MY POINT: Success is always temporary. When all is said and one, the only thing you’ll have left is your character. Right now, I could make a great argument that Biogen’s character is trashed and that they are a company in dire need of authentic leadership.
Massive layoffs could be headed to due to the disappointing rollout of its Alzheimer’s drug Aduhelm that generated only a few million dollars in revenue over the past two quarters. The company could lay off as many as 1,000 employees as it deals with the controversial treatment.
When George Scangos resigned in 2016, he must have known that the future was bleak. The company was riding high on their MS drugs, but the competition was on the way. Biogen went from being agile biotech to big pharma. They spent millions on a new corporate campus in downtown Cambridge and believed their PR.
Trouble was on the way, though. The MS community, which is very active on social media, complained about the side effects of Biogen’s drug while praising new competitors’ drugs. Some saw the answer in a drug for Alzheimer’s, but the data around it was, at best, shakey.
To make matters worse, the negative PR and feedback from the medical community around Aduhelm were increasingly hostile. The CEO used the standard PR line, but HCPs weren’t buying it, with some even going as far as not to meet with Biogen reps.
Today, STAT News is reporting that they could lay off as many as 1,000 people to save $750 million. On top of all this, their current pipeline is anemic.
Biogen’s mistakes can be traced to several factors, including hiring too many consultants who had no real business experience but perhaps their most significant failure is overestimating their success. You can bet that ANY company that develops a successful new drug will be challenged by competitors who want a slice of the profits.
Several people in my network work at Biogen and have been worried that layoffs were coming as long as six months ago. Internally people worried that Aduhelm’s data was weak and wouldn’t be successful. They understood the WHY of launching the drug but felt it could do long-term damage to the company.
For Biogen to get back on track, they need to find a CEO who dares to withdraw Aduhelm from the market and possibly sell their Cambridge campus to move back to more humble offices. The biggest challenge is going to be restoring morale. When there is fear of being laid off, employees don’t do their best work.
Nine years ago, I interviewed for a contractor’s job at Biogen, and I’m glad I wasn’t selected. I found an atmosphere of little privacy via wide-open workstations and an attitude of arrogance. This business can humble you in a short time. It’s too bad Biogen found out the hard way.