Biogen To Cut 1,000 Jobs as it Prepares to Launch Alzheimer’s Drug

Biogen plans to cut 1,000 jobs, about 11% of its workforce, to save on costs as the Biotech company prepares to launch its recently approved Alzheimer’s drug, Leqembi, the company announced Tuesday. 

Biogen outlined a new “Fit for Growth” cost saving plan that will generate gross savings of $1 billion, the company said in its second-quarter earnings report. About $300 million of the savings will be allocated for product launches and research and development of high-growth products. The company says it will reach a net savings of $700 million in operating expenses by 2025. 

Biogen's shares fell by about 4% in midday trading. 

“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,” Biogen CEO Christopher A. Viehbacher said in the earnings release. “With these changes, I believe that Biogen will be better positioned to maximize its growth opportunities going forward.”

Earlier this month, the FDA fully approved Biogen and Eisai’s new Alzheimer’s drug Leqembi, which targets one of the underlying causes of the disease, instead of just treating the symptoms. The drug has been shown to reduce clumps of a protein believed to be a cause of Alzheimer’s, amyloid beta, in a user's brain.

With full FDA approval, the Center for Medicare and Medicaid Services can now provide broader coverage of the drug. Currently, Leqembi costs $26,500 a year without insurance.

Scientists from Rush University presented data this month finding that top Alzheimer’s hotspots in the U.S. The top two counties were Miami-Dade County and Baltimore County, where 16.6% of residents over 65 suffered from Alzheimer’s.

Biogen’s total revenue for the second quarter was down 5.5% to $2.46 billion, compared to $2.59 billion in the same quarter last year. 

Income slid by nearly 44% to $591.6 million, compared to $1.06 billion during the same three months last year. 

Earnings per share in the second quarter were $4.07, above analysts expectations of $3.77, according to estimates tracked by Morningstar.