(Bloomberg) -- Biogen Inc. said it would cut 1,000 jobs, or more than 11% of its workforce, and reduce operating expenses by an additional $700 million by 2025 in an attempt to grapple with declining sales from its biggest drug category. 

Second-quarter sales of $2.46 billion beat analyst estimates for $2.37 billion, as contract manufacturing and other non-product sales doubled, while revenues from its multiple sclerosis drug franchise shrank 15% from the previous year. Adjusted earnings for the quarter were $4.02 a share, compared with the average analyst estimate of $3.76 a share. 

Biogen shares were down 3.7% at 9:40 a.m. in New York.

Biogen is in a transition period as it attempts to broaden its focus and come up with new growth sources to replace aging multiple sclerosis drugs, which remain its biggest drug category. Chief Executive Officer Christopher Viehbacher, who took over last year, has promised to redesign the company and reduce its dependence on risky neurology research, without eliminating its ability to pursue hard diseases like Alzheimer’s. 

“This is a really soup to nuts redesign of the whole company,” Viehbacher said on a call with journalists. “What we are really trying to do is eliminate some of the layers” that slow decision-making.

Earlier this year, Biogen announced a new plan called “Fit for Growth” that promises cost savings beyond the $1 billion produced by a previous cost-cutting program. In a statement, the company said the program will generate roughly $1 billion in overall savings by 2025, but that $300 million of that would then be reinvested into new product launches and research programs, resulting in a net savings of $700 million.

On a conference all with analysts, Biogen executives said that a substantial portion of the savings would come from the headcount reductions. According to its most recent ESG report, Biogen has 8,725 employees worldwide.

The program “is really reflecting the transition of the company,” away from its heavy focus on multiple sclerosis drugs, Viehbacher said on a call with analysts. The goal is to adjust spending to reflect the company’s diminishing fortunes in in the MS area, he said, while still allowing it to invest in promising new drugs in other disease areas. He mentioned rare diseases and immunology as areas of interest that were potentially less risky than the company’s historic neurology focus.

A key focus for Biogen and its partner Eisai Co. is their new Alzheimer’s drug Leqembi, which on July 6th became the first disease-slowing drug to receive full Food and Drug Administration approval. While the drug is eventually expected to become a bestseller, sales are expected to ramp up gradually as the infused drug is complicated to administer and requires multiple brain scans to monitor for side effects.

Under its deal with Eisai, Biogen receives half of the profits on US sales of the drug. It reports its profit-share as revenue on its earnings statement. For the second quarter, this resulted in a loss of $20.7 million from Leqembi, as expenses exceeded user sales early in the drug’s launch.

Multiple sclerosis drug sales, which make up about half the company’s revenue, declined to $1.21 billion from $1.43 billion. 

(Updates with details on workforce size and comments from conference call and call with reporters starting in first parargraph)

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