Biogen is moving to scale back its real estate footprint in Kendall Square and in Weston, as the Cambridge-based biotech company aims to cut $1 billion in costs in the wake of a disastrous rollout of its Alzheimer’s drug Aduhelm.
Biogen is looking to sublease more than 183,000 square feet at 300 Binney St. in Cambridge — across the street from its headquarters — and is also subleasing two floors, or 80,000 square feet, at one of its two properties at 133 Boston Pond Road in Weston.
Biogen leases a combined 1.157 million square feet across the Commonwealth, and owns an additional 508,000 square feet in Cambridge. It has long subleased one of its two Weston buildings to job-search website Monster.
Ashleigh Koss, a spokesperson for the company, said the decision to sublease office space in Kendall Square and Weston is “part of Biogen’s overall implementation of the ‘Future of Work,’ which is allowing us to optimize our footprint and reduce the amount of space we occupy, taking into consideration new elements such as the hybrid work model.”
The sublease news was first reported by the Boston Business Journal.
The volume of real estate developed for life-science companies in Greater Boston has grown at an astonishing rate in the past decade, particularly as many in the industry flock to Cambridge’s Kendall Square. Many traditional commercial developers are now looking to convert vacant or underutilized office space into lab space as the long-term forecast for office demand remains unclear. Still, new office buildings in Kendall Square have typically filled quickly.
Life-science vacancy rates increased in the last quarter for the first time since the COVID-19 pandemic came to the US, a move that was primarily driven by companies making space available for sublease, according to a recent report from real estate brokerage CBRE.
“Most of these spaces have been added strategically, for a short one to three year term, which allows sublandlords to grow into the space over time. A few companies have added their space to the sublease market due to relocating to a new space,” the CBRE report states. “A handful of companies have hit hard times, as their space has been added to the market due to financial troubles and forced layoffs.”
Biogen’s decision to shrink its local footprint doesn’t come as a complete surprise, given the disastrous rollout of Aduhelm, one of the biggest flops in recent pharmaceutical history.
So far this year, Biogen has announced that it will cut an estimated $1 billion in costs and make an unspecified number of layoffs, including essentially its sales division for Aduhelm. As of the end of last year, the company had 9,610 employees worldwide.
Biogen had previously confirmed plans for layoffs — as many as 1,000 workers, STAT reported in March. Koss on Tuesday declined to give an updated headcount. In addition to layoffs, Biogen has allowed some vacant positions to go unfilled, she said.
In another example of Aduhelm fallout, Biogen chief executive Michel Vounatsos announced in May that he would be stepping down after more than five years running the company. His announcement came just months after the biotech’s former top scientist, Al Sandrock, was ousted following Aduhelm’s tumultuous launch, according to STAT.
Once considered a potential multibillion dollar blockbuster, Aduhelm was approved by the Food and Drug Administration in June 2021, the first new Alzheimer’s medicine in nearly two decades.
The drug is designed to remove plaques made up of amyloid-beta proteins that build up in the brains of some people with Alzheimer’s, the most common form of dementia. The FDA granted it accelerated approval based on the medicine’s undisputed ability to clear amyloid, although neurologists disagree whether doing that actually benefits Alzheimer’s patients.
The approval came after an independent scientific advisory panel to the FDA voted 10-0 to recommend the drug be rejected, with one panelist voting “uncertain.” After the FDA brushed aside that vote, three committee members resigned in protest, including Dr. Aaron Kesselheim, a Harvard Medical School professor who called the approval “perhaps the worst” drug authorization by the agency in recent history.
Given Aduhelm’s questionable benefits and its initial price tag of $56,000 a year, major hospital systems around the country, including Mass General Brigham, refused to offer it to patients, and private insurers said they wouldn’t cover it.
Then in April, the Centers for Medicare & Medicaid Services dealt Aduhelm a death blow. The agency announced that the federal government would only pay for the drug for patients if they participated in clinical trials, where risks and benefits could be better assessed. It was an extraordinary decision, given that the federal insurer almost always pays for drugs that the FDA has approved.
Biogen, which specializes in medicines to treat disorders of the central nervous system, including multiple sclerosis, is testing another amyloid-busting Alzheimer’s drug called lecanemab. Results of the late-stage study are expected in the fall.