Amgen to slash staff by up to 14 percent
The biotech lowers earnings guidance for 2007, prepares to cut 2,600 employees, blames anti-anemia drug Aranesp sales.
NEW YORK (CNNMoney.com) -- The biotech giant Amgen said it will cut its staff by up to 14 percent and lower its guidance because of low revenues from Aranesp, one of its top-selling drugs.
Amgen said the staff cuts, of up to 2,600 employees, would be completed in 2008 and result in pre-tax savings of up to $1.3 billion for that year. The biotech said pre-tax restructuring charges of up to $700 million are expected.
Amgen's stock has fallen 25 percent year-to-date, squeezed by concerns over the safety of Aranesp, a blockbuster used in conjunction with chemotherapy to offset the depletion of red blood cells.
In March, the FDA heightened warning labels for Aranesp and another Amgen drug, Epogen, as well as Johnson & Johnson's (up $0.17 to $61.30, Charts, Fortune 500) competing drug Procit, saying that these drugs could have sometimes-fatal side effects.
Amgen and Epogen sales totaled $6.6 billion in 2006.