Biogen ($BIIB) has been traveling a rough road lately, with slower-than-expected sales for its hot-selling MS med Tecfidera prompting the company to lower its forecast earlier this year. And now, it's rolling out a restructuring to help bolster the drug.
The company announced Wednesday that it would ax 11% of its workforce--more than 800 jobs--in a bid to save $250 million in operating expenses. Biogen will reinvest the savings "to support key commercial initiatives," the company said in a statement, including beefing up sales and marketing activities for Tecfidera.
Biogen did not elaborate on exactly how many jobs are at stake, telling FiercePharma in an email that the cuts represent 11% of its 8,000 total global workforce. But 400 jobs will be axed in Massachusetts and another 130 positions will be eliminated at Biogen's Research Triangle Park, NC, location, the company said.
"The decision to reduce the company's workforce was extremely difficult, but we believe these actions are necessary to fulfill our mission of bringing important new medicines to patients," CEO George Scangos said in a statement.
The drugmaker is walking away from some development projects, too, including a Phase III program for Tecfidera in secondary progressive MS.
But it wasn't all bad for Biogen during Q3. Worldwide Tecfidera sales jumped to $937 million in Q3 from $787 in the same period last year, surpassing consensus estimates of $892 million. That's good news for Biogen as it deals with pricing pressure for the drug in Germany and sluggish growth in the U.S. after the FDA last year slapped a warning for rare brain disease progressive multifocal leukoencephalopathy (PML) on the med's label.
Other MS drugs also chipped in growth, with $785 million in revenues coming from injectables Avonex and Plegridy--a 14% hop from Q2. Part of Avonex's haul can be attributed to a wholesaler inventory rebalancing from a drawdown in the second quarter, Evercore ISI analyst Mark Schoenebaum said in a note to clients.
Tysabri also hit its mark, hauling in $480 million compared with the $477 million that Wall Street forecast. But the Cambridge, MA-based company announced disappointing top-line results for the drug, as it did not meet its primary and secondary endpoints in a Phase III study for the treatment of secondary progressive multiple sclerosis. Still, that news didn't exactly come as a surprise to investors who "increasingly expected it not to work given the delay in readout," Evercore ISI analyst Umer Raffat said in a note to investors.
Overall, Biogen raked in $2.78 billion in revenue, a 10.6% leap over the same quarter last year that beat analysts' estimates of $2.64 billion. The company is raising its growth forecasts as a result, expecting a sales increase of between 8% to 9% over last year with non-GAAP diluted EPS of between $16.20 and $16.50.
|Biogen CEO George Scangos|
And the company could also turn to M&A to generate growth in the year ahead. Biogen is "constantly looking for interesting opportunities with our strategies in our areas of expertise," Scangos said during the company's Q3 earnings call, targeting small and large acquisitions that offer "high quality compounds with a reasonable chance of success," he added. "It's not so much a question of size, but making solid, strategic medical and financial decisions," Scangos said.
- here's Biogen's earnings statement
- read the company's Tysabri release
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Editor's note: This story was updated with comments from Biogen.