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Biotech drugmaker Amgen laying off at least 2,400

By WTOP Staff

LINDA A. JOHNSON
AP Business Writer

Biologic drugmaker Amgen said Tuesday that it will lay off 12 to 15 percent of its worldwide workforce and close four sites, even as it reported stellar second-quarter results that trounced Wall Street expectations.

Amgen also raised its forecasts for its 2014 profit and revenue, driving up its shares.

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 and other costs for launching new drugs.

“We began this action with strong confidence in the underlying performance of our business,” CEO Bob Bradway told analysts on a conference call.

The layoffs will happen this year and next, eliminating 2,400 to 2,900 of its 20,000 jobs, mostly in the U.S. Amgen plans to close two sites in Washington state that focus on research and development and two in Colorado, primarily manufacturing plants with 20-year-old technology. It’s investing in the latest technology elsewhere.

Amgen said it will streamline the company, reduce management layers and reduce its real estate footprint by 23 percent. It will keep its headquarters in Thousand Oaks, California, albeit with a smaller staff.

The company anticipates charges of $775 million to $950 million for site closures and severance payments, mostly in 2014 and 2015. It expects modest 2015 savings, but expense reductions in 2016 of about $700 million, versus 2013 spending. Most savings will be reinvested, including expanding its operations in the biotech hubs of Cambridge, Massachusetts, and South San Francisco, California.

“We have an unprecedented number of late-stage programs rolling through at the moment,” said research head Sean Harper.

Amgen is awaiting U.S. approval for its chronic heart failure medicine, ivabradine, and its advanced melanoma drug, talimogene laherparepvec. The company hasn’t announced brand names for either one.

It plans to apply in this quarter for U.S. and EU approval of evolocumab, for abnormal levels of blood fats such as cholesterol. It’s targeting the second half of the year to apply for U.S. approval of blinatumomab, for acute lymphoblastic leukemia that’s relapsed or not responded to prior treatment. And it’s conducting late-stage patient tests on drugs for psoriasis, recurrent ovarian cancer and a thyroid disorder.

Meanwhile, Amgen posted a 23 percent jump in second-quarter profit as revenue jumped 11 percent on strong performances by nearly all 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. Analysts expected just $2.07 per share, according to FactSet.

Revenue totaled $5.18 billion, up from $4.68 billion a year earlier. Analysts were expecting $4.92 billion.

Among its top sellers, sales of anemia drugs Neulasta and Neupogen slid 1 percent to $1.1 billion, but Enbrel for rheumatoid arthritis and other immune disorders saw sales climb 7 percent to $1.2 billion.

Amgen said 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. It also expects a low tax rate, 15 percent to 16 percent for the full year.

“We view the restructuring plan and 15 percent workforce reduction announced as a positive that will help the company improve its cost structure while continuing to invest in the pipeline and key product launches,” Citigroup analyst Dr. Yaron Werber wrote to investors.

In after-hours trading, Amgen shares added $4.21, or 3.4 percent, to $127.52.

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.

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Follow Linda A. Johnson at www.twitter.com/LindaJ_onPharma

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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