Biogen to slash 1,000 jobs as it looks to save $700 million

“There has been a complete redesign of Biogen,” CEO Christopher Viehbacher said on a call with analysts Tuesday morning. The company expects the effort to generate about $1 billion in gross annual cost savings by 2025, he said, and of that, about $300 million will be reinvested in growth opportunities, leaving about $700 million in net operating-cost savings. 

The cost-reduction details were announced as Biogen released second-quarter results that topped analysts’ estimates. The company posted second-quarter net income of $591.6 million, or $4.07 per share, down from $1.06 billion, or $7.24 per share, in the year-earlier period. Adjusted earnings per share of $4.02 were down 23% from the year-earlier period but beat the FactSet consensus of $3.77. Revenue in the quarter came to $2.46 billion, down from $2.59 billion a year earlier and ahead of the $2.37 billion FactSet consensus.   

Biogen shares were down 3.7% Tuesday morning. 

Viehbacher on the call Tuesday sought to differentiate Leqembi from Eli Lilly and Co.’s
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investigational Alzheimer’s drug donanemab. Lilly this month released new data showing that donanemab has particular promise in treating patients in the earliest stage of disease and at younger ages.

“These are two very different products” with different clinical-study designs and safety profiles, Viehbacher said on the call. He added that Biogen will have patient navigators available to help people understand Leqembi and the treatment process.  

Leqembi’s approval has generated debate about whether there’s enough capacity at hospitals and infusion centers to give patients the treatment, which is administered intravenously every two weeks. Biogen is working on a subcutaneous form of Leqembi for use with an autoinjector that could potentially enable at-home administration, Dr. Priya Singhal, the company’s head of development, said on the call. The company said it plans to make its regulatory filing for approval of subcutaneous Leqembi in the first quarter of 2024. 

Biogen’s multiple-sclerosis business took a hit in the second quarter as its blockbuster drug Tecfidera faced generic competition in the U.S. and certain international markets. Multiple-sclerosis product revenues came to about $1.2 billion in the second quarter, down from $1.43 billion in the year-earlier period. 

The company said relatively little on the call Tuesday about zuranolone, a collaboration between Biogen and Sage Therapeutics Inc.
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An FDA decision is expected by the end of next week on the approval of zuranolone for treatment of major depressive disorder and postpartum depression. “We don’t want to disturb that process” ahead of the FDA decision, Viehbacher said on the call, adding that “the opportunity is huge” for the drug.  

Biogen reiterated its full-year 2023 guidance, forecasting adjusted earnings per share of $15 to $16 and a mid-single-digit percentage decline in total revenues. 

The company on Tuesday presented a “reprioritized pipeline” focused on Alzheimer’s and dementia, neuropsychiatry, immunology and neuromuscular disorders, among other conditions. 

The cost-cutting program could add $3 to $4 to earnings per share by 2025, leading to roughly $20 in earnings per share without factoring in the Alzheimer’s treatment profits, Jefferies analysts wrote in a note Tuesday. 

Biogen shares are down 3.7% in the year to date, while the S&P 500
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has gained 18.8%.