Below is from Fierce Biotech 1 Aug 2024. A few interesting comments from Biogen’s CEO. If they want to repeat the Reata deal I can think of a very suitable candidate!
While Biogen’s pharma peers are hunting for late-stage assets with little risk, CEO Chris Viehbacher wants to bring in more early-stage medicines, arguing that there’s more shareholder value to be had the earlier a company can get in.
“One of the things I'd like to see us do is really bring a lot more assets in first an early stage because the earlier you can acquire these assets, the more shareholder value you can create,” Viehbacher said on an earnings call Thursday morning.
Biogen has not been shy about being on the lookout for deals, as Viehbacher oversees a massive pipeline overhaul and internal cost-cutting efforts that began last year. But his suggestion today that he’s open to more risky, less validated technologies represents a shift in thinking.
During Biogen’s second-quarter 2023 earnings call, Viehbacher said his business development team was focused on expenditures associated with little risk. He remarked that the company had “enough heavy lift ... to be honest.”
But since then, Biogen has cut costs and staff, focused its Alzheimer’s market work around Leqembi and conducted high-profile buyouts of Reata Pharmaceuticals and Human Immunology Biosciences (HI-Bio).
“Biogen is in a much different place than we were 18 months ago. We still have a number of challenges like any other company, but I think we're really positioned for longer-term growth now with the company,” Viehbacher said on the call today.
As for what Biogen might be interested in buying or dealing with, the CEO said that the company is already “long on neuroscience,” so areas like immunology or rare diseases might be more appealing. He pointed to the Reata acquisition as one he’d like to repeat. The biotech was picked up for $7.3 billion in July 2023, bringing in the approved medicine Skyclarys for Friedreich’s ataxia.
“If we could find another Reata-type acquisition, I think we would look for that, but you know, those come along pretty rarely,” Viehbacher said. “It's rare that you can find a company that is that close to the market—in fact, they'd already launched by the time we actually had acquired that.”
He continued: “We will continue to look but they don't come along every day.”
Viehbacher said Biogen is not “desperate” for a deal, either. With HI-Bio coming into the fold, its products are expected to land on the market in the 2027 to 2030 timeframe. Later, Viehbacher said that transaction was financed with savings from the “Fit for Growth” cost-cutting initiative.
“We've been able to release resources from the business and reinvest them intelligently and we've got great people that I think can do that with tremendous results,” Viehbacher said.
The CEO also doesn’t want to be in a competitive bidding process, which he says does not create value for shareholders in the end.
“We can be picky I think,” he said. “Also where we look is not necessarily where everybody else is looking.”
Biogen is also just the right size where a billion-dollar deal can go a long way, Viehbacher explained.
“Biogen’s a nice size. A billion dollars moves the needle hugely. And there are a lot of bigger companies where a billion dollars doesn't move the needle,” he said. “We can look at assets where we have the capital that might be too small for some of the bigger players but be too expensive for some smaller players.”
At the same time, Biogen is “doing a lot more” research collaborations, the CEO noted.
With all that said, Viehbacher still sees plenty of value to come from the company’s internal R&D teams.
“I'd like to make sure we are still an innovation company going forward, that we're not just acquiring our future, but really investing in that,” he said, adding that he is eyeing the 2025 to 2030 timeframe as a period when Biogen will see significant growth.
“You'll see us continue with a lot of discipline, but I think be able to turn passive capital into active capital and then into active growth,” he concluded.
(20min delay)