After months of speculation about looming layoffs, Biogen is handing out pink slips in order to save about $500 million.
John Tlumacki/The Boston Globe via Getty
After months of speculation about looming layoffs, Biogen is handing out pink slips in order to save about $500 million.
First reported by STAT News and later confirmed by other outlets as well as Biogen, the company could lay off about 10% of its employees as it continues to suffer fallout for the disappointing rollout of Aduhelm, its controversial Alzheimer’s disease drug. Speculation about potential layoffs has been ongoing since the end of 2021. It’s unknown how many employees Biogen intends to issue pink slips to but earlier numbers predicted up to 1,000 employees.
Based in Cambridge, Massachusetts, the company had 9,610 employees as of the end of 2021 according to its 10-K filed with the U.S. Securities and Exchange Commission.
In a statement to BioSpace, a Biogen spokesperson said it was not publicly providing additional details regarding the number of employees terminated, nor when those terminations would take place. Last year, the company announced a $500 million cost-savings program but that will not be entirely driven by headcount, the spokesperson said in an email.
“As previously shared, Biogen is implementing cost-reduction measures that are expected to yield approximately $500 million in annualized savings. In support of these measures, some of our colleagues in the U.S. were recently informed that their roles are being eliminated,” the company said in a statement.
Biogen said the changes will enable it to remain flexible and will allow additional investments to be made in its pipeline, as well as other strategic initiatives.
“As part of our headcount reductions we’ve prioritized not fulfilling open positions. Some employees will be able to apply for the open positions we are filling,” the statement reads. “We appreciate the contributions of our departing colleagues, who will be eligible for severance and support services as they transition out of the company.”
There are reports that Biogen has already laid off more than 100 employees. That includes two-thirds of the commercial team associated with its Alzheimer’s franchise.
Since its June approval, Biogen has struggled to gain commercial ground for Aduhelm (aducanumab). Sales have been hampered due to concerns that have arisen over Aduhelm’s safety. Earlier this month, the company was hammered by reports of additional deaths of patients who took the Alzheimer’s medication. At least four elderly adults have died after taking the medication, according to data in the U.S. Food and Drug Administration Adverse Events Reporting System (FAERS). These elderly patients had other complications beyond Alzheimer’s that could have been the cause of death.
Throughout the clinical development of the drug, researchers observed cases of amyloid-related imaging abnormalities (ARIA-E) or cerebral edema. Aduhelm’s warning label points to possibilities of ARIA-E. Regardless, the specter of safety concerns has cast a long shadow over the first Alzheimer’s drug to be approved in the U.S. in nearly two decades.
Since its approval, sales have been anemic. In the fourth quarter of 2021, Aduhelm earned under $1 million in sales. In all, Aduhelm generated only $3 million in revenue in 2021, according to the company’s year-end report.
Sales will likely continue to be hampered based on proposed changes with the U.S. Centers for Medicare & Medicaid Services. In its draft coverage decision, CMS noted that it would only cover the cost of Aduhelm and any required scans if they are involved in qualifying clinical trials. As BioSpace reported, those trials would need to “demonstrate a clinically meaningful benefit in cognition and function.”
