Biogen said it expects to eliminate roughly 1,000 positions to save money ahead of launching a new drug to treat Alzheimer's disease.
Investors are pinning their hopes on Leqembi, as the U.S. biotech company hopes to use the new treatment as a springboard for a return to growth, amid fierce competition from cheaper versions and rival drugs for the company’s multiple sclerosis and spinal muscular atrophy (SMA) treatments.
The cost-cutting program is expected to reduce about $700 million in net operating expenses by 2025, Biogen said on Tuesday. At the end of 2022, the company had 8,725 employees worldwide.
Signage outside the Biogen Inc. office in the Kendall Square neighborhood of Cambridge, Massachusetts, on Sept. 6, 2022. (Adam Glanzman/Bloomberg via Getty Images)
Biogen CEO Christopher Viehbacher said in a statement that the business "is in transition."
"While we will be making significant investments in our newly prioritized pipeline and new product launches, we will also need to invest less in other areas," he said. "With these changes, I believe that Biogen will be better positioned to maximize its growth opportunities going forward."
In April, the company said it would pause or discontinue at least four studies of experimental drugs to focus on more lucrative options including the Leqembi launch while cutting costs.
In early July, the Food and Drug Administration granted a standard approval to Leqembi, which Biogen sells with Japan's Eisai, clearing the way for wider insurance coverage.
However, Biogen has said it expects costs related to the launch are likely to offset "modest" sales this year.
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In the second quarter, the company earned $4.02 per share on an adjusted basis, compared with estimates of $3.77.
Reuters contributed to this report.