Biogen announces further cost-reduction measures and exit of CEO
Last month the US Centers for Medicare & Medicaid Services (CMS) confirmed it would limit coverage of Aduhelm to clinical trials; dashing hopes of a 10-million patient opportunity for the company in the US. Instead, Biogen is now outlining its plans to curtail efforts behind the drug in the US (it has also withdrawn its marketing application for the drug in the EU)
Cost-reduction measures related to Aduhelm, as well as in other areas, are expected to yield around $500m in annualized savings in addition to previously announced initiatives for another $500m in savings.
Biogen cuts back on Aduhelm but remains committed to lecanemab
While the FDA approved Aduhelm in June last year in a much-anticipated decision, questions over its clinical efficacy and safety have plagued its rollout: cumulating in the US CMS' decision not to cover the drug for most patients.
Biogen now says it will retain ‘minimal resources’ to manage patient access programs, including a continued free drug program for patients currently on the treatment in the US. It will also continue funding certain regulatory and R&D activities for the drug, including the continuation of the Embark re-dosing study and the initiation of the Phase 4 post-marketing study required by the FDA, called Envision.
Biogen also notes that other actions may be taken depending on the upcoming data readouts for this class of antibodies, as well as further engagement with the FDA and CMS.
Despite its Aduhelm woes, Biogen says it remains confident in lecanemab with a Phase 3 readout for the Alzheimer’s drug due in the fall this year. Biogen and partner Eisai plan to complete the rolling submission for lecanemab with the FDA in Q2 this year with an application for full FDA approval planned for Q1 2023: which, if successful, would make it the first anti-amyloid antibody to obtain full approval for Alzheimer’s in the US. It also highlights other drugs in its pipeline.
“We are disappointed by the recent Medicare coverage decision for Aduhelm,” said Michel Vounatsos, Biogen's Chief Executive Officer. “We executed on our core business objectives in the first quarter, and we will now look forward and execute on a set of near-term operational priorities, which we believe will drive renewed growth and value creation over time.
"We have a strong balance sheet, enabling us to advance a broad pipeline that includes lecanemab in Alzheimer’s disease and zuranolone in depression, while also pursuing new internal and external growth opportunities.”
Biogen Q1 2022
- First quarter total revenue of $2,532m decreased 6% versus the prior year at actual currency and 5% at constant currency.
- Multiple sclerosis (MS) revenue, including royalties on sales of Ocrevus, of $1,647m decreased 3% versus the prior year at actual currency and 2% at constant currency.
- Spinraza revenue of $473m decreased 9% versus the prior year at actual currency and 6% at constant currency.
- Biosimilars revenue of $194m decreased 5% versus the prior year at actual currency and 1% at constant currency. Rituxan/Gazyva revenue of $147 million decreased 18% versus the prior year.
- First quarter GAAP and Non-GAAP EPS attributable to Biogen Inc. were negatively impacted by approximately $0.76 due to Aduhelm inventory write-offs.
- In April 2022 Biogen completed the sale of its equity stake in the Samsung Bioepis joint venture to Samsung Biologics for a total consideration of up to $2.3bn, of which approximately $1bn in cash was received at closing.
Meanwhile, Biogen has begun a search for a new CEO, with current leader Michel Vounatsos staying in the position until his successor is appointed.
Vounatsos was appointed as CEO in 2017 has served as the Company’s Chief Executive Officer since his appointment in January 2017 and over that time has ‘transformed the company from a company focused primarily on MS into a pioneer in neuroscience with a robust and diversified pipeline that includes over 30 clinical programs across a broad set of disease areas and modalities, 10 of which are in Phase 3 or filed’.
Under his leadership have been the launches of spinal muscular atrophy treatment Spinraza and Vumerity, a novel treatment for relapsing forms of MS, as well as the establishment of a successful biosimilars business.
Stelios Papadopoulos, Chairman of the Biogen Board of Directors, said: “We appreciate Michel’s significant contributions to Biogen. He has transformed the Company into a global leader in neuroscience. He always puts patients first, driven by a steadfast commitment to innovation and scientific advances that can make a difference in the lives of people confronting devastating diseases. We are pleased that Michel will continue to lead the Company until a successor is appointed and help to ensure a seamless transition to a new chief executive. This is the right time to transition to a new leader who will build Biogen’s next chapter on the strong foundation existing today.”
Vounatsos said: “It has been an honor to lead this outstanding Company during such a challenging period and to work closely with so many dedicated and talented colleagues. I am very proud of Biogen’s unparalleled capabilities in neuroscience, a complex field with tremendous unmet medical need, and of the novel medicines and benefits we have brought to patients. I want to thank the Board of Directors and my colleagues for their support during this period. I will be leaving at a time of promise for Biogen, with noteworthy potential for value creation, and I look forward working with my successor through a smooth transition.”