Amgen to Trim Workforce by 12 to 14 Percent

After indicating last month that there were problems with sales, Thousand Oaks-based biotechnology company Amgen announced it would trim its workforce by up to 12 to 14 percent cut. This translates roughly to between 2,200 to 2,600 jobs.

Making this announcement on Wednesday, Amgen also reduced its profit guidance on account of reduced sales of Aranesp, its anemia drug. The company has cut down its estimated earnings per share from a prior prediction of $4.28 a share to between $4.13 and $4.23.

Amgen also mentioned it would face a $600 million to $700 million restructuring charge. Another number taking the hit was capital expenditure, with the company announcing a reduction by $1.9 billion.

These announcements were along expected lines after Amgen announced last month a 10 percent slump in Aranesp global sales during the second quarter this year. The company said sales for the second quarter stood at $949 million.

The FDA had declared earlier that Amgen was to carry a stronger warning on the drug label about its effects when used by anemic cancer patients. The additional warning was to be directed at doctors, asking them to prescribe the drug in minimal doses for such patients.

Aranesp was Amgen’s star performer last year, ringing in sales worth $4.12 billion. The requirement for additional warnings has hurt the company quite badly, with company officials saying expansion plans would be cut and more emphasis would be targeted at research and development.

Amgen Chairman and CEO Kevin Sharer said the company would focus on its research work and will work on creating new medicines for patients with serious ailments.

The FDA directive was also not surprising, considering Medicare had set out new regulations on Aug. 1 that limited reimbursements for erythropoiesis-stimulating agents. These are a class of drugs used to treat anemia in patients suffering from cancer and kidney failure.

Amgen is not the only drug on this list. Procrit, a Johnson and Johnson drug and Epogen, another Amgen drug, also figure on the list. Both these drugs are also used to treat anemia for cancer patients undergoing chemotherapy as well as patients with kidney failure.