Biogen Q3 2015 revenues increase 11% to $2.8 billion

Corporate restructuring to result in an 11% workforce reduction.

On a reported basis, GAAP diluted EPS for the third quarter of 2015 were $4.15, an increase of 15% over the third quarter of 2014. GAAP net income attributable to Biogen for the third quarter of 2015 was $966 million, an increase of 13% versus the same period in the prior year.

Biogen also announced a corporate restructuring, which includes the termination of a number of pipeline programs and an 11% reduction in workforce. These changes are expected to reduce the current annual run rate of operating expenses by approximately $250 million. The company plans to reinvest these savings to support key commercial initiatives, including increased sales and marketing activities behind Tecfidera, and the advancement of high potential pipeline candidates in areas such as Alzheimer’s disease, multiple sclerosis, and spinal muscular atrophy.

“We remain committed to maximizing the potential of our commercial portfolio, with a particular emphasis on Tecfidera,” said CEO Officer George A. Scangos. “We continue to see growth for our market leading portfolio of MS products, driven by the uptake of our oral therapy Tecfidera in recently launched countries worldwide and the introduction of Plegridy to new markets.”

“The decision to reduce the Company’s workforce was extremely difficult, but we believe these actions are necessary to fulfil our mission of bringing important new medicines to patients. We have several high-quality programs that are now or soon will be in Phase 3, and the cost savings from the restructuring will be reinvested to carry out those programs aggressively and hopefully to bring them to patients as quickly as possible,” Dr Scangos continued. “We are grateful for the contributions of our talented and admired colleagues and we will do our best to treat everyone with fairness and dignity.”

Corporate restructuring

The company plans to substantially complete the majority of the 11% reduction of its global workforce by the end of 2015. The company is in the process of notifying employees affected by the restructuring, and has initiated the required consultation processes in European countries where employees may be affected. Biogen has also discontinued several programs, including its Phase III program for Tecfidera in secondary progressive MS, the development of anti-TWEAK in lupus nephritis, and certain activities in immunology and fibrosis research.

Implementing these changes is expected to reduce the current annual run rate of operating expenses by approximately $250 million. Biogen expects to incur a charge of approximately $85–95 million, primarily in the fourth quarter of 2015.

In addition, the company plans to identify additional savings in non-labour expenses by the end of the year.

The restructuring is expected to yield savings for 2016 and beyond and provides additional financial flexibility to support marketed therapies and focus on a number of meaningful pipeline opportunities, including