Biogen to Spin Off Hemophilia BusinessBy
Biogen Inc. has announced that it intends to spin off its hemophilia business as an independent, publicly traded company. The strategic goal of this transaction is to create two focused companies dedicated to driving current and future value in their respective therapeutic areas of expertise.
“We expect that the new company will be a leader in discovering, developing, and commercializing innovative therapies for hemophilia, built on remarkable science and a deep understanding of how to continually improve treatment for patients,” said George Scangos, Biogen's chief executive officer, in a company release. “Our expanding hemophilia business continues to perform very well. Eloctate and Alprolix provide meaningful benefits for people living with hemophilia and continue to gain market share. We believe that the best way to realize the full potential of this growing and vital business is to enable it to operate independently with a management team dedicated to providing therapies to people living with hemophilia.”
The new company, to be named at a later date, will focus on the discovery and development of therapies for the treatment of hemophilia, with existing marketed products to include Eloctate and Alprolix, indicated for the treatment of hemophilia A and B, respectively. The new company is expected to continue to develop and commercialize Eloctate and Alprolix under Biogen’s existing collaboration agreement with Swedish Orphan Biovitrum AB. Eloctate and Alprolix generated combined revenues of $640 million during the twelve-month period ended March 31, 2016.
The new company plans to bring longer acting therapies using the XTEN technology into clinical development in the first half of 2017 and to accelerate the development of bispecific antibodies and hemophilia-related gene therapy programs. The new company also plans to conduct additional studies to confirm early data that suggest Eloctate’s potential to rapidly induce immune tolerance in hemophilia patients who develop inhibitors.
John G. Cox, Biogen's current executive vice president, pharmaceutical operations & technology, will serve as the chief executive officer of the new company. Mr. Cox joined Biogen in 2003 and has held several senior executive positions, including senior vice president of technical operations, senior vice president of global manufacturing, and vice president of manufacturing and general manager of Biogen's operations in Research Triangle Park, North Carolina. In his time at Biogen, Mr. Cox has been closely involved with the hemophilia business, spending five years in the manufacturing of Eloctate and Alprolix, and two years in launching and commercializing these products. Most recently, Mr. Cox also served as the interim head of Biogen's commercial organization.
The new company is expected to be headquartered in the Boston area. The new company will retain commercial rights for Eloctate and Alprolix for North America and for rest of the world markets outside of, essentially, Europe, North Africa, Russia and certain countries in the Middle East. Biogen is expected to provide transition services to the new company for some period of time and is expected to remain the manufacturer of Eloctate and Alprolix for the next three to five years. The full management team and board of directors of the new company will be named at a later date.
Biogen's board of directors has authorized management to proceed with a plan to spin off its hemophilia business. The spin-off is planned to be completed by the end of 2016 or early 2017, subject to the satisfaction of certain conditions, including, among others, final approval of Biogen's board of directors, receipt of a favorable opinion with respect to the tax-free nature of the transaction, and the effectiveness of a Form 10 registration statement that will be filed with the US Securities and Exchange Commission. The spin-off is expected to be accomplished through a distribution of shares of the new publicly traded company to Biogen stockholders, in a transaction intended to be tax-free for US federal income tax purposes.