Biogen ($BIIB) is in the midst of a wide-ranging reorganization that will send more than 800 employees out the door, but the company isn't backing away from its penchant for high-risk R&D, pressing forward with a pipeline focused on first-in-class therapies.
The company detailed its overall research strategy at its R&D day Tuesday, maintaining its commitment to "avoid incremental gain" as it pours money into programs directed at Alzheimer's disease, multiple sclerosis and other neurological diseases. Biogen's latest cuts, announced last month, came alongside a pruning of the pipeline and are meant to save the company about $250 million each year, and management has promised to put some of that cash into its next generation of therapies.
Leading the way is anti-LINGO-1, a treatment for MS that promises to reverse the disease's characteristic damage to nerves, something no other agent has done. In a Phase II study disclosed in April, Biogen's treatment met its main goal of improving nerve function in patients with a destructive eye disease that, despite having no relationship with MS, also damages nerve tissue and thus provided a worthy surrogate, the company said. Now Biogen is working through a second mid-stage anti-LINGO-1 study in MS, expecting to post results next year.
Biogen has watched its home commercial turf of MS slowly erode over the past few years, as the oral treatment Tecfidera has failed to keep pace with analyst expectations and competition from Novartis ($NVS) and Sanofi ($SNY) has crowded the space. Roche ($RHHBY) is nearing an FDA submission with a treatment, formerly partnered with Biogen, that boasts a safety and efficacy profile analysts say could upend the MS market. Those changing winds make anti-LINGO-1, while years from launch, an especially important bet for Biogen as it works to maintain its profile in MS.
However, the company's highest profile pipeline gambits are all in Alzheimer's, where Biogen made headlines over the summer with some early data from a small study. Most advanced is aducanumab, a much-hyped beta-amyloid antibody now in Phase III. Behind that is BAN2401, a Phase II antibody with the same target, and E2609, a BACE inhibitor also in mid-stage development. Biogen is looking at its trio of Alzheimer's as an interrelated portfolio, hoping to establish aducanumab as the first disease-modifying treatment ever approved--no small feat--and then mounting combo studies to see if its anti-neurodegeneration effects can be heightened by mixing and matching therapies.
Biogen's recent cuts helped the company make good with Wall Street after months of commercial disappointment had dragged down its market value, but any long-term bullishness relies on the assumption that CEO George Scangos and his team can come though on some moonshot research projects. The rewards of a first-in-class Alzheimer's treatment or nerve-rebuilding MS drug would be massive, but building a pipeline around such risky bets also creates the potential for crushing failure. Some companies are content with a bit of "incremental gain."
Outside of MS and Alzheimer's, Biogen is developing an Isis Pharmaceuticals ($ISIS)-partnered treatment for spinal muscular atrophy, now in Phase III; and, thanks to a deal with Mitsubishi Tanabe, a Phase III-ready drug for inflammatory bowel disease.
- read Biogen's slides