The CEO built the strategy of the US group on the “Swiss” drug. That went wrong. Biogen’s rigorous austerity measures point to deep-seated problems.
Michel Vounatsos resigns as CEO of Biogen.
The blockbuster has become a kingslayer. Biogen’s CEO, Michel Vounatsos, has to step down. The fact that the change at the top is announced before a successor is found is almost the maximum penalty. The fate of the Frenchman, who managed the US biotech giant from 2017, is closely linked to the Alzheimer’s drug Aduhelm. Vounatsos built the company strategy around the drug developed by Neurimmune from Schlieren. This strategy has failed.
A billion slashed
Aduhelm was approved less than a year ago. The US health authority had decided against the recommendation of its external advisory commission. Despite these caveats, Biogen set the annual cost of treatment for US patients at $56,000. After heavy criticism, the company had to halve the price. The public health insurance for older US citizens made a big spanner in the works for Biogen – the drug was not approved in Europe. The insurance only covers the costs for patients with “mild” symptoms of Alzheimer’s if they are also taking part in clinical studies.
In the first quarter, Aduhelm’s revenue was just $2.8 million and inventory write-downs were $275 million. To better get through the looming lean years, Biogen is cutting the Aduhelm distribution organization in a bid to save $500 million. The group had already announced restructuring at the end of 2021, which should also lead to savings of 500 million dollars.
Selling without a sales team?
But the dismantling of the sales organization is amazing. Biogen, along with partner Eisai, has another Alzheimer’s drug in the pipeline. In June, the health authority is to grant the drug an accelerated approval process. In this case, a sales license could already be available in the first half of 2023. The same sales organization that was also planned for Aduhelm could be used for this drug, called Lecanemab. The dismantling of this organization is interpreted as a sign that doubts have also arisen about the potential of the second Alzheimer’s drug.
The austerity measures are also likely to cause unrest in Zug at Biogen’s international headquarters and at the newly created production site in Luterbach, Solothurn. The management has emphasized several times that the cost-cutting measures have no impact on production in Luterbach. But in the long term, the plant in the canton of Solothurn will only run smoothly if Biogen has a product range that is also in demand on the market.