Biogen Expected to Cut Costs by $1B as Industry Braves Economic Instability
Cambridge Crossing, MA, Courtesy Marcio Jose Bastos Silva/Getty Images
While the economy expands and contracts, the biopharma industry follows, and many life science companies are announcing both layoffs and expansions.
A report published by PricewaterhouseCoopers (PwC) noted that more than 60 companies announced layoffs in the first half of 2022, and there have only been 14 biotech initial public offerings (IPOs) announced, compared to 104 in 2021. Venture capital has also been slow, with biotech startups raising only about $16.5 billion compared to 2021’s full-year number of $47 billion.
But despite that, the second half is showing a decidedly mixed set of trends. Pfizer, for example, is projecting almost $100 billion in revenue for 2022, primarily driven by sales of its COVID-19 vaccine. And on Monday, it announced the $5.4 billion acquisition of Global Blood Therapeutics, a sickle cell disease-focused company.
Gilead Sciences acquired U.K.-based MiroBio last week for $405 million, an indication Gilead wants to bolster its autoimmune diseases portfolio. And Amgen kicked off August by acquiring ChemoCentryx for $4 billion, focused on Tavenos, to cement its position in inflammation and nephrology.
Here’s a further look at mixed growth news.
More Biogen Layoffs Appear Imminent
Biogen expects to lay off a potential 1,000 staffers in an effort to cut about $1 billion in costs, according to The Boston Globe.
This is largely fallout from the disappointing rollout of its controversial Alzheimer’s drug, Aduhelm (aducanumab), which has not been popular with healthcare prescribers or insurance companies. Back in March, Biogen began laying off about 10% of its staff in hopes of saving about $500 million.
Now, the company is looking to sublease one of its buildings in Kendall Square, the leading area in Cambridge, Massachusetts for the biotech industry. It has listed a building down the street for sublease, at 300 Binney St. The location was developed to support Biogen’s growth in the area, and is 188,000 square feet, containing offices, a health club and a daycare center on the ground floor. According to the JLL listing, there is 8,805-34,956 square feet available.
10x Genomics Lays Off About 100
“We took this action to make us more resilient in the current environment and put us on a path to become a sustainable business,” co-founder and CEO Serge Saxonov said in a statement. “While all teams and locations were affected by yesterday’s actions, there was less impact in R&D and field-based customer-facing roles.”
The company expects to save $5 to $6 million as a result of the job cuts. Operating loss for the quarter was $63.1 million compared to $10.3 million for the same period in 2021. This included $36.3 million of stock-based compensation compared to $26.9 million for the same period the year before.
Eli Lilly Considers Recruitment Outside Indiana Over Restrictive Abortion Law
Recently, the Indiana legislature passed one of the most restrictive abortion laws in the country. Eli Lilly, headquartered in Indianapolis and one of the biggest employers in the state, said it will likely plan expansion outside of the state in order to keep and bring on competitive staff.
In a statement, the company said it recognizes abortion as a “divisive and deeply personal issue with no clear consensus among the citizens of Indiana.
"Despite this lack of agreement, Indiana has opted to quickly adopt one of the most restrictive anti-abortion laws in the United States. We are concerned that this law will hinder Lilly’s - and Indiana’s - ability to attract diverse scientific, engineering and business talent from around the world. Given this new law, we will be forced to plan for more employment growth outside our home state," the company stated.
Talis Biomedical Cuts Staff by 35%
Earlier this month, Talis Biomedical announced it is cutting its workforce by 35%. The company, based in Redwood City, California, said the cuts will help it extend its operations into 2025. The company’s financial problems appear related to the beta rollout of its Talis One diagnostic system, which has been delayed. Talis has previously focused on COVID-19 testing, which is slowing dramatically, and plans to refocus on “large and long-term market opportunities in the women’s and sexual health spaces.”
The company went public in February 2021 with a share price of $16, which has since plunged to about $0.77. The Talis One platform has been delayed, with no indication of when it will launch.
Expansion Continues Across Biopharma
Takeda leased approximately 600,000 square feet in June for an R&D site in Kendall Square. AstraZeneca is also planning a new R&D center in Cambridge, with plans to consolidate 1,500 employees at the headquarters of its Alexion Pharmaceuticals subsidiary. Eli Lilly is planning to lease 334,000 square feet of space from Alexandria Real Estate Equities in Boston for its recently launched Institute for Genetic Medicine.
On the west coast, Eikon Therapeutics is planning to relocate its headquarters from Hayward to Millbrae. The new site will be 285,000 square feet within the Alexandria Center for Life Science.
Tenaya Therapeutics wrapped a Genetic Medicines Manufacturing Center in Union City. The site is 94,000 square feet.
The New York City Economic Development Corporation expects to bring online more than 10 million square feet of wet laboratory space in the next 10 to 15 years. This includes a 200,000-square-foot property on East 94 Street. And in June, Alexandria Real Estate Equities opened its second Alexandria LaunchLabs in the city at Columbia University’s Irving Medical Center Campus.
Also in June, Regeneron Pharmaceuticals began construction of a $1.8 billion expansion of its headquarters in Tarrytown, NY.