Biotechnology company Amgen AMGN said Wednesday it will cut up to 14% of its workforce and has lowered its profit guidance because of slimmer than expected sales of its anemia drug Aranesp.
The company said it plans to reduce its workforce by 12% to 14%, or between 2,200 and 2,600 positions and will get hit with a restructuring charge between $600 million and $700 million.
Amgen also reduced its adjusted earnings per share guidance for the full-year to between $4.13 a share and $4.23 a share from previous guidance of $4.28 a share.
The company said it would also reduce capital expenditures by $1.9 billion.
The moves do not come as a surprise. Amgen signaled problems last month when it reported that worldwide sales of its anemia-treating drug Aranesp dropped 10% to $949 million in the second quarter. The Food and Drug Administration found that the drug should carry a stronger warning label when used in cancer patients with anemia.
The warning label addition called for doctors to use the lowest possible dose of the drug.
On Aug. 1, Medicare released new rules restricting reimbursement for the class of drugs known as erythropoiesis-stimulating agents, which also includes Johnson & Johnson's Procrit and another Amgen drug, Epogen. They are used to treat anemia in patients with kidney failure and in cancer patients undergoing chemotherapy.
The additional warnings and later calls for more studies focused on safety were damaging to Amgen.
Aranesp was the company's best-selling drug last year, with $4.12 billion in sales.
The company had previously said it would cut back on expansion plans overseas and would refocus resources on research and development efforts.
"We will continue to strongly support our research efforts directed at development of new medicines for grievously ill patients," Kevin Sharer, Amgen's chairman and chief executive officer, said in a statement. "These changes will also position Amgen for success in 2008 and beyond."
Shares of Amgen closed regular trading down 73 cents at $50.59. The stock rose 50 cents in aftermarket trading.