Biogen announces layoffs as focus turns to new products
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Biogen (NASDAQ:BIIB) exceeded Wall Street forecasts with its Q2 2023 results on Tuesday and announced a new cost savings program including plans to reduce about 1,000 employees as the company shifts its resources to newly approved medications.
The Cambridge, Massachusetts-based biotech intends to save about $1B in gross operating expenses from the program named "Fit for Growth." $300M of savings will be channeled towards product launches and R&D programs, the company said.
"While we will be making significant investments in our newly prioritized pipeline and new product launches, we will also need to invest less in other areas which are no longer growing," CEO Christopher Viehbacher remarked.
Early this month, the company won full FDA approval for its second Alzheimerâs therapy,Leqembi, developed with Eisai (OTCPK:ESALF) (OTCPK:ESAIY). In early August, the FDA is set to decide on the marketing approval for a depression therapy called zuranolone Biogen (BIIB), developed with partner Sage Therapeutics (SAGE).
For the quarter, the company reported $2.5B in revenue with a ~5% YoY decline on a reported basis as its multiple sclerosis (MS) franchise continued to underperform. MS sales reached $1.2B during the quarter, with a 15% YoY decline as leading sales generator Tecfidera stood below expectations, bringing in $254.2M in revenue.
However, Spinraza, a treatment for spinal muscular atrophy, exceeded Wall Street forecasts, adding $437.1M to the topline with ~1% YoY growth.
Other product revenue including sales from the companyâs FDA-authorized Alzheimerâs therapy Aduhelm, improved to $4.3M from $2.8M in the prior-year quarter.
Meanwhile, the companyâs total product revenue contracted ~10% YoY to $1.8B and other revenue, including contract manufacturing revenue related to the production of Leqembi, more than doubled to $198M. 
However, the company reiterated its full year outlook indicating a mid-single digit percentage decline in revenue and $15.00 - $16.00 in adj. earnings per diluted share.
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