Biogen to spin off hemophilia business
Biogen intends to spin off its hemophilia business as an independent, publicly traded company. The strategic goal of this transaction is to create two focused companies dedicated to driving current and future value in their respective therapeutic areas of expertise.
“We expect that the new company will be a leader in discovering, developing, and commercializing innovative therapies for hemophilia, built on remarkable science and a deep understanding of how to continually improve treatment for patients,” said George Scangos, Ph.D., Biogen’s chief executive officer. “Our expanding hemophilia business continues to perform very well. ELOCTATE and ALPROLIX provide meaningful benefits for people living with hemophilia and continue to gain market share. 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.”
“For Biogen, our mission remains unchanged: we continue to aspire to have the greatest impact on patients of any biotechnology company in the history of our industry,” continued Dr. Scangos. “Biogen is poised to make a tremendous difference in the lives of millions of people suffering from diseases with a neuronal etiology, including neurodegeneration, neuromuscular disorders, neuropathic pain, and ophthalmological indications. Our depth of knowledge in neuroscience and neurology is remarkable. The biological bases of many of these diseases are becoming clear, and we believe we are very well positioned to be a leader in these important areas. We will now carry out this mission through an even greater focus on therapies for patients with devastating neurodegenerative diseases for which there are few or no effective treatment options. And, we will accelerate our efforts to develop novel, transformative therapies for patients with MS, spinal muscular atrophy (SMA), Alzheimer’s disease, Parkinson’s disease, amyotrophic lateral sclerosis (ALS) and neuropathic pain.”
The new company, to be named at a later date, will focus on the discovery and development of therapies for the treatment of hemophilia, with existing marketed products to include ELOCTATE and ALPROLIX, indicated for the treatment of hemophilia A and B, respectively. The new company is expected to continue to develop and commercialize ELOCTATE and ALPROLIX under Biogen's existing collaboration agreement with Swedish Orphan Biovitrum (Sobi). ELOCTATE and ALPROLIX generated combined revenues of $640 million during the twelve-month period ended March 31, 2016.
The new company plans to bring longer acting therapies utilizing the XTEN technology into clinical development in the first half of 2017 and to accelerate the development of bispecific antibodies and hemophilia-related gene therapy programs. The new company also plans to conduct additional studies to confirm early data that suggest ELOCTATE’s potential to rapidly induce immune tolerance in hemophilia patients who develop inhibitors.
Biogen believes the spin-off of its hemophilia business—anchored by ELOCTATE and ALPROLIX—into a separate publicly traded company will result in two lean, profitable companies that:
- focus on and pursue strategic priorities specific to their core commercial therapies and pipeline assets;
- utilize distinct capital allocation strategies and capital structures, as well as achieve additional operating efficiencies consistent with their respective long-term strategic objectives; and
- respond more quickly to the rapidly changing developments and global opportunities in their respective patient markets.
The spin-off is expected to provide investors with greater visibility into the financial and operational structures of each company and a clearer understanding of their respective strategies. Biogen believes creating two stand-alone companies with dedicated and talented management teams will provide the necessary foundation for long-term value creation for each company.
John G. Cox, Biogen’s current executive vice president, Pharmaceutical Operations & Technology, will serve as the chief executive officer of the new company. Cox joined Biogen in 2003 and has held several senior executive positions, including senior vice president of technical operations, senior vice president of global manufacturing, and vice president of manufacturing and general manager of Biogen’s operations in Research Triangle Park, North Carolina. In his time at Biogen, Cox has been closely involved with the hemophilia business, spending 5 years in the manufacturing of ELOCTATE and ALPROLIX and two years in launching and commercializing these products. Most recently, Cox also served as the interim head of Biogen’s commercial organization.
The new company is expected to be headquartered in the Boston area. The new company will retain commercial rights for ELOCTATE and ALPROLIX for North America and for rest of the world markets outside of, essentially, Europe, North Africa, Russia and certain countries in the Middle East. Biogen is expected 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 three to five years. The full management team and board of directors of the new company will be named at a later date.
Biogen’s board of directors has authorized management to proceed with a plan to spin off its hemophilia business. The spin-off is planned to be completed by the end of 2016 or early 2017, subject to the satisfaction of certain conditions, including, among others, final approval of Biogen’s board of directors, receipt of a favorable opinion with respect to the tax-free nature of the transaction, and the effectiveness of a Form 10 registration statement that will be filed with the SEC. 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 tax-free for U.S. federal income tax purposes.