To be better at neuroscience, Biogen will invest outside the therapeutic area

To be a better neuroscience company, Biogen is going to have to diversify—outside of the therapeutic area that has in recent years defined the company.

“We always call ourselves a neuroscience company, but the reality of neuroscience is that this is a high-risk area,” CEO Chris Viehbacher said on the drug developer’s first-quarter earnings call Wednesday morning.

And so Biogen will be focused on business development outside of the neuroscience arena, which in turn, will support the expensive, lengthy trials required of the beat.

“While we remain committed to neuroscience, my personal view is that is not diversified enough for a company of our size,” the CEO said.

Biogen already signaled a foray into rare disease last year, where Viehbacher said the company has “tremendous commercial capability.” Thanks to the slow buildout of Leqembi in Alzheimer’s disease, Biogen knows a thing or two about launching medicines in difficult areas where diagnosis is a challenge and hurdles with payers are rampant. Viehbacher also sees further potential for expansion in multiple sclerosis.

“We are very well placed in neurology … but the reality is that we sit there with programs that are very difficult to predict, very expensive, very long-running. And when you actually look at the ability to do external deals, that field is also very narrow. There's just not that many people working in the CNS space,” Viehbacher said. “So we're by no means abandoning it. The fact that we go after these really tough diseases is really a source of pride within Biogen.”

He continued: “But the reality is we need to have more predictable results out of R&D.”

Biogen's industry peers have found plenty to buy in the space. Bristol Myers Squibb bought Karuna Therapeutics and its schizophrenia med KarXT for $14 billion while AbbVie picked up CNS-focused Cerevel Therapeutics for $8.7 billion, all at the end of 2023. 

Speaking of deals, Biogen is unlikely to take on a huge acquisition this year, given the company’s balance sheet, the CEO said. “If something really extraordinary came along, you’d look at it,” he said.

Chief Financial Officer Michael McDonnell said the balance sheet is “in a very good spot” in terms of net debt for the first quarter. He says there’s about $4 billion to $5 billion to play with for an acquisition target. In 2025 or beyond, that number could grow.

As for the pipeline, the executives had little to report with respect to concrete data, but Viehbacher promised more to come as three key readouts draw closer. A big one is Biogen’s anti-tau agent for Alzheimer’s disease called BIIB080, followed by phase 3 assets dapirolizumab pegol and litifilimab, both for systemic lupus erythematosus.

Biogen has developed some tough go-no-go criteria to ensure those programs are only advanced if they prove promising, said Priya Singhal, M.D., head of development.

“I think the next job is really now to build out the pipeline,” Viehbacher said. “We want to diversify our business a little bit more than we have in the past.”