Biogen’s significant internal cost-cutting efforts have not deterred an aggressive hunt for deals, but CEO Chris Viehbacher doesn’t want infatuation to cloud necessary judgment.
On a second-quarter earnings call Tuesday, Viehbacher said that business development remains front and center on Biogen’s to-do list. But it has to be complementary to a company that’s made notable market inroads in multiple sclerosis and now Alzheimer’s disease.
“You do have to go look, and you’re going to have to go look at a hundred things before you find something that really works and that’s what our teams are doing,” said Viehbacher. He added that the “worst thing you can do is fall in love with something” and thus, lose your ability to clearly assess value.
When asked whether or not this precludes absorbing a company or assets that would require a “heavy lift” on R&D, Viehbacher wryly suggested that Biogen already has plenty on its plate.
“I think we have enough heavy lift ... to be honest,” he said, though he added that the company is focused less on expenditure in business development and more on risk. He said a therapy that requires a multi-year phase 3 study is not the kind of collaboration Biogen is all that interested in. Viehbacher then highlighted a core strategy that appears to guide both internal and external R&D investment.
“The discipline to kill stuff that doesn't meet its milestones is something that is probably more important than anything else to managing R&D investments,” he said.
Viehbacher’s measured explanation comes as the company is implementing another round of cost reductions, marked by layoffs affecting 1,000 employees. The new strategy is set to shave $700 million from R&D and selling, general, and administrative (SG&A) expenses by 2025. Chief Financial Officer Michael McDonnell suggested that “the savings from here” would be slightly more weighted toward SG&A costs, given that R&D has already been slashed.
“But ultimately, the savings will come from both sides,” McDonnell said.
The only disclosed change to the clinical pipeline this quarter came in June when Biogen and Denali announced they’d shift resources away from a phase 3 study of Parkinson’s candidate BIIB122 and toward a phase 2b study. A spokesperson for Biogen said the company does not disclose preclinical changes.