Biogen Idec's ($BIIB) decision to replace a group of 20 R&D staffers in chemistry and neurology wasn't the first internal staffing adjustment at the biotech trendsetter. Biogen Idec axed about 21 staffers last fall in a reorganization of its R&D quality and compliance group, according to sources close to the terminations. That move back in September of 2014 followed by the more recent R&D firings has raised concerns that more such restructuring-by-department lies ahead.
"At a high level, compliance activities were split up and absorbed by Clinical Operations and Clinical Development," noted one person close to the reorganization. "They are now managing GCP quality and procedural/documentation/training, etc. of overall quality. The announcement indicated that they want to build out a quality by design QMS (quality management system) over the next several years."
"Small clusters of reorganizations have been going on across all departments for the last year or so," the individual continues. "We would find out someone is gone through word of mouth. For this reason, the frequency which it happens and the partnership with the CRO, I think everyone expect that any department can be impacted, but perhaps only a few selected in the group would be let go."
|Biogen Chief Medical Officer Al Sandrock|
Another person close to the move last fall tells me that Chief Medical Officer Al Sandrock outlined plans to create a "Biogen Idec Version 4.0" at an offsite company meeting last spring. "They want a leaner team," says one source, looking to outsource more jobs. Several staffers were terminated and then hired by outside contractors, going back to work with Biogen as consultants. And staffers are wary that the efficiency focus will spur upcoming cuts, fearing more workers will face the ax later in the year.
On September 9, Sandrock sent out a company-wide memo about the new "R&D Quality & Compliance organization," which was obtained by FierceBiotech. "Several factors are driving this change," he noted, "including increasing regulatory scrutiny, a complex global regulatory environment and a historically reactive and risk-averse approach to R&D Compliance….
"We communicated the organizational and staffing changes resulting from this reorganization to the R&D compliance group today," Sandrock added in the memo. "Affected employees have been offered severance packages and outplacement services to help with their transition from the company. Please support your colleagues during this difficult time…We believe these changes are a crucial step toward helping us achieve high quality and industry-leading execution of our pipeline."
I asked Biogen Idec's spokeswoman, Kate Niazi-Sai, how many people had been fired at Biogen Idec over the past year, whether the recent firings reflected a broader efficiency campaign, whether more firings were anticipated and if any of the people who had been let go during the reorganizations were brought back as consultants at an outsourcing firm. This was her reply:
"The truth is that we are growing, not downsizing. Our overall R&D staff grew every year for the last three years, and we anticipate growing R&D headcount in 2015. We are evolving as a company, increasing our discovery research capabilities while continuing to apply resources to advancing our pipeline. We continually review our operating model to ensure we have the right people and capabilities in place to make meaningful advances in medicine. At this time, we have no additional details to add."
The hit in clinical operations, quality and compliance was followed late last week by Biogen's decision to ax 20 staffers engaged in chemistry and neurology. A spokesperson for the company emphasized then that Biogen was not downsizing R&D, noting that they planned to attract fresh talent to fill those spots after finishing an internal review of the company's skill sets.
"As we plan for the future, we took a close look at our chemistry and neurology research teams and determined that some skillsets did not align with our long term goals," the company said in a statement sent to FierceBiotech last week. Unfortunately, as part of this assessment some employees will be leaving Biogen Idec. We sincerely appreciate their contributions and are taking meaningful steps to support their transition and help them find their next career opportunity. We plan to hire new employees in both areas to ensure we have the right capabilities to execute on our longterm strategy." The company made no mention of the earlier terminations.
The industry has seen a number of much larger and more painful restructurings in recent weeks and months, from a wholesale do-over at GlaxoSmithKline's ($GSK) U.S. R&D operations to cutbacks at Sanofi ($SNY), Amgen, Pfizer ($PFE) and more. Biogen's position, though, is significantly different, coming off some big new approvals with closely watched drugs in the clinic.
Biogen Idec's sales have been surging as its blockbuster MS drug Tecfidera gobbled up market share and the company consolidated its leadership position in MS while gaining new approvals in hemophilia. The company has disappointed Wall Street at times, failing to match analysts' projections on Tecfidera's sales growth, but revenue last year jumped to $9.7 billion, a hefty spike from $6.9 billion in 2013. -- John Carroll (email | Twitter)