Amgen Announces Additional 172 Layoffs Amid Intensifying Biosimilar Competition

Compiled by Keke

“Declining profits and an inability to pay wages inevitably lead to layoffs” is an ironclad rule. In recent quarters, Amgen’s revenue has been severely impacted by generic drugs, and the repercussions have now extended to employee payroll. Last week, Amgen officially implemented the layoff of nearly 150 employees in its neuroscience business on the U.S. East Coast.On November 19, Amgen announced it would lay off an additional 172 employees across its headquarters and other business units.。

According to the “Warning Notice” issued by the California Employment Development Department, Amgen’s current layoffs will take effect onEffective December 31 this year, affecting employees in the R&D, operations, and commercial departments. Although the layoffs also impacted personnel at the company’s headquarters in Thousand Oaks, California, the majority of those affected were still “rank-and-file” employees across the United States.

Amgen, founded in 1980 and headquartered in Thousand Oaks, California, has grown into one of the largest pharmaceutical companies through multiple mergers and acquisitions. The company’s layoffs and restructuring have seemed never-ending. In 2014, it underwent a major restructuring that resulted in 2,900 job cuts. In 2017, Amgen laid off nearly 500 positions at its headquarters for the first time to prepare for opening a new facility in Tampa, Florida, marking the second time the company had cut jobs at its headquarters.

Amgen’s decision to shut down its neuroscience R&D department and lay off all planned staff was driven not only by repeated research failures but also by the high costs and heavy losses involved. In 2015, Amgen partnered with Novartis to develop CNP520, a BACE inhibitor for Alzheimer’s disease that was in early-stage clinical trials. The study enrolled more than 1,300 healthy elderly participants, but by 2019, it had failed despite progressing to Phase II/III. Over the past few years, pharmaceutical giants such as Eli Lilly, Johnson & Johnson, Pfizer, and Roche have invested billions of dollars in this field, yet nearly all have failed to achieve success. Last week, Amgen stated that although it has withdrawn from neuroscience research, it continues to engage in the field through other means. (Related reading:Amgen Cuts 149 Jobs in the U.S.）

In addition to R&D losses, Amgen is also grappling with patent expirations and competition from new biosimilars. The company is currently facing a generic “war” over its thyroid medication Sensipar (cinacalcet). Approved by the FDA in March 2004, Sensipar was the first allosteric G protein-coupled receptor modulator to reach the market, indicated for the treatment of secondary hyperparathyroidism in patients with end-stage renal disease and for hypercalcemia in patients with parathyroid carcinoma. In 2018, total U.S. sales of the drug amounted to $1.43 billion. Although Amgen employed strategies such as patent litigation and settlements to delay market entry by competitors, multiple generic versions have already received FDA approval. Teva’s generic product briefly entered the market in 2018, generating tens of millions of dollars in sales. Amgen ultimately negotiated to delay the launch of all generic versions until 2021. Nevertheless, Amgen anticipates that Sensipar’s sales will decline this year regardless.

In addition to Sensipar, Amgen’s white blood cell boosters Neupogen and Neulasta, as well as the anemia drug Epogen, are all facing competition from biosimilars. In 2018, Fulphila, the first biosimilar of Neulasta developed by Mylan, was approved, leading to a 1% decline in global sales that year; sales of Neupogen dropped by 34%. Sales of Epogen also fell by 8% in 2018.

Amgen’s blockbuster autoimmune drug, Enbrel, is also facing a bleak outlook. Under pressure from biosimilars, Enbrel’s sales have declined for two consecutive years, reaching $5.014 billion in 2018, an 8% year-over-year decrease. According to FiercePharma, Novartis’s Enbrel biosimilar, Erelzi, has received FDA approval but has not yet been launched. This summer, Amgen temporarily fended off a patent challenge to Enbrel brought by Novartis’s Sandoz division. Amgen executives recently stated that litigation over Enbrel’s patents will take time, making it unclear when generics will enter the market.

Due to intense competition, Amgen’s total sales declined by 2% and 3% year-over-year in the second and third quarters of this year, respectively.

Meanwhile, Amgen has also begun to counter other companies with its own biosimilars. Amgen’s own biosimilar products generated $173 million in revenue last quarter.

Reference source: Hit by copycat meds, Amgen trims 172 more jobs, this time in operations, R&D and sales