Posted on over 1 year ago by Gerry Kennedy
Biogen ($BIIB) is laying off 11% of its workforce and pulling the plug on a handful of pipeline projects, cutting deep into its infrastructure amid mounting pressure and turning its attention to some high-risk R&D programs.
Biogen CEO George Scangos
The plan is to do away with about 830 jobs by the end of 2015, Biogen said, an effort designed to save roughly $250 million in 2016 and beyond. Biogen is now "in the process of notifying employees" who are losing their jobs, the company said. The decision "was extremely difficult," CEO George Scangos said in a statement, "but we believe these actions are necessary to fulfill our mission of bringing important new medicines to patients."
On the pipeline side, Biogen is walking away from its plans to develop the oral multiple sclerosis drug Tecfidera for the secondary-progressive form of the disease, cutting a Phase II lupus program targeting the TWEAK immune cell, and discontinuing some preclinical projects in immunology and fibrosis research, the company said. Biogen is also abandoning its ambitions of getting the injectable drug Tysabri approved for secondary-progressive MS after reporting negative Phase III results Wednesday.
The sweeping cuts follow months of scrutiny tied to Biogen's MS franchise, perceived by analysts to be underperforming. The company is facing more and more competition in its home territory as new oral and injectable therapies hit the market, and a handful of R&D setbacks over the last year has intensified questions about Biogen's strategy for future growth.
The answer, on the R&D side, is Alzheimer's disease. With that $250 million in savings, Biogen is planning to pour funds into three risky programs in one of biopharma's most woebegone fields of development. Leading the way is aducanumab, a Phase III beta-amyloid antibody that went through the hype-and-letdown cycle before even entering late-stage development. Behind that is BAN2401, a Phase II antibody with the same target, and E2609, a BACE inhibitor also in midstage development. All three are partnered with Japanese drugmaker Eisai.
Each is a high-stakes gambit, as the recent history of Alzheimer's R&D is littered with once-promising therapies that bombed out in Phase III, leading to multibillion-dollar write-offs for their inventors. But a new, disease-modifying drug for Alzheimer's is nearly guaranteed peak sales north of $10 billion a year, analysts have said, and Biogen is staking its future on that potential.
Outside of Alzheimer's, the company is pressing forward with an Isis Pharmaceuticals ($ISIS)-partnered treatment for spinal muscular atrophy, now in Phase III; a next-generation MS therapy under Phase II study; a Phase III-ready drug for inflammatory bowel disease; and a late-stage asset for the rare nerve disorder trigeminal neuralgia.