Amgen to Cut Another 172 Jobs Following Layoff Announcement Earlier This Month
Last week, Amgen submitted a Worker Adjustment and Retraining (WARN) filing with the Commonwealth of Massachusetts. It reported its plan to lay off 149 staffers effective December 31, 2019. It now reports plans to cut 172 jobs at its headquarters and field operations. This time a WARN was filed in California. Most of the jobs are field-based positions across the U.S., although some will be in Thousand Oaks, California, at the company’s headquarters. These too will take place December 31.
The Massachusetts job cuts were related to Amgen ending its neuroscience research. It has spent the last five years increasing its presence in New England, shifting staff from California to Kendall Square in Cambridge. Some of the Cambridge staffers have been offered relocation to other sites in North America. The Cambridge site will continue to work with a “process development process” for pipeline products and next-generation technology.
The company announced in its third-quarter financial report plans to exit the neuroscience space. Instead, it plans to reprioritize efforts on cardiovascular disease, oncology and inflammatory diseases. A total of about 180 positions were to be affected, with 149 of them in Massachusetts.
In terms of the new announcement, an Amgen spokeswoman said Amgen “regularly evaluates and adjusts staffing levels to meet the needs of the business. While these decisions are never easy, we believe our ability to compete will be strengthened by a tighter focus on investments that can help bring important medicines to patients to treat serious, life-threatening illnesses.”
Amgen is facing generic competition. It will soon face generic competition for its thyroid drug Sensipar and recent biosimilars were launched to its Neupogen and Neulasta, which boost the immune system, and Epogen, a drug for anemia. Biosimilars of its Enbrel immunology drug have been approved, but not yet hit the market.
In addition to these cuts and the shift away from neuroscience, Amgen is leaning hard into oncology and the China market. On November 1, Amgen significantly expanded its presence in China by taking a 20.5% stake in China-based BeiGene.
Under the terms of the strategic collaboration, Amgen is paying about $2.7 billion in cash, or $174.85 per BeiGene American Depositary Share on the Nasdaq, which is a 36% premium to BeiGene’s average share price over the last 30 days as of October 30. Amgen will nominate a person to BeiGene’s board of directors.
Under the deal, BeiGene will commercialize Xgeva, Kyprolis and Blincyto in China. The two companies will split profits and losses evenly. Two of them will revert to Amgen, one after five years, the other after seven years. After that commercialization period ends, BeiGene will be able to retain one product and receive royalties on China sales for another five years on the product rights it returns to Amgen.
The two companies will also collaborate on 20 drugs from Amgen’s oncology pipeline in China and globally. BeiGene will invest up to $1.25 billion in research and development costs. Amgen will pay royalties to BeiGene on sales of any of these drugs outside of China except for AMG 510, which is being developed for solid tumors.
Amgen plans to continue to market its non-cancer drugs in China. For example, earlier this year it launched Repatha for cholesterol in China. It plans to launch several more outside of cancer in China over the next few years, including Prolia for osteoporosis.
“This strategic collaboration with BeiGene will enable Amgen to serve significantly more patients by expanding our presence in the world’s most populous country,” said Robert A. Bradway, Amgen’s chairman and chief executive officer. “Cancer is a leading cause of death in China and will only become a more pressing public health issue as the Chinese population ages. With its extensive commercial and clinical capabilities within China and a commitment to global quality standards, BeiGene is the ideal strategic collaborator as we seek to make a meaningful difference in the lives of millions of cancer patients in China and around the world.”