Revenues up at Biogen – but job losses planned
pharmafile | October 22, 2015 | News story | | Biogen, financial results, job losses, redundancies
Despite lower than predicted sales of its top-selling products, Biogen has achieved $2.8 billion in revenues in the third quarter of 2015, an 11% increase compared to the same period in 2014.
Yet along with its third quarter financial results, the US firm also announced swingeing job cuts, in plans to reduce its workforce by the same amount – 11% – or some 800 jobs in the US.
In multiple sclerosis, Biogen’s speciality area, total drug sales were $2.2 billion, compared to $2.1 billion in the same quarter last year. Top-selling MS treatment Tecfidera (dimethyl fumarate) revenues were $937 million compared to $787 million in the same quarter last year. These results included $754 million in US sales and $183 million in sales outside the US, compared to $638 million and $149 million, respectively, in the third quarter of 2014.
But overall its sales are lower than expected, prompting the company to downgrade its financial predictions. It now says that: “Revenue growth is expected to be approximately 8% to 9% compared to 2014, a modest increase versus prior guidance. This guidance implies a sequential decrease in revenue in the fourth quarter of 2015.”
However the company also announced a ‘corporate restructuring’ that will see it shed 11% of its workforce by the end of 2015, in a bid to save the firm $250 million in ‘operating expenses’ in 2016.
Biogen has already discontinued several large-scale clinical trial programs to cut its R&D costs, including its Phase III program for Tecfidera in secondary progressive MS, the development of anti-tweak in lupus nephritis, and certain activities in immunology and fibrosis research. It has also been hit by a further clinical trial blow, with the announcement that MS drug Tysabri (natalizumab) failed to reach clinical endpoints in a Phase III study in patients with secondary progressive MS.
Biogen chief executive George Scangos says: “We remain committed to maximizing the potential of our commercial portfolio, with a particular emphasis on Tecfidera. We continue to see growth for our market leading portfolio of MS products, driven by the uptake of our oral therapy Tecfidera in recently launched countries worldwide and the introduction of Plegridy (peginterferon beta-1a) to new markets.”
“The decision to reduce the Company’s workforce was extremely difficult, but we believe these actions are necessary to fulfil our mission of bringing important new medicines to patients. We have several high-quality programs that are now or soon will be in Phase III, and the cost savings from the restructuring will be reinvested to carry out those programs aggressively and hopefully to bring them to patients as quickly as possible,” Dr Scangos continues. “We are grateful for the contributions of our talented and admired colleagues and we will do our best to treat everyone with fairness and dignity.”
Lilian Anekwe
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