Biogen has announced a corporate restructuring, which includes the termination of a number of pipeline programs and an 11% reduction in workforce. The company made the announcement as part of its third-quarter earnings announcement. These changes are expected to reduce the current annual run rate of operating expenses by approximately $250 million. The company plans to reinvest these savings to support key commercial initiatives, including increased sales and marketing activities behind its multiple sclerosis (MS), Tecfidera (dimethyl fumarate), and the advancement of high potential pipeline candidates in areas such as Alzheimer's disease, multiple sclerosis, and spinal muscular atrophy.

The company plans to substantially complete the majority of the 11% reduction of its global workforce by the end of 2015. The company is in the process of notifying employees affected by the restructuring, and has initiated the required consultation processes in European countries where employees may be impacted. Biogen has also discontinued several programs, including its Phase III program for Tecfidera in secondary progressive MS, the development of anti-TWEAK in lupus nephritis, and certain activities in immunology and fibrosis research.

Implementing these changes is expected to reduce the current annual run rate of operating expenses by approximately $250 million. Biogen expects to incur a charge of approximately $85-$95 million, primarily in the fourth quarter of 2015. Additionally, the company plans to identify additional savings in non-labor expenses by the end of the year.

Biogen reported third quarter 2015 revenues of $2.8 billion, an 11% increase compared to the third quarter of 2014. Total multiple sclerosis product sales were $2.2 billion compared to $2.1 billion in the same quarter last year. Tecfidera revenues were $937 million compared to $787 million in the same quarter last year. Interferon revenues, including Avonex and Plegridy, were $785 million compared to $745 million in the same quarter last year. Revenues of Tysabri (natalizumab) were $480 million compared to $501 million in the same quarter last year.

Overall, Non-GAAP net income attributable to Biogen for the third quarter of 2015 was $1.0 billion, an increase of 16% over the third quarter of 2014. On a reported basis, GAAP net income attributable to Biogen for the third quarter of 2015 was $966 million, an increase of 13% versus the same period in the prior year.

Source: Biogen