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Amgen cuts workforce and facilities despite profit leap

US biopharma plans 12-15 per cent workforce reduction

Amgen 

The apparent recovery in the global economy is not stopping sweeping job cuts in the pharma sector, with Amgen the latest company to wield the axe.  

The US biopharma giant plans to eliminate somewhere between 2,400 and 2,900 jobs - equivalent to 12 to 15 per cent of its total workforce - starting in the fourth quarter of this year.  

Its US operations will bear the brunt of the cutbacks, which will extend through 2015, according to the firm's chief executive Bob Bradway, who said Amgen hopes to trim annual operating costs by $700m by 2016 as a result of the measures.  

Amgen also announced the closure of two manufacturing plants in Colorado and a pair of R&D facilities in Washington state before the end of next year in order to "optimise" its network in the US, added Bradway. Its headquarters in Thousand Oaks, California, will not be unscathed with staff and building numbers set to fall there too.  

In a conference call, Bradway suggested the reductions were only the first stages in a broader resource reallocation effort, as the company "re-engineers for the future".  

"We anticipate approximately a 23 per cent reduction in our facilities footprint as part of this first step in our restructuring," he said, adding that future economy drives would focus on areas such as shared services.  

The company's R&D hubs in Cambridge, Massachusetts and South San Francisco, California, will be expanded during the programme, which will cost somewhere between $775m and $950m to implement by the end of 2015.   

The restructuring comes despite the fact that Amgen reported a healthy 11 per cent rise in revenues to $5.2bn, driven by higher-than-expected sales of arthritis drug Enbrel - which grew 7 per cent to $1.2bn - and last year's $10.4bn acquisition of Onyx which added myeloma therapy Kyprolis (carfilzomib).  

Ageing white blood cell stimulators Neupogen (filgrastim) and Neulasta (pegfilgrastim) also shrugged off emerging competition in the US and Europe, with sales down just 1 per cent to  $1.4bn.  

Net income was up 23 per cent to $1.5bn, and the company raised its revenue guidance for the year to $19.5bn-$19.7bn, up from earlier estimates of $19.2bn-$19.6bn.

Article by
Phil Taylor

30th July 2014

From: Research, Sales

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