Biogen Idec to Cut Jobs, Boost External Focus

BIOTECHNOLOGY

Biogen Idec has announced "a bold reshaping" that aims to reduce annual operating expenses by $200 million to $300 million.

The restructuring includes the elimination of 17% of Biogen's workforce, or 650 jobs. The company will take a job-cut-related pretax charge of $30 million to $40 million. Separately, the company announced the departure of Michael Gilman, its executive vice president of research.

At the same time, according to a spokesman, the company is "shifting more resources to be externally focused," including collaborations with other firms and academic institutions. Starting in 2006, approximately $200 million annually will be earmarked for business development and external research, up from $50 million this year.

The firm says it will keep its focus on immunology, neurology, and oncology, remaining "open to both small and large molecules." While Amevive, Biogen's psoriasis drug, is now up for sale, the company says it remains committed to its two $1 billion drugs: the non-Hodgkin's lymphoma drug Rituxan and the multiple sclerosis treatment Avonex.

The restructuring is Biogen's second major move following the February withdrawal of the MS drug Tysabri after a patient died from a rare brain infection. In June, the firm sold an underutilized biopharmaceutical plant in Oceanside, Calif., to Genentech for more than $400 million.

As part of the new action, Biogen is selling a separate property in Oceanside and its clinical manufacturing facility in San Diego. The company still has manufacturing plants in Research Triangle Park, N.C., and Cambridge, Mass. A plant in Hillerød, Denmark, is under construction and set to open in 2008.