Biogen slashes workforce, invests in Tecfidera DTC
Biogen said it will double-down on its investment in Tecfidera by launching a DTC campaign for the multiple-sclerosis drug in October and cutting its workforce by 11%, or more than 800 employees.
The renewed direct-to-consumer campaign kicked off in the first week of October.
The TV campaign asks viewers to take “another look” at relapsing multiple sclerosis, showing a woman living her life with fewer relapses—including shots of her hiking, swimming and attending a carnival.
The company's creative agency for the campaign is Omnicom's CDMiConnect. CMI and WPP's MEC were responsible for media buying.
Biogen CFO Paul Clancy told analysts during the company's third-quarter earnings call that the Tecfidera TV spot will likely run “well into 2016.” He added that the overall objective will be to grow the US market. The drug's launch was considered very successful, following its approval in March 2013.
Clancy said Biogen will be looking to attract patients with “injection fatigue,” and that the firm has data “that suggest there is a relatively low level of patient awareness” about Tecfidera. When a patient asks his or her doctor for a specific drug, the doctor will usually give them a prescription for that drug, he said.
The renewed investment in Tecfidera may be a response to slowing sales growth. The company reported that global sales of Tecfidera rose 19% to $937 million in the third quarter of 2015, compared to the same period a year ago. Biogen executives said sales growth of Tecfidera had slowed during the second quarter of 2015, showing a 26% increase in revenue during those three months, compared to the 63% in year-over-year sales growth for the drug during the first quarter of 2015.
Biogen CEO George Scangos noted during the company's earnings call that the company had increased Tecfidera's price during the quarter. The drugmaker told MM&M in an email that the drug's current wholesale acquisition price is $70,614 for a year's supply. When the drug launched in 2013, the price was $54,900 per year, which represents a 28% increase over the past two years.
Biogen's overall sales rose by 11% to $2.8 billion in the third quarter of 2015, compared to the same period a year ago.
The drugmaker said earlier this month that Tony Kingsley, head of global commercial operations, stepped down from the company on Oct. 9. He has been replaced in the interim by John Cox, EVP of pharmaceutical operations and technology.
Steve Rubis, an analyst at Stifel, wrote in an investor note that Biogen bolstered its online advertising spending late in the third quarter, particularly for advertisements that ran on WebMD sites, but he questioned what channel Biogen will decide to use when deploying its advertising dollars.
“The restructuring bodes well for the fiscal year 2016 as it suggests there may be incremental spend in the digital from a key brand focus on digital advertising,” he said. “Another question, Will the recommitment to DTC advertising mean new ad dollars will go to TV advertising or mostly digital?”