Amgen Inc. said it plans to reduce 12–15% of its global workforce, beginning in the fourth quarter of 2014 and continuing through 2015. The biotechnology company said it would reduce staff by 2,400–2,900, predominantly in the United States. Amgen currently employs approximately 20,000 staff members. The company will also close its facilities in Washington and Colorado.
Company executives said during a conference call that the restructuring would allow the company to invest in continuing innovation and the launch of its new pipeline.
"The talented staff members at these locations have made enormous contributions to advancing biotechnology over the years and the surrounding communities have been very supportive, so it is with great reluctance that we acknowledge the need to exit," said Chairman and CEO Robert A. Bradway. "At each site, we are actively engaging in discussions with third-parties about potential future use of the facilities."
Amgen said it would expand its presence in South San Francisco and Cambridge, Mass., and retain its headquarters in Thousand Oaks, Calif., with a reduced number of staff consolidated into fewer of the existing buildings.
The company said these layoffs are the first step of a restructuring plan. As a next step, Amgen said it is evaluating additional efficiency initiatives, particularly in the area of shared services and other external expense categories to support its growth objectives.
Third quarter earnings
Amgen reported that income for the second quarter of 2014 grew 26% to $1,823 million, compared to $1,444 million in the same quarter last year. Total revenues increased 11% to $5,180 million, compared to $4,679 million in the same quarter last year
Product sales performance
- Epogen (epoetin alfa) sales increased 2% year-over-year for the second quarter driven by price, offset partially by the prior year positive Medicaid rebate estimate adjustment. Unit demand continues to be relatively stable, the company said.
- Sensipar/Mimpara(cinacalcet) sales increased 15% year-over-year for the second quarter, driven primarily by higher unit demand growth across all regions and price increases in the United States, the company said.
- Aranesp(darbepoetin alfa) sales decreased 1% year-over-year for the second quarter mainly due to the prior year positive Medicaid rebate estimate adjustment. Underlying demand continues to decrease slightly due to practice patterns in the United States and competitive pricing pressures in Europe.
- Enbrel sales increased 7% year-over-year for the second quarter driven mainly by price. ENBREL continues to benefit from strong underlying demand and segment growth.
- Kyprolis sales for the second quarter of 2014 were $78 million. The year-over-year comparison is not relevant as Onyx Pharmaceuticals, Inc. (Onyx) was acquired in Q4 of 2013.
- Prolia sales increased 40% year-over-year for the second quarter driven by higher unit demand from share growth.
- XGEVA sales increased 20% year-over-year for the second quarter driven by higher unit demand. XGEVA continues to capture share in a growing market despite competition from generic zoledronic acid.
- Combined Neulasta (pegfilgrastim) and Neupogen(filgrastim) sales declined year-over-year by 1 percent for the second quarter.
- Global Neulasta sales increased 1% year-over-year for the second quarter driven by price offset partially by the prior year positive Medicaid rebate estimate adjustment.
- Global NEUPOGEN sales decreased 9% year-over-year for the second quarter due to the prior year positive Medicaid rebate adjustment.
- Underlying demand was slightly impacted by short- and long-acting competition in the U.S. and Europe, respectively.
- Vectibix (panitumumab) increased 42 percent year-over-year for the second quarter driven by higher unit demand across all regions.
- Nplate (romiplostim) increased 12% year-over-year for the second quarter driven mainly by higher unit demand and strong market growth across all regions.