Amgen said today that it will eliminate an additional “approximately 600 and 1,100 positions,” beyond the up-to-2,900 layoffs the company announced over the summer, according to a Form 8-K filed with the U.S. Securities and Exchange Commission.
That raises the count of jobs to be axed at Amgen to between approximately 3,500 and 4,000 positions by the end of 2015—some 20% of the company’s total workforce—resulting in total pre-tax restructuring charges ranging between approximately $935 million and $1.035 billion.
That range includes between approximately $100 million and $150 million tied to the newly-disclosed layoffs, which the company said are expected to be incurred primarily in 2015.
Also included are separation costs ranging between approximately $535 million and $585 million toward the job cuts; and between $400 million and $450 million in asset impairments, accelerated depreciation and other related costs resulting from the consolidation of the company's worldwide facilities.
Amgen estimates that approximately 55% of the total pre-tax restructuring charges will result in cash outlays, associated primarily with staff separation costs.
In a statement, Amgen said the job cuts are part of efforts to generate up to $1.5 billion in annual savings and a 15 point adjusted operating margin increase by 2018.
Robert A. Bradway, Amgen’s chairman and CEO, said in a statement the company’s strategy will entail discovery and development of new medicines to address serious illnesses, development of branded biosimilars, next-generation biomanufacturing of high quality biologics, developing improved biologic drug delivery systems, global expansion, as well as generating return to shareholders and long-term value opportunities.
“With four potential product launches in 2015 and a strong pipeline of innovative and biosimilar molecules, we are well positioned to deliver breakthrough medicines for patients and drive long-term growth,” stated Bradway.
That pipeline includes biosimilars, with Amgen saying it expanded its biosimilar portfolio to nine programs representing a $3 billion opportunity. In addition to the biosimilar adilimumab, trastuzumab, bevacizumab, infliximab, rituximab, and cetuximab programs, Amgen said it launched three additional biosimilar programs, with the biosimilar infliximab and rituximab having advanced to the “clinical ready” phase.
Amgen's first biosimilar is expected to launch in 2017, followed by four others through 2019, the company said.
Bradway also said Amgen is on track to produce commercial products from its new Singapore next-generation biomanufacturing facility starting in 2017. The plant’s next-generation biomanufacturing capabilities are expected to enable dramatically increased bulk production capabilities at one-quarter of the capital costs, one-third of the operating expense, and twice the speed—resulting in an estimated cost reduction of 60% or more per gram of protein, the company projected.
Amgen also said it has also refocused and differentiated its R&D efforts within inflammation and oncology, metabolism and bone, cardiovascular and neuroscience.
The company said it consolidated small, medium. and large molecule technologies into one integrated platform; focused efforts on immuno-oncology; and leveraged its human population genetics research to identify or validate targets in humans wherever possible—an area where Amgen plans to leverage its $415 million acquisition of deCODE Genetics about two years ago.
The expanded restructuring will include additional efficiency initiatives, particularly in the area of shared services, outsourcing, and other external expense categories, Amgen added.
