SAN FRANCISCO -- Amgen Inc., the world's largest biotechnology company, will slash jobs for the first time in its 27-year history, close plants, and cut capital spending in response to declining sales of its top-selling drug.
The job cuts will total 2,200 to 2,600, or 12 to 14 percent of the workforce, under a plan to save more than $1 billion in 2008, Amgen said yesterday in a statement. Earnings this year will be lower than projected, the company said.
Amgen shares have lost 26 percent this year after studies showed the company's two top-selling anemia drugs, Aranesp and Epogen, raised the risk of death when given in high doses. The drugs account for almost half of Amgen's revenue. Payment limits by insurers and safety warnings from US regulators threaten to cut $1.3 billion in revenue this year, analysts say.
Amgen shares rose 74 cents to $51.33 in extended trading after the report. Earlier, they fell 73 cents to $50.59 in regular Nasdaq Stock Market composite trading.
Amgen, based in Thousand Oaks, Calif., will take a pretax charge in 2007 and 2008 of $600 million to $700 million because of the cutbacks, according to the statement. It will close some production operations and reduce the size of other units to become more efficient, Amgen said.
Capital spending will be slashed by $1.9 billion during the two years, bolstering cash flow, Amgen said.
The drug maker lowered its profit forecast for 2007 to $4.13 to $4.23 a share, excluding stock options and other expenses. In January, the company said it expected profit of $4.30 to $4.50 a share for the year.