Biogen kicks off 1,000 layoffs as part of CEO Chris Viehbacher's 'complete redesign'

It was only last spring that Biogen started a round of layoffs that eventually shrank the company’s head count by nearly 900 people last year. Now, a fresh round of job cuts targeting 1,000 positions has kicked off at the struggling drugmaker.

Biogen started informing employees affected by the latest layoffs Thursday, a Biogen spokesperson told Fierce Pharma. Most notices will be handed out by the end of September, depending on the job function and region, the spokesperson added.

The cuts are part of a 1,000-person downsizing round Biogen unveiled late July to save $700 million in annual costs. Boston Business Journal first reported Thursday’s initiation of layoffs.

At the same time, Biogen is spending $7.3 billion to buy rare disease specialist Reata Pharmaceuticals. With that acquisition, Biogen gets the FDA-approved drug Skyclarys for the rare neurologic disorder Friedreich’s ataxia.

Biogen’s spokesperson declined to confirm the exact number of employees or the functions involved right now. The trims are “global and taking place across the organization,” he added.

People in the biotech community have turned to LinkedIn to offer their support. Stephanie Macholtz, a healthcare compliance VP at regenerative medicine company Organogenesis offered those impacted Biogen staffers “introductions, leads, lending an ear as you vent.” John Veytsman, a director of commercial analytics and insights at AstraZeneca’s rare disease unit Alexion said he’s willing to help with job opportunities either within or outside his organization.

Biogen’s troubles include the epic failure of Alzheimer’s drug Aduhelm, plus the long-running decline of its flagship multiple sclerosis business.

With those woes in mind, Biogen is looking outside for opportunities to diversify into rare diseases, immunology and psychiatry. That requires what Biogen CEO Chris Viehbacher calls “a complete redesign of Biogen,” which involves cost savings.

But some of the company’s expansion efforts haven’t been fruitful. The FDA dealt Biogen’s partnership with Sage Therapeutics a blow a few days ago when the agency rejected the companies’ Zurzuvae in major depressive disorder, leaving the pair only a smaller market opportunity in postpartum depression.

After the rejection, Sage CEO Barry Greene said his company has started “evaluating resource allocation, including pipeline prioritization and a workforce reorganization.”

Biogen’s latest 1,000-person layoff plan was conceived before the FDA’s decision on Zurzuvae. In response to an inquiry about whether the setback will lead to additional job cuts, Biogen’s spokesperson pointed to a release two weeks ago that the two companies are reviewing the FDA’s feedback and evaluating next steps. Biogen and Sage co-develop and co-commercialize Zurzuvae.

Nowadays, Biogen has a lot hanging on the performance of Alzheimer’s drug Leqembi, on which Biogen’s partner Eisai is taking the lead. Unlike Aduhelm, Leqembi has full FDA approval and carries better reimbursement coverage from Medicare. But the requirement of a registry still leaves some uncertainties around Leqembi’s commercial outlook.

Elsewhere, Biogen is said to be looking to bow out of biosimilars. Korean media outlets reported earlier this month that Samsung Bioepis is in talks to buy Biogen’s remaining biosimilar portfolio. Viehbacher has said he's looking at strategic options for the business.

Editor's note: James Waldron also contributed to reporting for this story.