Chief Executive Michel Vounatsos will step down from the company as it downsizes and cuts spending by a billion dollars a year, and tries to chart a new course after Medicare’s devastating refusal to cover its new drug for cancer. Alzheimer’s disease Aduhelm.
Biogen said Tuesday that Vounatsos would continue to lead the company and remain on its board until the search for a new CEO is complete.
Biogen also said it will significantly eliminate the sales infrastructure it has built to support the launch of Aduhelm, which will contribute to further cost reduction measures intended to generate savings of $500 million per year. year.
The workforce reduction is in addition to the $500 million cost reduction program implemented by Biogen in December and brings the total annual cost reduction target to $1 billion.
Wall Street analysts have previously projected that Aduhelm would become a blockbuster, grossing billions of dollars in annual sales from some of the estimated six million people in the United States living with Alzheimer’s disease, the progressive neurological disease which progressively deprives patients of their memories and their autonomy.
But Biogen’s launch of the drug has exploded amid disagreement among doctors over its effectiveness, usefulness and cost, initially set at $56,000 a year before being cut in half in response to criticism from health groups. patients and others.
The Cambridge, Mass.-based company’s market value hit $62.5 billion in the days after Aduhelm was approved in June 2021, but has fallen more than 50% since then, majors insurers who refused to pay for the drug due to concerns about its effectiveness and side effects. .
Last month, Medicare’s parent agency said it would not routinely pay for Aduhelm unless patients enroll in clinical trials testing the drug.
Vounatsos was named CEO in 2017. His tenure was marked by the loss of patent protection for the multiple sclerosis pill Tecfidera, Biogen’s biggest product by sales; the launch of an innovative new therapy for infants with a rare disease called spinal muscular atrophy; and wild swings in Biogen’s share price depending on Aduhelm’s outlook.
Biogen’s head of research, Alfred Sandrock, who led the development of Aduhelm, resigned from Biogen last November after more than 20 years with the company.
Shares of Biogen rose 0.8% in premarket trading on Tuesday.
Biogen has reached “a tipping point, effectively throwing in the towel on Aduhelm and announcing a CEO transition,” RBC Capital analyst Brian Abrahams said in a note to clients. ” But [the] The strategy for the future remains somewhat vague…we believe these changes will be well received in the long term and will give the company a fresh start.
The company said it will continue to support assistance programs that will provide Aduhelm free to US patients already taking the drug.
Biogen also said it would continue to fund ongoing Aduhelm studies and the start of a planned new clinical trial that was mandated by the Food and Drug Administration as a condition of the drug’s approval last year.
A number of companies, including Biogen, are developing treatments for Alzheimer’s disease similar to Aduhelm, a monoclonal antibody that targets the reduction of a protein called amyloid in the brain. Some researchers believe that amyloid buildup plays a key role in Alzheimer’s disease.
Biogen and its partner Eisai Co.
are collaborating on lecanemab, an investigational Alzheimer’s drug, and plan to file with the FDA for accelerated approval in the second quarter, Biogen said. Aduhelm has also been approved under accelerated approval, which allows the FDA to approve treatments for serious conditions before they are fully proven to be effective.
The companies expect a late-stage Phase 3 study of lecanemab to be completed in the fall of this year, and Eisai expects to seek full drug approval in the first quarter of next year. said Biogen.
Write to Joseph Walker at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8