Amgen Now Expects Job Cuts To Exceed 2,900
October 28, 2014
By Riley McDermid, BioSpace.com Breaking News Staff
The world’s third largest biotech, Amgen Inc , on Tuesday said that it will cut an additional 5 percent of its workforce, or 1,100 jobs, in addition to the 2,900 it had already projected it will lose as it restructures.
Amgen saw record high third quarter earnings and revenue and had a blockbuster period for its flagship drugs, despite having to take $375 million haircut related to massive restructuring moves announced last summer.
Amgen told analysts Tuesday during their Business Review Day that it will reduce its employee base by a further 5 percent. So far, it has announced it would cut more than 2,900 jobs as it closes plants and realigns its assets in preparation for the launch of a parade of new drugs and therapies.
Amgen earned $2.30 per share, exceeding analysts' average expectations by 19 cents, and said it now expects 2014 adjusted earnings of $8.45 to $8.55 per share, an even steeper climb than the enhanced estimate it provided in July of $8.20 to $8.40 per share.
Amgen now projects full-year revenue of $19.8 billion to $20 billion, a jump from its previous estimate of $19.5 billion to $19.7 billion. Revenue was up 6 percent in the third quarter to $5.03 billion, beating the Wall Street consensus of $4.96 billion and pleasing analysts in the process.
“Third quarter performance was solid driven by strong revs and OpEx control...As we are already more than 5 percent higher than consensus in full year 2015; this bodes well for the stock,” wrote Citigroup’s Yaron Werber, head of biotech research.
The company will need that money, however, as it braces itself for a further $150 million restructuring charge slated for the fourth quarter, and attempt to shore up net profit, which fell during the third quarter.
“We are looking for better clarity on where operating margins can go in 2015 and onwards at the business review day tomorrow to boost confidence in the long-term outlook,” wrote Werber in a note to investors. “We think it is unlikely that Amgen will split itself up as we previewed in our recent note.
Much of the strength of Amgen’s third quarter earning rested on the success of its blockbuster drug pipeline. It saw sales of osteoporosis treatment Prolia skyrocket 43 percent to $255 million, while multiple myeloma cancer therapy Kyprolis brought in $94 million, a significant jump from the Street’s consensus estimate of $87 million. Its treatment for raising the white blood cell count, Neulasta, gained 5 percent to $1.19 billion.