Biotechnology firm Amgen said after U.S. markets closed Wednesday that it will slash its employee base by between 12 and 14% in hopes of reducing its 2008 cost forecasts by $1 billion to $1.3 billion on a pre-tax basis.
The company also lowered its earnings-per-share guidance for 2007 to a range of $4.13 to $4.23, excluding restructuring charges, due to lower revenue from its Aranesp drug. Guidance previously stood at $4.28.
As a result of the firings, Amgen expects to incur pre-tax restructuring charges of $600 million to $700 million in 2007 and 2008, which includes $289 million for asset impairment and related costs reported in the second quarter, the company said.
The notice comes just days after Amgen said in a regulatory filing that it was preparing to cut costs as its lucrative anemia drug franchise is under pressure due to safety concerns.
The Thousand Oaks, Calif.-based company has seen its anemia drug revenue, which totaled $6.6 billion in 2006, dip 10 percent in the first half of this year as U.S. regulators put strict warnings on the drugs and the Centers for Medicare & Medicaid Services began restricting instances in which they would pay for use of the drugs.
In a regulatory filing late last week, Amgen said it was looking for ways to cut its costs in response to revenue declines from its anemia drugs Aranesp and Epogen.
Shares of Amgen rose about 1.5 percent after the bell on Wednesday.
Amgen stock has fallen about 25 percent this year, compared with a rise of nearly 2 percent in the American Stock Exchange Biotech Index.