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More R&D Fat is Trimmed as Biogen (BIIB) Closes Doors on UK's Convergence Pharma

5/12/2017 8:13:56 AM

More R&D Fat is Trimmed as Biogen Closes Doors on UK's Convergence Pharma May 12, 2017
By Alex Keown, Breaking News Staff

CAMBRIDGE, Mass. – After little more than two years-worth of ownership, Biogen (BIIB) is shuttering U.K.-based subsidiary Convergence Pharmaceuticals and laying off 17 employees.

Writing in Endpoints John Carroll said Biogen confirmed the news, saying it was part of an effort to “streamline R&D operations.” The R&D work done at Convergence in pain therapy will be shifted to two different offices—one in Maidenhead, U.K. and the company’s headquarters in Massachusetts.

“The move does not represent a change in our commitment to chronic pain. We are continuing to develop BIIB074, a Nav1.7 blocker, and are advancing development activities across multiple peripheral neuropathic pain indications,” Biogen said in a statement to Endpoints.

Neither Carroll’s report nor Biogen’s statement did not indicate how many Convergence employees would be remaining following the layoffs. According to online company database Crunchbase, Convergence maintained up to 50 employees, but did not provide a definitive number.

Biogen acquired Convergence in January 2015 for $675 million. The company made the move in order to strengthen its position in the pain market, particularly in neuropathic pain. At the time of the acquisition, Biogen said Convergence’s pipeline was a natural complement to its neurology portfolio.

When Biogen acquired the company, Carroll said it was unusual that the Convergence employees were kept together as long as Biogen did, since it’s fairly common to lay off employees and streamline operations following M&A activity.
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Biogen is no stranger to layoffs. In October 2015, the company cut 11 percent of its workforce, about 880 employees after share prices fell 35 percent over a three months period due to lagging sales of its lead drug Tecfidera. In December 2016, the company laid off more than 200 employees in its manufacturing facilities.

Still, it’s not all been bad for Biogen. The company has a new hemophilia drug spinoff company, Bioverativ. The new company is backed by two approved hemophilia drugs, Eloctate for Hemophilia A and Alprolix for Hemophilia B.

In December 2016, Biogen saw the approval of its spinal atrophy drug, Spinraza, the first ever drug approved for the disease. Co-developed by Ionis Pharmaceuticals (IONS), Spinraza is an antisense oligonucleotide (ASO) that is designed to alter the splicing of SMN2, a gene that is nearly identical to SMN1. There are an estimated 9,000 to 25,000 SMA patients in the United States, according to the SMA Foundation. Spinraza was approved with a broad use label for SMA Types 1, 2, and 3.

Biogen also has life still in its Alzheimer’s research focused on the amyloid hypothesis. Its experimental Alzheimer’s drug aducanumb passed a mid-stage hurdle last year and is proceeding into the next round of testing—but that’s a round where so many other Alzheimer’s drugs have failed. The study is not expected to read out for several years. Shares of Biogen are trading at $254.75 as of 11:37 a.m.

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