Biotechnology company Amgen is to axe up to 14% of its workforce because of slower-than-expected sales of its anaemia drug Aranesp (darbepoetin alfa).
The company said up to 2,600 jobs could be lost, and it will also be forced to reduce its capital expenditure by £950m.
There were hints that the company was experiencing difficulties last month when it announced that worldwide sales of Aranesp dropped by 10% to £478m in the second quarter.
The weak sales came after the Food and Drug Administration (FDA) ruled the drug should carry a stronger warning label when given to cancer patients with anaemia.
As a result, doctors have been told to use the lowest possible dose of Aranesp when they are treating these people.
And on August 1, the company suffered another blow when Medicare released new rules restricting reimbursement for the class of drugs known as erythropoiesis-stimulating agents, or ESAs, which include another Amgen drug, Epogen (epoetin alfa).
ESAs are used to treat anaemia in patients with kidney failure and in cancer patients undergoing chemotherapy.
Amgen’s Chairman and Chief Executive Officer Kevin Sharer said: “This has not been an easy year or the one we expected.”
The firm said it will continue to concentrate on research and development, but added that it will be forced to reduce the amount it spends as a proportion of sales from 23% in 2006 to 20%.
Copyright © PA Business 2007