In the largest round of biotech cuts so far this year, Biogen on Tuesday announced plans to lay off 1,000 employees, or roughly 11% of its workforce, as part of a cost-saving plan that also includes an overhaul of its R&D pipeline.
The move is the latest in a string of downsizing efforts across the biopharma industry this year as large and small companies batten the hatches amid ongoing market challenges.
Late last month, Intercept Pharmaceuticals slashed a third of its workforce after receiving a complete response letter from the FDA for its nonalcoholic steatohepatitis (NASH) drug obeticholic acid. In a similar vein, the once-hopeful COVID-19 vaccine contender Novavax cut 25% of staff in May as its chances of cornering a sector of the market dwindled.
Industry layoffs in 2023
Amgen eliminated 750 positions earlier this year, citing drug pricing and inflationary pressures. And other large drugmakers, from Bristol Myers Squibb to Takeda to Novo Nordisk each have slimmed down in one way or another.
Biogen laid out its restructuring plan after revealing to investors on a second-quarter earnings call that revenue declined 5% year over year, with another drop expected next year.
CEO Chris Viehbacher described the new approach as a “complete redesign of Biogen.”
“We’ve had five different heads of R&D in 10 years,” Viehbacher said on the call. “As a result, we ended up with some products that I think were relatively high risk and high cost and not necessarily the highest value.”
Biogen’s new path
Positions will be eliminated as part of cost-saving measures, representing roughly 11% of Biogen’s workforce.
Decrease in Biogen’s revenue year-over-year for the second quarter of 2023.
Expected operating savings by 2025 from the company’s cost-saving program.
Planned investment in new product launches and R&D programs.
Since taking the helm of the biotech late last year, Viehbacher has attempted to set the company on the right course after it faced numerous setbacks related to the Alzheimer’s treatment Aduhelm. Part of the redesign now involves the company’s new Alzheimer’s drug Leqembi, which it developed in partnership with Eisai.
Moving forward, he also said the company plans to expand its rare disease, immunology and psychiatry pipelines including a phase 3 monoclonal antibody for systemic lupus erythematosus and a phase 1 treatment for the rare neurodevelopmental Angelman syndrome.
And the Cambridge, Mass., biotech is preparing for upcoming milestones, including an imminent FDA decision Viehbacher said could come “potentially next week” for zuranolone, a treatment developed in partnership with Sage Therapeutics for major depressive disorder and postpartum depression.
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