Amgen Restructuring Plan That Laid Off Hundreds Is Paying Off, CEO Says

Amgen Restructuring Plan That Laid Off Hundreds Is Paying Off, CEO Says July 28, 2016
By Alex Keown, BioSpace.com Breaking News Staff

THOUSAND OAKS, Calif. – A two-year consolidation effort that saw the closure of two facilities, changes made at others and impacted more than 2,000 jobs has paid off for Amgen , Robert Bradway, Amgen’s chief executive officer told investors during a quarterly call on Wednesday.

“The transformation program, which we began some two years ago, continues to deliver savings, enabling us to invest in our business and deliver results for our shareholders,” Bradway said in the call, according to company transcripts.

In 2014 Amgen announced its consolidation plans that included the shuttering of its Elliot Bay campus and Bothell manufacturing plants in Washington State. The company also closed a site in Colorado. At the time Amgen said the plan was expected to save the company up to $1.5 billion by 2018. The closing of the plants was part of an effort to increase manufacturing efficiency and allow the company to develop new products. During the same time frame, Amgen has also sold some of its excess properties, including a Colorado facility, In-Pharmatechnologist noted.

David Meline, Amgen’s chief financial officer, said the consolidation of its manufacturing efforts was beginning to pay off and will allow the company to maintain its cost of sale at competitive levels.

“… we think manufacturing is a source of competitive advantage for Amgen, and we're excited about what we've achieved to-date and where we're going next with the introduction of our next-generation bio-manufacturing,” Bradway told investors and analysts.

During the call, Bradway said the company has seen strong growth through the first six months of 2016, with revenue up 6 percent, which stemmed from the launch of six new products last year, two in the cardiovascular arena and four in cancer. Some of the key drivers for Amgen’s revenue include sales of Enbrel, Prolia, KYPROLIS and XGEVA. Bradway said the company is “on track” to meet or exceed its long-term objectives.

While the new product launches are a key for Amgen, Bradway said the company remains “particularly excited” about the long-term prospects of its Amgen’s anti-cholesterol drug Repatha, a PSCK9 inhibitor. Repatha was approved in 2015 to treat two rare genetic diseases known for high LDL-C, as well as patients who have atherosclerotic CV disease. Pricepoint of the drug has been an issue for some prescribers, however, later this year a study on its effectiveness for cardiovascular disease will be released, which if it continues to show high efficacy, could cause sales to explode, despite some concerns over the pricepoint of the drug.

There are other areas the company is showing signs of revenue growth. Following its 2013 acquisition of Onyx Pharmaceuticals for $10.4 billion, Amgen has been in a stronger position with 10 products either ready for regulatory approval, or in mid- to-late stage clinical development. The company has announced several successes, including with its anti-migraine drug AMG 334, which cleared its Phase II trial endpoints last year. The U.S. Food and Drug Administration granted approval to Amgen’s drug Corlanor (ivabradine) to treat patients with chronic heart failure—a drug that could bring in approximately $500 million or more in annual revenue some analysts have predicted. In December, the FDA also approved Blincyto, a drug designed to treat a rare form of acute lymphoblastic leukemia. Analysts predict Blincyto could generate about $400 million in annual sales.

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