Biogen to cut 11% of its workforce

Biotech company Biogen announced plans Wednesday to cut 11 percent of its workforce as it reallocates research dollars and boosts its marketing budget.

Biogen, which employs 7,550 people, said it was in the process of notifying employees and meeting regulatory requirements for cutting staff in Europe. Biogen has halted some research into treatments for secondary multiple sclerosis (MS), lupus and some other ailments.

Biogen did not release a figure for job cuts, but 11 percent would amount to about 830 jobs.

"The decision to reduce the company's workforce was extremely difficult, but we believe these actions are necessary to fulfill our mission of bringing important new medicines to patients," said chief executive George Scangos.

"We have several high-quality programs that are now or soon will be in Phase 3, and the cost savings from the restructuring will be reinvested to carry out those programs aggressively and hopefully to bring them to patients as quickly as possible."

Biogen expects the job cuts to result in a charge of $85-$95 million, mostly in the fourth quarter. The job cuts will reduce annual expenses by about $250 million.

Biogen plans to use the additional funds to advance its drug-development pipeline for Alzheimer's disease, MS and spinal muscular atrophy and boost marketing of the MS drug Tecfidera, its top-selling medication.

Sales of Tecfidera rose to $937 million in the third quarter, up 19.1 percent from the year-ago period and an improvement on second-quarter sales, which lagged expectations.

A note from Jefferies praised Biogen's plans for Tecfidera, calling the sales results "reasonably healthy" and praising a decision to boost marketing around the drug.

Biogen reported third-quarter earnings were $966 million, up 12.7 percent from the year-ago period. Revenues rose 10.6 percent to $2.8 billion.

In late trade, Biogen shares jumped 4.1 percent to $276.60.