Biogen Q2: Jobs slashed to save $1bn, plus biosimilar burdens

The ‘Fit for Growth’ program will generate $300 million for future R&D but at the cost of 1,000 jobs. Meanwhile, Biogen faces supply issues in its flat biosimilar business.

In its Q2 earnings this week, Biogen reported revenues of $2.46 billion, down 5% on the same period last year. The disappointing results were described by senior management as evidence of Biogen’s business being “in transition,” and to help turn the ship around the firm has launched its “Fit for Growth” program.

Essentially, the program is a cost-saving exercise aimed at generating $1 billion in gross operating expense savings per year. “Of that, we expect to invest at least $300 million in growth opportunities going forward,” CEO Christopher Viehbacher said on a call, specifically pointing to product launches and R&D programs. “This is an opportunity really to make sure in this year, before we get into the product launches, that we were truly fit for growth.”

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But the savings will come from a major reduction of headcount, with Biogen cutting approximately 1,000 jobs, or 11% of its workforce. No further details of the cuts were made.

Despite successful drug launches in the quarter, much of Biogen’s problems stem from Alzheimer’s disease Aduhelm (aducanumab), which won approval in June 2021 but has suffered from limited availability due to questions arising around its efficacy.

Biosimilar burdens

Biogen also suffered from flatness within its biosimilars business, which pulled in $195 million in the quarter.

The firm exited the Samsung Biopis joint venture in 2022, selling its share to partner Samsung Biologics for $2.3 billion, but continues to commercialize four biosimilars in Europe as part of its legacy.

However, Biogen is suffering from supply constraints for Imraldi, a biosimilar version of AbbVie’s Humira (adalimumab), which is also affecting Benepali, a version of Amgen’s Enbrel (etanercept).

“We are currently working with our contract manufacturer for Imraldi to address facility regulatory inspection deficiencies at two filling locations, which could impact supply and have an adverse impact on 2023 Imraldi sales, if not resolved,” the firm said in its results.

“Manufacturing of Benepali also utilizes one of these facilities and therefore could have an adverse impact on 2023 Benepali sales. We are working with our existing secondary supplier for Benepali with the aim to secure additional capacity.”

While European Medicines Agency (EMA) labeling information lists both the former Biogen facility in Hillerød, Denmark, now run by Fujifilm Diosynth Biotechnologies, and Samsung Biologics’ site in Incheon, Korea as the location of drug substance manufacturing for both Imraldi and Benepali, the fill/finish manufacturer is not named.

Earlier this year, Biogen said it is “evaluating strategic options” for the future of its biosimilars business.

“We’ve referenced previously that we are evaluating whether this business could create more value outside of Biogen and we are engaged with multiple interested parties and we’ll provide further updates on that process as appropriate,” CFO Michael McDonnell updated shareholders on the call.