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May 3, 2016

Biogen to Spin Off Hemophilia Business

  • Biogen said today it intends to spin off its hemophilia business as an independent, publicly traded company—a deal designed to hone the biotech giant’s focus on treatments for neurological and eye diseases.

    The spin-off comes 6 months-plus after Biogen reduced its workforce 11%, in a restructuring that followed a slowdown in sales of its drugs.

    Hemophilia treatments account for just over 5% of Biogen’s 2015 revenue, with the hemophilia A treatment Eloctate and the hemophilia B drug Alprolix racking up a combined $554.2 million in sales last year—$319.7 million for Eloctate, the rest for Alprolix.

    For the 12 months ending March 31, the two treatments generated a combined $640 million.

    “We believe that the best way to realize the full potential of this growing and vital business is to enable it to operate independently with a management team dedicated to providing therapies to people living with hemophilia,” Biogen CEO George Scangos, Ph.D., said in a statement. “We expect that the new company will be a leader in discovering, developing, and commercializing innovative therapies for hemophilia.”

    The surviving Biogen, Dr. Scangos added, will focus even more on developing drugs for “diseases with a neuronal etiology, including neurodegeneration, neuromuscular disorders, neuropathic pain, and ophthalmological indications.”

    Biogen said the new company—whose name will be announced at a later date—is expected to continue to develop and commercialize Eloctate and Alprolix under Biogen's existing collaboration agreement with Swedish Orphan Biovitrum AB (publ)(Sobi).

    In part, that will entail the new company conducting additional studies to confirm early data that according to Biogen suggest Eloctate’s potential to rapidly induce immune tolerance in hemophilia patients who develop inhibitors.

    The new company will retain commercial rights for Eloctate and Alprolix for North America and for the rest of the world markets outside of, essentially, Europe, North Africa, Russia, and certain countries in the Middle East.

    Biogen added that the new company also plans to bring longer-acting therapies utilizing the XTEN technology into clinical development in the first half of 2017, as well as accelerate the development of bispecific antibodies and hemophilia-related gene therapy programs.

    John G. Cox, Biogen’s current evp, pharmaceutical operations & technology, will serve as CEO of the new company, which is expected to be headquartered in the Boston area.

    Biogen said it expects to provide transition services to the new company “for some period of time, and is expected to remain the manufacturer of Eloctate and Alprolix for the next 3 to 5 years."

    Biogen’s board of directors has authorized management to spin off the hemophilia business. The full management team and board of directors of the new hemophilia spin-off will be named at a future date.

    The hemophilia spin-off is planned to be completed by the end of 2016 or early 2017, subject to conditions that include final approval of Biogen’s board of directors, effectiveness of a Form 10 registration statement to be filed with the U.S. Securities and Exchange Commission, and receipt of a favorable opinion with respect to the tax-free nature of the transaction.

    Biogen said the spin-off is expected to be accomplished through a distribution of shares of the new publicly traded company to Biogen stockholders in a transaction intended to be free from U.S. federal income tax.

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