Amgen to cut up to 14% of its workforce

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Amgen has announced job cuts of 2200?2600, equating to a loss of 12?14% of its workforce.

Amgen has announced job cuts of 2200–2600, equating to a loss of 12–14% of its workforce. This is to offset the company's recent difficulties with the sales of its anaemia blockbusters. The cuts are due for completion by next year and in combination with other drives to promote operational efficiency (such as closing certain production facilities) are anticipated to reap pretax savings of in excess of $1 billion in 2008. The company hopes that this will enable it to maintain "industry-leading levels" of investment in R&D.

 Scrutiny around the firm's two top selling drugs Aranesp (darbopoietin alfa) and Epogen has intensified over recent months, with its sales for anaemia products declining 6% in the second quarter of the year. This was mainly because of Aranesp, which suffered a 19% decrease from the same quarter last year. A change in the drug's labelling, implemented by FDA following safety concerns of erythropoietin stimulating agents, affected sales.

 Kevin Sharer, Amgen's chairman and chief executive officer said: "Recent changes in coverage rules and adjustments to Amgen's FDA approved labels for EPOGEN and Aranesp have and will adversely affect Amgen's revenue. The initiatives announced respond to that new reality by taking account of reduced revenues and appropriately lowering costs across the company." He added that the company would continue to support its research efforts for the development of new medicines for grievously ill patients. Furthermore, the Center for Medicare and Medicaid Services' plan to set new guidelines for erythropoietin stimulating agents will drastically cut reimbursements and prescriptions of anaemia drugs, which could have further impact on Aranesp's sales.