Amgen Inc (NASDAQ:AMGN) on Tuesday said it would cut up to 15 percent of its global work force and close plants as part of a series of moves aimed at reallocating resources as it prepares for the eventual launch of medicines it hopes will drive future growth.
High on the list of Amgen's potential growth drivers is evolocumab, a high-profile cholesterol-lowering medicine from a new class of drugs that analysts see having multibillion-dollar sales potential. The company said it plans to file applications seeking U.S. and European approval during the current quarter.
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Amgen's second-quarter profit sailed past Wall Street expectations after a disappointing first quarter, and the company significantly raised its full-year earnings forecast. Its shares rose more than 4 percent to $129.
Amgen now expects 2014 adjusted earnings of $8.20 to $8.40 per share, up from its prior view of $7.90 to $8.20 per share. It sees full-year revenue of $19.5 billion to $19.7 billion compared with its previous forecast of $19.2 billion to $19.6 billion.
Wall Street on average was looking for $8.09 per share and revenue of $19.41 billion.
Amgen said it will slash 2,400 to 2,900 jobs, primarily in the United States, over this year and 2015 and close plants in Colorado and Washington.
It plans to expand its presence in the biotech hotbeds of South San Francisco, California, and Cambridge, Massachusetts.
"At each site, we are actively engaging in discussions with third parties about potential future use of the facilities," Chief Executive Robert Bradway said in a statement.
Amgen will maintain its Southern California headquarters with reduced staff in fewer buildings.
The company said it will take pre-tax accounting charges of $775 million to $950 million primarily this year and next. The moves will reduce operating expenses by about $700 million in 2016, Amgen said, adding that most of the savings will be reinvested to support global launches of new products.
Excluding items, Amgen earned $2.37 per share, topping analysts' average expectation by 30 cents, according to Thomson Reuters I/B/E/S.
Amgen said net profit rose to $1.55 billion, or $2.01 per share, from $1.26 billion, or $1.65 per share, a year ago.
Revenue rose 11 percent to $5.2 billion, exceeding Wall Street estimates of $4.89 billion.
(Reporting by Bill Berkrot; Editing by James Dalgleish and Leslie Adler)
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