Amgen to cut jobs on the back of sales slide
pharmafile | August 20, 2007 | News story | Sales and Marketing |Â Â AmgenÂ
Amgen, one of the world's most successful biotech companies is to cut its staff numbers by up to 14% in response to falling sales of its flagship products.
The Californian company is one of the biotech sector's pioneers, and is now bigger than many pharmaceutical companies thanks to a handful of hugely successful products, most notably anaemia drugs Aranesp and Epogen.
But a rapid succession of new safety concerns and prescribing restrictions to its products issued this year have halted the company's previously unbroken run of growth.
Sales of Aranesp suffered a 10% drop in the second quarter of this year, revenues dipping under $1 billion for the period. The decline was mainly brought about by falling demand in the US market, which accounts for around two-thirds of the drug's total revenues.
US sales fell a full 19% in the period, following a series of developments which have deterred doctors from prescribing the drug, usually used to help cancer patients overcome anaemia caused by chemotherapy.
In February, an influential US drug reference guide removed Aranesp from its guidance on treating Anemia of Cancer (AoC), which then prompted nearly all Medicare insurers to stop paying for patients to receive the drug.
Just one month later, the FDA added new safety warnings to all drugs in the class, including Aranesp and another Amgen product, Epogen.
Then in June, the US government insurance system issued guidance which will put new restrictions on use of drugs in the erythropoietin (known as EPO) class.
But Amgen predicts further bad news is just round the corner, and says the FDA and Europe's EMEA could make unfavourable rulings on EPO drugs later this year which will further limit their use.
Finally, new rival products, such as Shire's Dynepo (epoetin delta) and Roche's Mircera, are due to hit European markets by the end of 2007, while the first generic biosimilar EPO products are also expected to gain approval in the region this year.
Good news came in the form of sales growth in Europe, particularly in the nephrology market, although the figures were distorted by favourable currency fluctuations.
Exchange rates helped boost international revenues in the period, but with these removed, worldwide sales fell 12% and non-US sales were up just 2%.
Vectibix hits a wall
To further compound Amgen's woes, its new cancer drug Vectibix looks to have been badly damaged by safety scares.
In May, the EMEA's medicines committee rejected Vectibix for use in its principal indication, as a treatment for metastatic colorectal cancer which has progressed or following all standard chemotherapy regimens.
A number of side-effects to the skin of patients have been seen in the vast majority of patients - 89% – with around 12% suffering severe effects.
Some severe cases, which included skin fissures were complicated by infection, including sepsis, septic death, and abscesses requiring incisions and drainage.
Severe reactions to the drug's delivery by infusion were seen in a very small number of patients, and although no patients have died taking Vectibix for this reason, other monoclonal antibodies have proven fatal.
Vectibix is already available in the US market, but is competing with the well-established Erbitux, marketed there by BMS and ImClone.
Amgen has also had to pull the plug on trials of Vectibix in combination with Avastin or chemotherapy, after results suggested it increased toxicity in patients without improving efficacy.
US operations to bear brunt
The company has responded to the setbacks by conducting a global review of its business and cost structures, and plans to cut as much as 14% of its global workforce.
This could translate to as many as 2,600 jobs cut, with the US operations and global manufacturing expected to bear the brunt of the cutbacks. It says staff attrition and voluntary redundancies will account for much of the reduction.
In recent years, Amgen has begun to extend its presence beyond the US, with the UK in particular benefiting from new investment.
In March this year, Tony Blair opened Amgen's new European Development Centre in Uxbridge, which will co-ordinate more than half of the country's European clinical trials.
The centre is the company's largest R&D investment outside the US and employs more than 300 staff to support its expanding international clinical trial programme.
A spokesperson for Amgen in the UK said it was still too early to say what the impact of the review would be on the UK business, but indicated that its voluntary redundancy programme was unlikely to reach beyond the US.
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