Biogen has announced plans to cut approximately 1,000 jobs, representing around 11 percent of its global workforce.
This move comes as the company prepares to launch its newly approved Alzheimer’s drug, Leqembi.
Last year, the biotech firm reduced its workforce by nearly 900 jobs, leaving it with 8,725 employees worldwide as of the end of 2022.
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The job cuts are part of its broader cost-cutting and reorganization strategy.
It also involves streamlining its research and development pipeline to prioritize the launch of Leqembi and other drugs.
Biogen’s second-quarter earnings report states, the prioritization of its R&D pipeline is “substantially complete.”
In addition to the job cuts, the overall plan is expected to generate approximately $1 billion in gross operating expense savings by 2025.
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Out of this, around $300 million will be reinvested into product launches and R&D programs.
Through this initiative, the company expects to achieve $700 million in net operating expense savings by 2025.
The layoff comes on the heels of the landmark approvals of Leqembi and the company’s ALS drug, Tofersen, earlier this year.
With increasing competition and the availability of cheaper versions and similar drugs for its blockbuster multiple sclerosis and spinal muscular atrophy treatments, investors are looking to Biogen’s new medicines for future growth.
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Biogen’s CEO, Chris Viehbacher, said the cost-cutting plan is “an opportunity really to make sure that this year, before we get into the product launches, that we are truly fit for growth.”
He said: “There are an awful lot of patients who depend on Biogen products.
“There’s a need, obviously, to have a strong investment in our new product launches.
“It’s important, clearly, to manage costs, but shareholder value is most optimized if we can really make a success of these launches.”
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The layoff announcement was well-received by Wall Street analysts.
Wells Fargo analyst Mohit Bansal said the cost-cutting plan is “in line with our expectations and was the reason for our bullish stance on the name.”
“We expect the stock to be up on this news as investors were waiting for this move.”
