A Biogen facility in Cambridge, Massachusetts.
Brian Snyder | Reuters
Biogen on Tuesday mentioned it expects to chop roughly 1,000 jobs, or about 11% of its workforce, to avoid wasting prices because the biotech firm prepares to launch its newly accredited Alzheimer’s drug Leqembi.
Biogen had 8,725 workers worldwide as of the tip of final 12 months. The layoffs are a part of the corporate’s ongoing cost-cutting and reorganization plan, which additionally includes shaving down its analysis and improvement pipeline to prioritize Leqembi and different medication.
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Biogen, in its second-quarter earnings report, mentioned the bigger plan is predicted to generate roughly $1 billion in gross working expense financial savings by 2025.
About $300 million of these financial savings might be reinvested into product launches and R&D applications.
The firm additionally mentioned the plan will end in $700 million in web working expense financial savings by 2025.
Biogen’s inventory worth rose greater than 1% in premarket buying and selling Tuesday.
The new layoffs comply with landmark approvals of Leqembi and the corporate’s ALS drug Tofersen this 12 months.
Investors are pinning their hopes on the brand new medicines as Biogen’s blockbuster a number of sclerosis and spinal muscular atrophy therapies face fierce competitors from cheaper variations and comparable medication.
Biogen CEO Chris Viehbacher mentioned throughout an earnings name that the cost-cutting plan is “an opportunity really to make sure that this year, before we get into the product launches, that we are truly fit for growth.”
“There are an awful lot of patients who depend on Biogen products,” he mentioned in the course of the name. “There’s a need, obviously, to have a strong investment in our new product launches.”
Wall Street analysts have been happy with the layoff announcement.
Wells Fargo analyst Mohit Bansal mentioned in a Tuesday analysis observe that the broader cost-cutting plan is “in line with our expectations and was the reason for our bullish stance on the name.”
“We expect the stock to be up on this news as investors were waiting for this move,” he mentioned.
Source: www.cnbc.com”