Biogen ($BIIB) will sell or close a manufacturing plant at its headquarters in Cambridge, MA, shedding up to 285 jobs, moving the work there to a more efficient plants in its network.
In an email, Jason Glashow, Biogen’s senior director of corporate communications, confirmed a Boston Globe report and said the biotech is in active negotiations to sell the facility and its capabilities and expects to have a decision by early fall. He said 250 to 285 employees would be affected.
“Our goal is to find a partner who will take over the facility, and retain the employees,” Glashow said. “If a sale is unsuccessful, we intend to close the facility by the end of 2016.”
The decision was made because of significantly improved manufacturing productivity at the company’s other facilities over the past several years, Glashow said. He said that its facility in Research Triangle Park, NC, has large scale manufacturing and clinical manufacturing capability, that provides greater efficiency and flexibility. That facility, however, will not add jobs as the result of the moves. Biogen will work to complete projects and transition the manufacture of the medicines produced in Cambridge to other facilities over the course of the next year.
Biogen made the announcement now to give employees time to prepare in the event a buyer is not found. Employees will get relocations when possible and those that lose their jobs will be given support like placement services. While manufacturing jobs will be lost, Glashow said Biogen “expects to continue to grow in Cambridge as our business continues to invest in R&D and bring potential breakthrough therapies in our pipeline to market.”
The drugmaker last fall announced it would eliminate 11% of its workforce, about 880 jobs, to save $250 million in annual operating expenses. It said plans were to plow the extra money into its “key commercial initiatives.” At the time, CFO Paul Clancy told investors that manufacturing was one target of its resizing. Glashow said today that effort was essentially completed by the end of last year.
Biogen’s cost-cutting efforts did bear fruit in Q1, with non-GAAP EPS of $4.79, trouncing consensus estimates of $4.44. Tecfidera brought in sales in line with consensus, notching $946 million for the quarter.
But the drugmaker has been dealing with other disappointments. Last week it reported its multiple sclerosis hopeful opicinumab missed the primary and secondary efficacy endpoints in a Phase II trial. Instead of writing it off, however, Biogen said it was digging into the data, raising the prospect that it will continue look for success.
All of this have steadily eroded Biogen’s share price. Shares were trading midmorning at $241.30, which are down from about $250 a share in January and off a 52-week high of $420.99.
by Eric Palmer | Jun 17, 2016