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California biotech adds to industry?s pink-slip count
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.
Cost-cutting efforts include:
"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."