UPDATED: Biogen's manufacturing feels the pain of its cost-cutting

Biogen has been adding significantly to its manufacturing network lately. Now, it has decided, it is time to subtract.

Cambridge, MA-based Biogen ($BIIB) laid out plans on Wednesday for taking an 11% bite out of its workforce by year's end, chewing up about 800 jobs to save $250 million in annual operating expenses. Plans are to plow the extra money into its "key commercial initiatives," where sales of its MS drug Tecfidera have cooled.

Biogen CFO Paul Clancy

While Biogen was short on specifics, CFO Paul Clancy said in a conference call that Biogen will be "resizing portions of the company, where we felt there was excess capacity, including in our manufacturing operation," according to a transcript from Seeking Alpha.

Biogen did acknowledge to FiercePharma that the cuts will include 400 jobs in Massachusetts and another 130 in Research Triangle Park, NC, both locations where it has manufacturing operations. If those cuts are all manufacturing jobs, then its production operations will be absorbing two-thirds of the cost-cutting blow.

A Biogen spokeswoman declined to provide details today other than that the cuts will be broad. She pointed out that both sites have other operations besides manufacturing. Cambridge is its headquarters where it does much of its R&D work. 

Biogen has a large manufacturing presence in Cambridge and manufacturing operations in Research Triangle Park, a site it had been sharing with its sometimes partner, Eisai. In July, the company acknowledged it would buy from Eisai the portion of the facility the Japan-based company has been utilizing and add about 100 of the 135 Eisai employees that work there. That transfer was the result of Eisai's own cost-cutting measures.

In fact, Biogen's most recent announcements concerning manufacturing have been about expansions. In June, it unveiled plans to build a $1 billion plant in Switzerland, where it expects to add 400 jobs. It intends to build the new facility in Luterbach, Switzerland, about 120 kilometers from its European headquarters in Zug. Work on the facility is slated to begin this year and the facility is projected to be fully operational by 2021 to provide additional capacity for Biogen's biologics pipeline. It would be Biogen's second plant in Europe, where it also has a facility in Denmark.

Biogen has said that it is working off a 5-year strategic plan for its manufacturing needs and expects to build more facilities and to expand capacity at its existing plants as demand grows.

- here's Biogen's earnings statement
- read the transcript here (reg. req.)

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