Biogen to cut 1,000 jobs as company prepares for Leqembi launch

Biogen expected on tuesday About 1,000 layoffsor about 11% of staff, to save costs Biotechnology company Ready to launch newly approved Alzheimer’s disease drug Leqembi.

This is the latest round of layoffs after Biogen cut nearly 900 jobs last year. By the end of 2022, Biogen had 8,725 employees worldwide.

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The layoffs are also part of the company’s ongoing cost-cutting and restructuring plan, which also includes cutting its R&D pipeline to prioritize Leqembi and other drugs. Biogen said in its second-quarter earnings report that prioritization of its R&D pipeline was “substantially complete.”

The larger plan is expected to save about $1 billion in total operating expenses by 2025, according to Biogen.

Approximately $300 million of the savings will be reinvested in product launches and R&D projects.

The company also said the plan would save $700 million in net operating expenses by 2025.

Shares of Biogen rose more than 1% in premarket trading Tuesday.

The new layoffs follow the landmark approval this year of Leqembi and the company’s ALS drug Tofersen.

As Biogen’s blockbuster multiple sclerosis and spinal muscular atrophy treatments face stiff competition from cheaper versions and similar drugs, investors are pinning their hopes on the new drugs.

Biogen CEO Chris Viehbacher said on the earnings call that the cost-cutting plan “is really an opportunity to make sure we’re really fit for growth this year before we launch.”

“There are a lot of patients who rely on Biogen products,” he said by phone. “Obviously, we need to invest heavily in new product launches. Obviously, managing costs is important, but if we can really successfully launch these products, shareholder value is maximized.”

Wall Street analysts were pleased with the layoff announcement.

The broader cost-cutting plan “is in line with our expectations and is why we are bullish on the name,” Wells Fargo analyst Mohit Bansal said in a research note on Tuesday.

“We expect the stock to rise on the news as investors await the move,” he said.

Biogen also reported second-quarter revenue and adjusted earnings on Tuesday, beating Wall Street expectations.

Biogen reported revenue of $2.46 billion for the quarter, down 5% from a year ago. Analysts had expected second-quarter sales of $2.37 billion.

The company reported net income of $591.6 million, or $4.07 per share. Excluding certain items, adjusted earnings per share for the period were $4.02. Analysts had expected adjusted EPS of $3.77.

Biogen also reiterated its full-year guidance. The company expects a “mid-single-digit percentage decline” in revenue in 2023 compared to last year, with full-year adjusted EPS of $15 to $16.