Biogen: A 'Decimated' Pipeline?

| About: Biogen Inc. (BIIB)

You don't want coverage like this: "Biogen (NASDAQ:BIIB) CEO Tries to Refill Early-Stage Pipeline He Decimated." That would be George Scangos:

. . .Scangos and his research chief eliminated about 17 early-stage drug projects in 2010 and last year to hone the company's focus, leaving it with only about four early-stage compounds. Biogen exited oncology and cardiovascular research and is now targeting drugs to treat neurological and autoimmune conditions. . .

"We didn't want to fund projects that were unlikely to generate value," Scangos said in an interview on the sidelines of the J.P. Morgan health-care conference in San Francisco this week. But even if Biogen's late-stage pipeline delivers successful new drugs soon, the company needs more compounds in early-stage testing to sustain long-term growth. So it is licensing drugs from other companies.

The article itself (from Peter Loftus, originally in the Wall Street Journal) isn't quite as harsh as the headline. As as that excerpt shows, part of the problem is that Scangos thought that the company was in some therapeutic areas that they shouldn't have been in at all, so that pipeline he's refilling isn't exactly the same one he cleared out. (And a note to the WSJ headline writers: "decimated" isn't a synonym for "got rid of a lot," although that horse, I fear, left the barn a long time ago. The mental image of decimating a pipeline isn't the sharpest vision ever conjured up by a headline, either, but I understand that these things are done on deadline.)

No, if I had to pick the biggest expensive reversal done under Biogen's new management, I'd pick the construction site a few blocks from here where they're putting up the company's new Cambridge headquarters. Those are the offices that used to be in.. well, Cambridge, until former CEO Jim Mullen moved them out to Weston just a couple of years ago. I don't know how long it's going to take them to finish those buildings (right now, they're just past the bare-ground stage), but maybe eventually they can all work there for a few months before someone else decides to move them to Northhampton, Nashua, or Novosibirsk.

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