Biogen on Tuesday said it expects to cut approximately 1,000 jobs, or about 11% of its workforce, to save costs as the biotech company prepares to launch its newly approved Alzheimer's drug Leqembi.
It's the latest round of layoffs after Biogen slashed nearly 900 jobs last year. It had 8,725 employees worldwide as of the end of 2022.
The job cuts are also part of the company's ongoing cost-cutting and reorganization plan, which also involves shaving down its research and development pipeline to prioritize Leqembi and other drugs. Biogen, in its second-quarter earnings report, said that R&D pipeline prioritization is "substantially complete."
The larger plan is expected to generate approximately $1 billion in gross operating expense savings by 2025, according to Biogen.
About $300 million of those savings will be reinvested into product launches and R&D programs.
The company also said the plan will result in $700 million in net operating expense savings by 2025.
Biogen's stock was down more than 3% in early trading Tuesday.
The new layoffs follow landmark approvals of Leqembi and the company's ALS drug Tofersen this year.
Investors are pinning their hopes on the new medicines as Biogen's blockbuster multiple sclerosis and spinal muscular atrophy treatments face fierce competition from cheaper versions and similar drugs.
Biogen CEO Chris Viehbacher said during an earnings call that the cost-cutting plan is "an opportunity really to make sure that this year, before we get into the product launches, that we are truly fit for growth."
"There are an awful lot of patients who depend on Biogen products," he said during the call. "There's a need, obviously, to have a strong investment in our new product launches. It's important, clearly, to manage costs, but shareholder value is most optimized if we can really make a success of these launches."
Wall Street analysts were pleased with the layoff announcement.
Wells Fargo analyst Mohit Bansal said in a Tuesday research note that the broader cost-cutting plan is "in line with our expectations and was the reason for our bullish stance on the name."
"We expect the stock to be up on this news as investors were waiting for this move," he said.
Biogen on Tuesday also reported second-quarter revenue and adjusted earnings that topped Wall Street's estimates.
Biogen posted $2.46 billion in revenue for the quarter, down 5% from the same period a year ago. Analysts had expected second-quarter sales of $2.37 billion.
The company reported net income of $591.6 million, or $4.07 per share. That compares with net income of $1.05 billion, or $7.24 per share, from the same period a year ago. Excluding certain items, adjusted earnings per share were $4.02 for the period. Analysts had expected adjusted earnings of $3.77 per share.
Biogen also reiterated its full-year guidance. The company is forecasting a "mid-single digit percentage decline" in 2023 revenue compared with last year, and full-year adjusted earnings of $15 to $16 per share.