Biogen’s facility in Cambridge, Massachusetts.

Brian Snyder | Reuters

Biogen on Tuesday he said he was expecting eliminate approximately 1,000 jobsor about 11% of its workforce to save costs biotechnology company is preparing to launch its newly approved drug for Alzheimer’s disease Leqembi.

It’s the latest round of layoffs after Biogen cut nearly 900 jobs last year. By the end of 2022, Biogen had 8,725 employees worldwide.

related investment news


The job cuts are also part of the company’s ongoing cost-cutting and reorganization plan, which also includes trimming its research and development pipeline to prioritize Leqembi and other drugs. In its second-quarter earnings report, Biogen said it is “substantially complete” in setting priorities for research and development.

The larger plan is expected to generate approximately $1 billion in gross operating savings by 2025, according to Biogen.

Approximately $300 million of these savings will be reinvested in product launch and research and development programs.

The company also said the plan will result in net operating cost savings of $700 million by 2025.

Biogen shares rose more than 1% in premarket trading on Tuesday.

The new releases follow the landmark approvals of Leqembi and the company’s ALS drug Tofersen this year.

Investors are pinning their hopes on new drugs as Biogen’s blockbuster treatment for multiple sclerosis and spinal muscular atrophy faces stiff competition from cheaper versions and similar drugs.

Biogen CEO Chris Viehbacher said during the earnings call that the cost-cutting plan is “a real opportunity to make sure we’re really poised for growth this year before we go to market.”

“There are an awful lot of patients who are addicted to Biogen products,” he said during the call. “Obviously, there is a significant need to invest in bringing our new products to market. Clearly, it’s important to manage costs, but shareholder value is best optimized if we can actually achieve success in bringing these products to market.”

Wall Street analysts were pleased with the layoff announcement.

Wells Fargo analyst Mohit Bansal said in a survey on Tuesday that the broader cost-cutting plan was “in line with our expectations and was the reason for our bullish stance on the name.”

“We expect stocks to be on this news as investors have been waiting for this move,” he said.

Biogen also reported second-quarter sales and adjusted earnings on Tuesday that beat Wall Street estimates.

Biogen reported revenue of $2.46 billion for the quarter, down 5% from the same period a year ago. Analysts had expected second-quarter revenue of $2.37 billion.

The company reported net income of $591.6 million, or $4.07 per share. Excluding certain items, adjusted earnings per share for the period were $4.02. Analysts had expected adjusted earnings of $3.77 per share.

Biogen also reiterated its full-year guidance. The company forecasts a “mid-single-digit percentage decline” in revenue in 2023 compared to last year and full-year adjusted earnings of $15 to $16 per share.

Source Link