Amgen cutting up to 2,600 jobs; local impact still 'unknown'

Amgen, the world's largest biotechnology company, will slash jobs for the first time in its 27-year history, close plants and cut capital spending in response to declining sales of its top-selling drug.

The job cuts will total 2,200 to 2,600, or 12 to 14 percent of the work force, under a plan to save more than $1 billion in 2008, Amgen said Wednesday. Earnings this year will be lower than projected, the company said.

The company, Washington's largest biotech employer with about 1,100 workers in Seattle and Bothell, said nothing about the effect of the cuts here.

"The details about how this would impact Amgen locally are unknown," said spokeswoman Carol Pawlak. She said employees will be offered a severance package to encourage some voluntary departures, but had no specifics.

"We're hoping to minimize the number of staff that are impacted and use attrition, hiring freezes and this voluntary transition program," Pawlak said.

Asked to comment on rumors that a planned expansion at Amgen's Helix campus in Seattle have been put on hold, Pawlak said, "We don't have an announcement that provides detail about that."

Amgen shares have lost 26 percent this year after studies showed the company's two top-selling anemia drugs, Aranesp and Epogen, raised the risk of death when given in high doses. The drugs account for almost half of Amgen's revenue. Payment limits by insurers and safety warnings from U.S. regulators threaten to cut $1.3 billion in revenue this year, analysts say.

"Amgen is a painful story this year," said Sven Borho, a portfolio manager with Orbimed Advisors in New York.

Amgen shares rose 74 cents, or 1.5 percent, to $51.33 as of 4:30 p.m. New York time in extended trading after the report.

Amgen said it will close some production operations and reduce the size of other units to become more efficient. Capital spending will be slashed by $1.9 billion during the two years, bolstering cash flow, the company said.

"It doesn't look like they're cutting muscle or brawn, but trimming the fat around the edges," said Geoffrey Porges, an analyst with Sanford C. Bernstein in New York, in an interview. "It's encouraging because it shows the company is committed to preserving earnings, cash flow and shareholder value."

Amgen employs about 230 in Bothell, where the company develops drug-manufacturing processes and produces doses of drugs used in clinical trials. Another 100 people, mainly involved in IT and operations — functions that do not need access to laboratories — work in the old Washington Mutual tower in downtown Seattle.

The remainder, approximately 770 people, are involved in research focused on inflammation and oncology at the Helix campus, off of Elliott Avenue West. "We are at capacity at our Helix facility," Pawlak said.

Besides its headquarters, Amgen has 11 locations in the U.S. including research centers in South San Francisco, California; Cambridge, Massachusetts; and Seattle. It had about 20,000 employees worldwide as of March.

The drugmaker lowered its profit forecast for 2007 to $4.13 to $4.23 a share, excluding stock options and other expenses. In January, the company said it expected profit of $4.30 to $4.50 a share for the year.

Seattle Times business reporter Benjamin J. Romano contributed to this story.