Biologic drugmaker Amgen said Tuesday that it will lay off 12 percent to 15 percent of its worldwide workforce and close four sites, even as it reported very strong second-quarter results that trounced Wall Street expectations.
The maker of Prolia for osteoporosis and anemia treatment Aranesp said it's restructuring to free up money needed for investments in the business, particularly marketing costs for launching new drugs.
The layoffs will happen this year and next, eliminating 2,400 to 2,900 jobs, mostly in the U.S. Amgen also plans to close two sites in Colorado, primarily manufacturing plants, and two in Washington state that focus on research and development.
Amgen said it will streamline the company, reduce management layers and reduce its real estate footprint by 23 percent.
The company, based in Thousand Oaks, California, anticipates charges of $775 million to $950 million, mostly in 2014 and 2015. It expects modest savings in 2015, but expense reductions in 2016 of about $700 million, versus 2013 spending. Most savings will be reinvested, including expanding operations in the biotech hubs of Cambridge, Massachusetts, and South San Francisco, California.
Meanwhile, Amgen posted a 23 percent jump in second-quarter profit as revenue jumped 11 percent on strong performances by all but two of its drugs.
Net income was $1.55 billion, or $2.01 per share, up from $1.26 billion, or $1.65 per share, in 2013's second quarter.
Excluding one-time charges, adjusted income was $1.82 billion, or $2.37 per share. That surpassed the expectations of analysts surveyed by FactSet by a whopping 30 cents per share.
Revenue totaled $5.18 billion, up from $4.68 billion a year earlier. Analysts were expecting $4.92 billion.
Amgen also raised its forecasts for its 2014 profit and revenue. It now expects adjusted earnings per share of $8.20 to $8.40 per share, up from its January forecast of $7.90 to $8.20. And it's anticipating revenue of $19.5 billion to $19.7 billion, up from $19.2 billion to $19.6 billion.
In after-hours trading, shares of the drugmaker added more than 4 percent, or $5.44, to $128.75.
Amgen is the world's biggest maker of biologic drugs, which are produced in living cells, rather than by mixing chemicals, as traditional pills are made.