In reporting its first-quarter earnings, Biogen said it would halt the development of at least four investigational drugs to allow the company to focus on more lucrative opportunities.On Tuesday, Biogen revealed what those opportunities—and its other cost-cutting measures—would entail, saying (PDF) it would reduce its headcount by 1,000 by 2025. With the company starting 2023 with 8,725 employees, that’s an 11.5% reduction of the workforce.

At the start of 2022, Biogen employed (PDF) 9,610 people, according to an SEC filing. The numbers show that Biogen has already been working to downsize in the wake of the disastrous Aduhelm launch for Alzheimer's disease.

The latest measures will save Biogen $1 billion in operating expenses by 2025, the company estimates, with roughly $300 million of that earmarked for re-investment as Biogen launches key products, including newer Alzheimer’s disease drug Leqembi, which gained a full approval from the FDA earlier this month.

Biogen’s shift comes after a series of costly failures in the development and launch Alzheimer’s treatment Aduhelm. In the wake of the setbacks, former Sanofi CEO Chris Viehbacher—who was hired in November of last year—has started to re-tool the company.

“Biogen’s business is in transition,” Viehbacher said in a release. “Accordingly, we have taken a bottom-up view to shift our resources to the areas of greatest value creation.”

In a conference call on Tuesday morning, Viehbacher reiterated his faith in Biogen’s R&D capability but said the company needs to be more selective in deciding what projects to pursue.

“The discipline to kill stuff that doesn’t meet its milestones is something that is probably more important than anything else to managing R&D investments,” Viehbacher said. “We’re gonna be extremely tough on what it is that we’re gonna choose to develop.”

For the quarter, Biogen reported revenues of $2.46 billion, a 5% decline from the second quarter of 2022 but a number that still topped analyst expectations by $89 million. Only $12 million of the beat was from product revenues, however, as the rest was from “contract manufacturing, royalty and other revenue,” Mizuho Securities analysts noted.

“A lower-quality beat, in this regard,” Mizuho analyst Salim Syed wrote in a note to investors.

Biogen did not alter its guidance for the year, saying it still expects a mid-single-digit percentage revenue decline from its $10.2 billion figure in 2022.

As it did in the first quarter, Biogen spent more than it generated on Leqembi, with launch expenses exceeding sales by $20.7 million. The company said it expects the trend to continue this year. But with a full approval now in hand—allowing for broader Medicare coverage—sales should start to increase rapidly.

“We’re also getting reimbursement beyond CMS,” Viehbacher said. “We have Medicaid, for example, in 48 out of the 50 states so far and we have very good response from commercial insurers.”

Biogen’s multiple sclerosis franchise continued its slide, generating $1.21 billion in sales for a 15% decline from the second quarter of 2022.

“Biogen’s entire multiple sclerosis franchise presents very little to get excited about as every drug (Avonex, Plegridy, Tysabri and Fampyra) posted year-over-year declines in sales except for Vumerity, which posted growth of 7%,” Third Bridge analyst Lee Brown wrote.

While Tysabri pulled in $473 million in the quarter, Wolfe Research analyst Tim Anderson noted that the company “struck a more cautious tone” about the possibility of biosimilar competition arriving ahead of schedule this year.

Spinal muscular dystrophy treatment Spinraza, typically a bright spot in Biogen's earnings releases, topped expectations with a haul of $437 million in the quarter.

Source: fiercePharma.com