Biogen to cut 11 percent of staff, cancel some drug programs; stock jumps
By Bill Berkrot
(Reuters) - Biogen Inc (BIIB.O: Quote), whose shares have tumbled since it slashed growth forecasts for its top-selling multiple sclerosis drug in July, said it will cut 11 percent of its workforce and eliminate development of several drugs to focus on high-priority medicines in its pipeline.
Wall Street signaled its approval of the belt-tightening as well as better-than-expected third-quarter sales of Biogen's multiple sclerosis drugs, sending its shares up as much as 9.5 percent. But most of the gains evaporated by midday.
The restructuring, announced on Wednesday, will reduce operating expenses by about $250 million this year, it said.
The U.S. biotech's stock had fallen about 35 percent over the past three months over concerns about slowing sales of Tecfidera, its oral multiple sclerosis drug.
Biogen will stop developing a drug for lupus and end some immunology and fibrosis research to concentrate on high-risk programs that promise high reward if successful.
They include late-stage development of its high-profile Alzheimer's disease drug aducanumab, two other Alzheimer's programs, its anti-Lingo drug that aims to repair nerve damage caused by MS, and one for spinal muscular atrophy.
The company will also pour some of the savings into direct-to-consumer marketing of Tecfidera in an effort to reignite growth in the United States and elsewhere. It cut a Tecfidera program in secondary progressive multiple sclerosis after disappointing trial results.
Chief Executive Officer George Scangos said, even with mounting pressures to rein in prices of U.S. prescription drugs, medicines like aducanumab and others on which it will focus will justify "attractive pricing" if approved. Continued...