Biogen Restructures to 'Maximize Opportunities'

| About: Biogen Inc. (BIIB)

The biotech had signaled a restructuring was coming and here are the details: Biogen will trim its workforce by 13 percent, or 650 jobs (leaving about 4,275 employees worldwide); three facilities in San Diego, Waltham, Massachusetts and Wellesley, Massachusetts, will be closed; and research into cardiovascular will end while the oncology program will be spun out or licensed.

Also, Biogen will “substantially reduce” its small molecule discovery programs and exit “select” neurology and immunology development programs, including neublastin for neuropathic pain and anti-TWEAK. In total, the biotech will exit 11 programs, and will eliminate its Rituxan oncology and rheumatology sales forces; Genentech will assume responsibility for the US sales and marketing for the drug.

Other moves include reorganizing business development, venture development and corporate strategy into a new corporate development group, for which a head is currently being sought. Overall, the move will cost $115 million, including $85 million for the layoffs and $30 million to close and consolidate facilities. The hope is to eliminate about $300 million in annual expenses, although that pace won’t be reached until mid-2011, according to ISI Group biotech analyst Mark Schoenebaum.

“Biogen Idec will be better off as a result of these actions. First, we will have increased focus. We have been operating in too many therapeutic areas and haven’t maximized our opportunities,” says CEO George Scangos in a statement. “We will now focus on a few areas where we can be among the best, and this starts with neurology.” He cited seven meds that could become available by 2015, including four being developed to treat multiple sclerosis.