Biogen begins cutting jobs following disastrous debut of its Alzheimer’s drug

The Cambridge biotech isn’t saying how many people will be laid off as part of its plan to trim at least $500 million in spending.

Biogen's headquarters in Cambridge.Steven Senne/Associated Press

Biogen confirmed reports that it has begun laying off employees as the future of its beleaguered Alzheimer’s disease drug looks increasingly bleak.

The company would not disclose the scale or scope of the layoffs, but Endpoints News reported that Biogen had already let go 100 employees, according to a senior official at the Cambridge biotech.

That headcount is likely just a small fraction of the total layoffs to come. In December, STAT News reported that the company could cut more than 1,000 employees early this year as part of a restructuring plan that could save the company $500 million or more annually.

Biogen had about 9,600 employees worldwide at the end of 2021. That included about 2,800 in the state, according to the Massachusetts Biotechnology Council.

Ashleigh Koss, a Biogen spokeswoman, said “the $500 million cost savings will not be entirely driven by headcount.”

She added that “as part of our headcount reductions we’ve prioritized not fulfilling open positions,” and that “some employees will be able to apply for the open positions we are filling.” The company had more than 450 job openings posted on its website Thursday, including 158 at its Cambridge headquarters.

Biogen’s problems began immediately following the Food and Drug Administration’s approval of its Alzheimer’s drug, Aduhelm, last July, despite a recommendation against it by a panel of outside experts. Many neurologists said they doubted that the drug worked, and even generous interpretations of the company’s controversial clinical data suggested that Aduhelm only slightly slowed the course of dementia in people with mild disease.

Although the $56,000 per year price tag — later reduced to $28,200 amid a flood of complaints — was steep for a drug that was far from a cure, doctors feared that they would be faced with a rush of patients eager to try anything that might stall the progression of the debilitating disease.

But demand for the treatment has been lower than anyone expected, including Biogen, as insurers said they would not cover Aduhelm, and major hospital systems declined to administer it.

Biogen spent $480 million on expenses related to Aduhelm last year, but only reported $3 million in sales, a far cry from the billions the company originally expected to rake in over the long run.

Some neurologists chalk the slow sales up to the continued controversy surrounding the drug, including federal investigations examining whether FDA officials inappropriately collaborated with Biogen to get it approved.

Lingering questions about whether the medicine will eventually be covered by insurance are likely a bigger driver of Aduhelm’s ambling sales. The preliminary decision from Centers for Medicare & Medicaid Services to cover the cost of Aduhelm only for people in clinical trials has effectively prevented the majority of eligible patients from getting it. As a result, Biogen now “assumes minimal” revenue from Aduhelm in 2022.

Even though the drug has been a commercial flop, its inventor, a small Swiss company called Neurimmine, made out with a tidy sum of $100 million paid out by Biogen upon the drug’s approval. Biogen licensed the antibody drug that would become known as Aduhelm from Neurimmune in 2007.

Biogen plans to continue testing Aduhelm in new clinical trials that could finally prove just how well the drug works, if at all, but results are years away.

The company Thursday would not provide details about which employees it would cut, only that layoffs were part of a broader strategy to save money.

“As previously shared, Biogen is implementing cost-reduction measures that are expected to yield approximately $500 million in annualized savings,” the company said in a statement.

“In support of these measures, some of our colleagues in the U.S. were recently informed that their roles are being eliminated. These changes will help the company remain flexible so additional investments can be made in our pipeline and other strategic initiatives.”