Add Amgen to the list of pharmas dropping the ax. Last week, the company announced a restructuring plan that would see its staff slashed by 12 to 14 percent in an effort to save up to $1.3 billion by 2008.

Reducing head count by up to 2,600 employees.

Reducing planned capital spending by nearly $1.9 billion during the next year.

Shuttering some production operations and rationalizing other facilities.

Reprioritizing research and development and operations for future growth.

"Amgen is a company that has been in the upper echelon for a long while but that is sort of superficial," said Bill Trombetta, professor of pharmaceutical marketing at St. Joseph's University. "It has relied primarily on two drugs--Epogen and Aranesp--and those two drugs are running into trouble."

The biotech cited less-than-stellar sales of Aranesp (darbepoetin alfa), an anemia drug that boosts the quantity of red blood cells in patients. Analysts claim that studies warning of blood clots and heart attacks due to overuse of the drug have also hurt Aranesp's public perception, pointing out that sales of the drug fell 19 percent in the second quarter of this year.

"Recent changes in coverage rules and adjustments to Amgen's FDA-approved labels for Epogen and Aranesp have and will adversely affect Amgen's revenue," stated Kevin Sharer, Amgen's chairman and CEO in a release. "The initiatives announced respond to that new reality by taking account of reduced revenues and appropriately lowering costs across the company."

This has been a rough month for pharma, as industry giants Johnson  & Johnson, AstraZeneca, and Bristol-Meyers Squibb all revealed cost-cutting strategies that include reducing labor force. "Sales have stopped growing," Trombetta told Pharm Exec. "Pharma has been used to getting double-digit increases every year, and now we are seeing drug companies actually going backwards in sales. That's a scary proposition."

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Amgen Under the Knife

FDA is requiring that type 2 diabetes drugs Avandia (rosiglitazone), from GlaxoSmithKline, and Actos (pioglitazone), from Takeda Pharmaceuticals, be labeled with a black box citing the risk of congestive heart failure (CHF).

The black-box warning issued for Avandia, however, is not related to the study in the 

 that reported a 43 percent increased risk of heart attack among patients taking the drug. FDA is currently looking at a report issued by a panel of medical experts on the subject.

According to GSK, Avandia has included information about CHF in the prescribing information since the drug was approved by FDA in 1999 and has displayed a warning for "cardiac failure and other cardiac effects" since 2001.

"A black-box warning is never a good thing, but it's not a death sentence unto itself," said Richard Altus, CEO of ImpactRx. "Sometimes physicians already know that a risk exists, so the box is just the FDA catching up with what the physicians might already know through other studies." He notes that Celebrex was not hurt by the addition of a black-box warning, as physicians are still heavily prescribing it.

Altus continued, "Every time a black-box warning goes out, you have to look at the unique circumstance around that brand to really assess how it is going to adversely affect the brand and its market share."

GSK has already altered its consumer Web site for Avandia, noting the new warnings in bold letters and using half the main page to host safety information.

Diabetes drugs to feature warnings for heart failure

Pharmaceutical Executive-08-22-2007

Amgen Under the Knife

Slapped with a Black Box