By Linda Nguyen, PhD MBA
photography by Kyle Carreon
I recently had the privilege of attending the US Biotech and Pharma Summit hosted by the Financial Times and Endpoint News (thank you for having me!). Industry leaders discussed pivotal topics and trends, especially in light of the upcoming election. The morning keynote was delivered by Chris Viehbacher, who has been the CEO of Biogen for ~1.5 years. As someone who did her postdoctoral training in medical affairs and external innovation at Biogen during Michel Vounatsos’ tenure as CEO, it was a great opportunity to hear from new leadership at the Summit.
Chris Viehbacher shared insights into the company’s strategic direction and the challenges it faces in navigating the complex biotech and pharma landscape. Viehbacher’s vision for Biogen involves striking a delicate balance between risk-taking and financial sustainability, ensuring the company remains a leader in scientific innovation while delivering value to shareholders.
Turning Around Biogen: Addressing Key Challenges
When Viehbacher joined Biogen, his mission was clear: to turn around a company facing significant challenges. The launch of Biogen’s first Alzheimer’s drug, Aduhelm, had been problematic, and the company’s multiple sclerosis (MS) franchise was in decline. I remember the day that it was announced that aducanamab had failed its interim futility analysis. I had just begun my rotation in the External Portfolio Innovation Unit and the S&E team was scrambling to get an Alzheimer’s Disease competitive landscape ready for an urgent meeting. This experience allowed me to map out competitive landscapes in various therapeutic areas, aiding in Biogen’s portfolio diversification efforts.
Despite these hurdles, Viehbacher saw Biogen’s potential, driven by its exceptional scientific and medical capabilities in neuroscience and rare diseases. He emphasized that Biogen is committed to solving some of healthcare’s hardest problems, a mission that sets it apart in the industry.
“The company was founded in 1978 and has really been focused on MS, and that’s where all our resources were, yet we had new products to launch… [We were] trying to deal with the fallout of Aduhelm to ensure that we and our partner Eisai were on the right track to launch the Leqembi, shifting our resources from MS to new product launches, and then look for new opportunities because our R&D portfolio is such high risk…” -Chris Viehbacher
Embracing High-Risk, High-Reward Projects
One of Viehbacher’s key points is Biogen’s willingness to pursue high-risk projects with significant potential to impact patients’ lives, even if these projects do not promise immediate financial returns. For example, Biogen launched Qalsody, a drug for a rare ALS SOD1 mutation found in ~300 people in the US and ~1000 people in Europe. Despite knowing it would not be a profitable venture but would significantly improve patients’ lives, Biogen kept on developing the rare disease drug. This commitment to making a difference, regardless of financial outcomes, underscores Biogen’s mission to deliver patient impact and care deeply.
Balancing Innovation with Financial Stability
While Biogen is committed to innovation, Viehbacher acknowledged the need to balance this with financial stability. Larger companies often prioritize predictable earnings, limiting their ability to take bold risks. However, Biogen remains dedicated to advancing research in neurodegeneration, an area with exceedingly high cost, scientific uncertainty and risk. Drugs are very expensive to develop as I covered before and can be in the low billions of USD. Between Eisai and Biogen, the two companies “spent billions of dollars just on the clinical trial cost, not counting any other failures,” said Viehbacher.
Biogen also continues working on validating neurodegenerative biomarkers like neurofilament to track disease progression in Parkinson’s and ALS. Validating neurofilament’s role as a biomarker helps Biogen and other companies in the same space fail faster and redirect resources to promising therapeutics. Managing these risks of targeting drugs beyond the blood brain barrier effectively and safely while ensuring financial sustainability is a core part of Viehbacher’s strategy.
Cultural and Operational Shifts
Upon joining Biogen, Viehbacher identified core issues from the fallout of the Aduhelm launch and the need to shift resources from MS to new product launches. Diversifying Biogen’s R&D portfolio to include rare diseases and immunology is crucial for balancing the high risks associated with its primary focus areas. In fact, Biogen recently announced (less than a week after Viehbacher’s keynote at the Summit) that they will acquire the immunology focused biotech company HI-Bio for $1.15B and $650M in biobucks to expand their portfolio and mitigate risks of pursuing drugs for neuroscience.
Strategic Approach to Gene Therapy
Viehbacher also discussed Biogen’s approach to gene therapy. While the potential is enormous, commercial challenges do remain. Biogen may have learned its lesson with acquiring Nightstar Therapeutics for $800M in attempts to diversify the portfolio after aducanamab failed its futility analysis. Unfortunately, Nightstar’s gene therapy for ocular degeneration rare disease choroideremia unfortunately did not meet its phase III primary endpoint.
Collaborations with specialized companies and leveraging external risk capital allow Biogen to stay involved in cutting-edge therapies without overcommitting resources in technology that is still early and the durability of effect is not well documented for gene therapies. This strategy ensures that Biogen can participate in advancements like gene and cell therapies while managing financial exposure.
On the payer side for one and done therapies like gene therapy, a commercial model will have to consider that US patients switch insurance companies every three years. If one particular insurance company carries substantially more of the burden of paying for a $2M gene therapy for patients than other insurance companies AND has a high patient switching rate then that will become problematic.
Navigating Geopolitical Risks
The conversation also highlighted the geopolitical challenges impacting the biotech and pharma industries, particularly the US-China relationship. Considering geopolitical risks in business strategies, given potential impacts on data security, supply chains and clinical trials as most biotech and pharma companies use Chinese CROs for outsourcing preclinical studies. Negotiating transition arrangements is essential to mitigate disruptions from potential legislative changes.
Looking Ahead: Opportunities and Growth
Viehbacher expressed optimism about Biogen’s growth prospects, particularly with the launch of Leqembi, the first Alzheimer’s Disease modifying treatment that targets beta amyloid plaques to treat patients in their early stages. Despite challenges in transforming neurology practices to accommodate new treatments, Viehbacher is confident that Biogen’s pioneering efforts to push the science and medicine forward will ultimately benefit patients and expand the neurodegeneration market.
Conclusion
Chris Viehbacher’s leadership at Biogen is marked by a commitment to innovation and patient impact, even in the face of significant risks. By balancing scientific ambition and financial prudence, Biogen aims to remain a leader in neuroscience, while navigating the complexities of the global biotech landscape. As the biotech and pharma markets continue to evolve, Biogen’s strategic approach to diversify its portfolio beyond neuroscience positions it well for future growth and success.
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