Since Christopher Viehbacher took the reins of Biogen in 2022, he has launched a USD 1 billion cost-cutting and priority refocusing plan, made significant deals, and launched the firm’s Alzheimer’s drug Legembi. But snags slowing the uptake of the Eisai-partnered med and the fall in sales of its multiple sclerosis therapies, however, have caused Biogen to downgrade its 2025 profit forecast.
Priority Shift
Biogen CEO Christopher Viehbacher has made some tricky moves since he took charge three years ago. The former Sanofi CEO has aimed to adjust the biotech’s priorities and spending to reflect failing areas and promising new drugs coming up for launch. At the same time, he has led an attempt to pick up promising therapies through acquisitions.
The strategy, according to Viehbacher, is still in process and while it has yielded some results, Biogen has faced several setbacks. “Our financial discipline has enabled a restructuring of our operating expenses with a reallocation of resources toward potential future growth drivers. We believe that continued execution against these key strategic elements, as well as a disciplined approach to business development, will allow us to generate long-term value for our shareholders,” he said upon the announcement of the Massachusetts-based firm’s fourth quarter and 2024 full year results.
While Biogen did post fourth quarter revenues and profits that exceeded expectations, the company has adjusted its 2025 earnings outlook to between USD 15.25 and USD 16.25 per share. This fell short of the originally forecasted USD 16.34 per share, switch the company saying that it was expecting a decline of a “mid-single digit” percentage in 2025 compared to 2024. And this is just the latest hurdle for Biogen.
MS Decline
Despite launching the “Fit for Growth,” plan in 2023 to save some USD 1 billion in operating expenses and cutting some 1,000 jobs soon after coming onboard, Viehbacher faced slowing revenues from Biogen’s multiple sclerosis (MS) products, already down by 15 percent in the second quarter of 2023 with respect to the previous year. “While we will be making significant investments in our newly prioritized pipeline and new product launches, we will also need to invest less in other areas which are no longer growing. With these changes, I believe that Biogen will be better positioned to maximize its growth opportunities going forward,” he said at the time.
The MS area of the Biogen business, while still producing profits, has been on the decline ever since. To make matters worse, the drugmaker is now looking at generic competition for its MS therapy Tecfidera. “What we’re all about in the near-term is trying to make sure that the revenue [from new products] can exceed the multiple sclerosis product decline,” Viehbacher said on an investor call.
The Alzheimer’s Breakthrough with a Catch
A huge advance for the company was the approval of its Eisai-partnered Alzheimer’s disease treatment Leqembi (lecanemab) in 2023. This followed the troubled launch and eventual discontinuation of a similar product for Alzheimer’s, aducanumab, in 2021. While the drug has given new hope to patients, slowing down some of the cognitive decline associated with the disease and potentially providing them more time to live normally, its complex rollout has hampered uptake. Issues such as reimbursement difficulties, diagnostic test requirements, and the need for regular brain scans have made Leqembi’s launch difficult. As a result, Biogen’s shares dropped by 42 percent over the course of last year while many investors abandoned ship and sold their shares in the company.
Leqembi did generate USD 87 million in revenue for the fourth quarter and at last month’s JP Morgan Healthcare Conference Viehbacher said the biotech would be “doubling down in Alzheimer’s,” citing the FDA filing for subcutaneous Leqembi due to come up for approval this year, and use of the drug as maintenance therapy.
New Horizons Through Dealmaking
In light of these challenges, Viehbacher has been under pressure to bring fresh options into Biogen’s pipeline through dealmaking. The USD 7.3 billion acquisition of rare disease outfit Reata in 2023 brought its lead asset Skyclarys, approved for the treatment of Friedreich’s ataxia (FA), onboard.
Pursuing further deals, Viehbacher recently made an unsolicited bid for Sage Therapeutics, its marketing partner on a postpartum depression therapy, but Sage’s board of directors have rejected the acquisition proposal.
Viehbacher recently denied the assumption that he would need to rely on dealmaking to completely turn the company around. “The view out there in the analyst community is that the future of Biogen depends on the next deal that we do and that’s not a view that we share inside Biogen.”
Photo: Biogen
