Approved by the Board at the weekend, Amgen announced plans to restructure its business in order to save up to $700m (€520m) a year during a conference call yesterday discussing Q2 2014.
The company is slashing manufacturing operations by about 23%, shuttering its Bothell, Washington and Longmont, Colorado facilities and cutting headcount at its headquarters and clinical manufacturing Thousand Oaks, California site, as part of a staff reduction affecting up to 2,900 workers.
However, the restructuring gives the firm the opportunity to “rationalise” some of its manufacturing capability, freeing up some of Amgen’s legacy manufacturing capacity, CEO Bob Bradway told investors.
“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,” he said (transcript here).
Furthermore, he added, Amgen is dedicated to investing in manufacturing technologies and processes that reduce the current cost and increase the reliability of making protein therapies.
“This doesn’t, in any way, diminish our enthusiasm for the biosimilar portfolio that we’re developing,” Bradway continued. “We have six programs advancing, three of which are already in pivotal trial, so we’re excited about the prospect of developing and launching those beginning in 2017.”
Amgen has pursued its own biosimilar products, partnering with generics firm Watson – now Actavis – in 2011, to develop and commercialise biosimilar versions of bevacizumab (Roche’s Avastin), trastuzumab (Roche’s Herceptin), rituximab (Roche/Biogen Idec’s Rituxan/Mabthera) and cetuximab (BMS/Lilly’s Erbitux).
The firm is also working on versions of AbbVie’s Humira and Janssen’s drug Remicade which became the first MAb drug to have a biosimilar approved in Europe last year.
As for its proprietary portfolio, both Neupogen (filgrastim) and Epogen (epoetin alfa) both face biosimilar competition in the EU and other markets, though not the US which is yet to have approved a biosimilar.
For the quarter, Amgen reported $1.4bn in global sales of Neupogen and $512m for Epogen. Sales of Enbrel (etanercept) were $1.2bn. Total revenues for the company were $5.2bn, up 11% year-on-year, whilst operating expenses remained flat at $3.3bn.