral drug marketed as Ampyra in the U.S. by Acorda Therapeutics.
The decline in revenue from MS drugs could be one of the reasons why Biogen is pursuing new strategic directions, including the development and commercialization of Aduhelm.
During Biogen’s earnings call in February, the company’s newly appointed CEO Christopher Viehbacher suggested that further job cuts were in the cards.
Despite the fact that Biogen’s MS drugs remain the company’s primary source of income, Viehbacher acknowledged that this revenue stream was in decline.
He went on to explain that the company was instead focusing on “near-term opportunities” like Leqembi, a drug for Alzheimer’s disease, and zuranolone, a drug for depression.
Additionally, Biogen plans to expand its revenue base through strategic partnerships. By pursuing these opportunities, Viehbacher hopes that Biogen will be able to achieve sustained revenue growth in the future.
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