Biogen to cut 880 jobs and end several research projects in company restructuring

The largest locally-owned drug maker in US Biogen stated that it will cut 11% of its workforce worldwide. Having about 8,000 employees, Biogen will cut about 880 jobs in global, including 400 jobs in its home state, Massachusetts.

The company also stated that it plans to end several research programs in a restructuring driven by slower sales growth. It said that restructuring move, as reported on Bizjournals, will save about $250 million in a year which will be invested back for other drug research projects.

The world's largest multiple sclerosis drug maker will end the clinical study of its top-selling drug, Tecfidera, after disappointing trial results. It will also discontinue the development of therapies to threat Lupus Nephritis and Immunology and Fibrosis research.

The company has also dropped a research of another multiple sclerosis drug, Tysabri, which treats patients with relapsing-remitting multiple sclerosis, due to its failure in treating secondary progressive multiple sclerosis. Researchers that involved to those programs will lose their jobs along with managers, staffs, sales, and manufacturing employees.

Biogen will concentrate on high-risk programs that promise high rewards, according to Reuters. The programs include late stage development of Alzheimer's disease drug, Aducanumab. The drug was reported to cause brain swelling as its side effect. The company stated that the coming research may discover a way to reduce the effect.

The other programs that will be Biogen's new research concern are two other research on Alzheimer drugs, anti-lingo drug that aims to repair nerve damage caused by multiple sclerosis and one research on drug for spinal muscular atrophy.

To cover the cost of restructuring, Biogen will take a charge of $85 million to $ 95 million, mostly in the fourth quarter of this year.

The company also reported third-quarter revenue which largely exceeded analyst expectations.

The Wall Street Journal reports that the profit rose 13% to $965.6 million, or $4.15 a share, in the third quarter, up from $856.9 million in the sale period a year ago. Its sales increased to $2.78 billion from $2.51 billion.

Biogen sales on Tecfidera reached $937 million in the third quarter of this year. Its exceed the expectations of about $895 million.

Its shares rose 4% to $276.34 on the Nasdaq stock exchange. Although the stock has fallen more than 15% this year, but Biogen's still the highest among Massachusetts companies with the market value of more than $60 billion.

Its expected that the company profit will grow 8% to 9% from a year ago, up from its predicted of 6% to 8%. The company also raised its outlook on per-share earnings of $16.20 to $16.50 from the prediction of $15.50 to $15.95.