Biogen will cut about 1,000 jobs, or 11% of its workforce, as part of a cost-cutting program geared towards optimizing new product launches.
Biogen expects its new 'Fit for Growth' program to generate approximately $1 billion in gross operating expense savings, approximately $300 million of which will be reinvested into product launches and R&D programs, the company said in its second quarter earnings report. Together with a headcount reduction of approximately 1,000 workers, the program will result in approximately $700 million in net operating expense savings by 2025.
"Accordingly, we have taken a bottom-up view to shift our resources to the areas of greatest value creation. 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 which are no longer growing. With these changes, I believe that Biogen will be better positioned to maximize its growth opportunities going forward," said Biogen CEO, Christopher Viehbacher, who took the helm in November to put Biogen back on a path to growth while the biotech recovered from a series of missteps around its Alzheimer's drug, Aduhelm.
After a rocky approval journey, facing unfavorable national coverage policies in the United States, and ultimately calling it quits on its observational trial for the drug, Biogen had to come to terms with Aduhelm not living up to its blockbuster potential.
Now, the focus is on the company's two recent approvals.
In April, the U.S. FDA has approved Biogen's Qalsody, developed in collaboration with Ionis Pharmaceuticals, for the treatment of an ultra rare form of amyotrophic lateral sclerosis (ALS).
Earlier this month, the FDA officially changed the approval status of Alzheimer's treatment, Leqembi — which Biogen is co-commercializing and co-promoting with Eisai — from accelerated approval to traditional approval. With that approval, Medicare agreed to provide coverage for the drug in appropriate healthcare settings.