Biogen to Spin Off Hemophilia Unit, Focus on Neurodegenerative Drugs

Biogen announced Tuesday the company plans to spin off its hemophilia drug business as a publicly traded company, and instead concentrate on developing treatments for neurodegenerative diseases, primarily multiple sclerosis (MS).

This new company will include Biogen’s hemophilia drugs, Eloctate and Alprolix for hemophilia A and B, which had combined global sales of $554.2 million in sales last year — and a combined $640 million during the 12 months ending March 31. In 2015, these hemophilia treatments accounted for 5 percent of Biogen’s revenue.

The planned spinoff will be completed later this year or in 2017, Biogen said. It’s expected to be accomplished through a distribution of shares of the new company to Biogen stockholders in an intended tax-free transaction.

Spinning off its hemophilia drug business will allow Biogen the opportunity to focus on its MS drugs (Tecfidera is its bestselling MS treatment). The Cambridge, Mass.-based biotech will also focus its research-and-development efforts on neurodegenerative treatments such as Alzheimer’s disease, Parkinson’s disease, spinal muscular atrophy, amyotrophic lateral sclerosis and neuropathic pain.

The planned spinoff has surprised analysts, though, who anticipated that Biogen would sell its hemophilia drug business for as much as $4 billion to $6 billion, and acquire other assets, reported The Wall Street Journal.

Biogen, however, views the spinoff as creating two profitable companies, enabling the new company “to operate independently with a management team dedicated to providing therapies to people living with hemophilia,” said George Scangos, Ph.D., Biogen’s chief executive officer, in a statement.

But analysts are speculating the move could be strategic, particularly since the multiple sclerosis drug business faces competition. RBC Capital analyst Michael Yee said in a note to clients, that splitting the company in two smaller ones could make Biogen an acquisition target.

Last month, Biogen reported its first-quarter profit grew 18 percent, in part to increased sales of its multiple sclerosis drug Tecfidera.

The new, publicly traded company will continue to collaborate on the development and commercialization of Eloctate and Alprolix with Swedish Orphan Biovitrum AB. Biogen’s executive vice president, John G. Cox, will be the CEO of the new company, based in the Boston area.