|Amgen CEO Robert Bradway|
Amgen is cutting up to 2,900 jobs, and the ax-wielding will fall heavily on manufacturing and R&D sites in Colorado and Washington, whose futures were already dim. Going forward, CEO Robert Bradway said the company will free up some older manufacturing techniques in favor of processing that will make protein therapies more efficiently.
The California biotech announced Tuesday that it will cut 12% to 15% of its workforce of 20,000, between 2,400 and 2,900 people. In a filing with the SEC, Amgen ($AMGN) said it "expects to close and/or dispose of its Seattle and Bothell, Washington and Boulder and Longmont, Colorado facilities largely in 2015."
Amgen spokeswoman Kristen Davis said in an email that the company has about 660 people in Washington. According to the Seattle Times, the cuts there include 610 at an R&D facility in Seattle and 50 jobs at its small-batch manufacturing plant in Bothell. In 2009, Amgen cut about 100 of the 170 jobs it had at the Bothell plant at the time.
Davis said in the Boulder area, the cuts will amount to about 430 jobs. That comes after the company decided to whack about a third of the 650 people at those facilities, 220 positions, at the end of April after deciding to suspend manufacturing of the anemia drug Epogen. Amgen's Longmont site has about 700,000 square feet of space, of which 220,000 was used for Epogen production. The company's Lake Center facility in Boulder is about 300,000 square feet.
In a call with analysts Tuesday, Bradway said the company's intent in manufacturing was to "invest in new technologies that will lower the cost of protein production," according to a transcript from Seeking Alpha. "And as we progress our investments in that area, we would expect that to free up some of our legacy manufacturing capacity. So we're exiting 20-year-old manufacturing technologies and continuing to invest in what we think are state-of-the-art, cutting-edge technologies that will enable us to rationalize and, we think, make product more reliably and more cost effectively," Bradway said.
The bloodletting announcement Tuesday followed a strong Q2 earnings report. It said net income was up 23% to $1.55 billion, or $2.01 a share, from $1.26 billion, or $1.65 a share, in the same quarter a year ago. When one-time charges were stripped away, that amounted to $2.37 a share. But much of its revenues come from its arthritis drug Enbrel, which is expected to soon face biosimilar competition.